How to improve the Agriculture Productivity in India - A paper sent to be published for Global Economic Summit 2015

1. Agriculture productivity in India
By R.Kannan
Agriculture in India has taken great strides after Independence. We had a green revolution whereby , we
witnessed substantial improvement in productivity and after , the productivity levels have stagnated.
The share of agriculture, which was at one point in time constituted more than 50% of the GDP was
down to less than 14%. The contribution of Agriculture to GDP will reduce in the coming years
considering the fact that Services sector will grow at 10% p.a and Industry is also likely to catch up with
the recent initiatives by government.
Compared to the above growth rates and the goals for future growth, we are aiming a growth rate of
only 4% pa. in agriculture which is much below the growth targets for Industry and Services and also
below the potential of agriculture growth.
Despite India emerging as one of the players in Agriculture in the global arena, the productivity of crops
compared to the world best is half in some products and one third in few other products. There is also a
significant variation in productivity of crops between states.
The following trends were observed in Agriculture production and productivity, which makes us consider
various options for improvement in productivity in agriculture.
Average growth rate of Agriculture and allied sector in India Between 2005-06 to 2013-14 was the
highest for MP followed by Puducherry and Jharkhand with a growth rate of 9.56%, 9.04% and 8.59%.
2009-10 2010-11 2011-12 2012-13 2013-14(P)
MP 8.92 0.24 18.17 18.63 23.28
Puducherry -16.55 25.62 -14.36 11.23 22.88
Jharkhand -6.21 4.46 26.23 6.15 8.30
Average growth rate of Agriculture and allied sector in India Between 2005-06 to 2013-14 was the
lowest for Chandigarh followed by Kerala and Goa with a growth rate of -3.87%, -0.52% and 0.15% .
2009-10 2010-11 2011-12 2012-13 2013-14(P)
Chandigarh -13.10 -6.94 -15.72 -8.76 -0.59
Kerala -1.57 -6.37 -0.06 4.39 -
Goa 0.80 1.66 1.45 -4.53 -
There is a wide variation in Agriculture growth in various states and a state like Chandigarh, it was
showing a constant decline.
Percentage share of Agriculture in India GDP (%) at constant (2004-05) Prices was as follows:
1950-51 1990-91 2000-01 2004-05 2010-11 2011-12 2012-13
Share in 41.8 24.9 24.0 16.0 12.4 12.3 11.8

2. GDP
Percentage Growth of GDP at constant (2004-05) prices for agriculture sector was as follows:
1951-52 1990-91 2000-01 2004-05 2010-11 2011-12 2012-13
Growth % 1.6 4.3 -0.6 0.1 9.5 5.3 0.9
India’s position in world agriculture in 2012:
India with a share of 2.4% of world’s agricultural area ranks seventh after Australia. Russia is at top
position. India’s position in Wheat and paddy production is second after China where as it ranks third in
rapeseed production after Canada and China.
Indi is at second place after China in groundnut production. India’s contribution in world Paddy
production is at 21.38% compared to China’s 27.90%. Yield of India is 3720.82 KG/ha while China has
6774.72 Kg/ha in paddy.
India’s contribution in world wheat production is 14.13%, compared to China’s 18.02% . Yield of India
for wheat is 3177.49 kg/ha while China has 4986.74 kg/ha.
India ranks fourth in Maize production with a yield of 2555.68 kg/ha. While USA ranks first with a yield
of 7743.90 kg/ha.
The reasons for Poor agriculture productivity are :
1. Large number of small farms with low productivity and high cost.
2. Poor farmer training / Low skilled farmers.
3. Poor Farm management practices.
4. Unremunerative prices to farmers.
5. Less importance given to agriculture compared to Industry and services.
6. APMC act.
7. Low technology adoption.
8. Poor water management.
9. Resistance to using genetically modified crops.
10. Poor post harvest infrastructure resulting in wastage.
There is a big scope for increasing the productivity of agriculture in India at farm level , post harvest and
at the distribution stages. The following action plans could be taken up for achieving a higher level of
productivity.
1. Growth target for agriculture. We have to set a stretch target of 6% growth for the entire
country till we achieve the best productivity in the world in each crop. The targets at the
national level should be broken down in to targets for each state and district. Once the targets
are set, detailed action plan in terms of what is to be done in each district should be outlined
with clear milestones for each District Agriculture Officer.
2. The focus should be on crops and states where agriculture productivity is low and there is a
need to set a positive growth target for each state and crop.

3. 3. In Central and State budgets, there should be separate allocation in the annual budget for
productivity improvement initiatives.
4. Best practice sharing. Within India itself, some of the states are well advanced in agriculture
and they have better productivity and farm management practices compared to other states.
The best practices should be documented , including the case studies of successful farming and
these should be shared with all the District Agriculture officers. We can also learn from the best
practices from other parts of the world.
5. Since the average size of the land holding is showing a declining trend, the economies scale for
farming is also showing an unfavourable trend and concepts like producer co-operatives
modeled on the basis of Amul Experiment could be adopted across India. The concept of
cooperative farming to achieve economies of scale could be adopted across the states. To start
with each milk co-operative in the state can also start a co-operative for farming ,where
members who are engaged in farming can form part of this co-operative. By achieving
economies scale, the cost of production of crops would come down.
6. Skill Development mission has been created for many of the manufacturing industries. On the
similar lines, a skills development mission for farming to impart the best training to farmers
could be considered by the government.
7. The penetration of mobile has become all pervasive today and this medium could be used very
effectively to communicate to farmers on the Market price of their produce which will help
them to realize a better price. This process has to be facilitated by modifying the APMC act ,
enabling farmers to sell their produce to any buyer. When farmer realizes, better price, the need
for input and output subsidy also will go down, which will help to reduce the subsidies incurred
by the government . This will improve the balance sheet of both the state and Central
governments.
8. Technology adoption. Since most of the farmers are marginal farmers, they are not able to
adopt the latest technologies of farming. Once a cooperative model evolves, it would be easy to
adopt better technologies for farm management.
9. Irrigation management. At each district level , they have to identify scope for building water
resources, implementing participatory irrigation management and adoption of micro irrigation
systems.
10. India has 13 mn h.a of cultivable waste land. Action plans could be identified to expand the
farming into these areas, this will help in increasing the production of crops.
11. Post harvest, lot of wastage is reported in India, which reduces the realization on sale of
products. Now there are efforts to improve the post harvest supply chain including creation of
cold chain across the country. A country wide, state wise and district wise strategies to be
developed for post harvest management of crops. The savings from post harvest management
could be used for improving the productivity of farms.
12. The food processing industry in India is still in the take off stage and there is a big scope for
improving the productivity through setting up food processing units linked to farms. Here
private sector can play a major role.
13. Private sector also can play a major role in aggregation of farmers through contract farming as
well as direct procurement of produce for retailing.
14. Government has to reallocate a part of the subsidy budget for farm productivity and bring in
Systems, procedures and policies to improve the productivity . it has to play a catalytic role by
giving equal emphasis on Agriculture and its growth and use agriculture as one of the pillars of
high GDP growth.
15. Already there are schemes for Agricultural credit and insurance and all these schemes could be
reviewed to encourage and support higher level of agricultural productivity in the system.

4. By involving all the stakeholders and communicating to them the role , they can play in improving the
agriculture productivity and facilitating the regulatory and policy measures, India should be able to
achieve an annual growth of 6% in Agriculture, till it reaches optimum productivity levels. Through join
efforts of all the stake holders, India will be able to achieve desired productivity.