INDIAN AGRICULTURE INDUSTRY:

CURRENT STATUS AND FUTURE PROSPECTS

More than 50 % of Indian population is dependent primarily on agriculture. This signifies the overall importance of Indian agriculture sector, which otherwise is not reflected when we witness a declining trend in its share to India’s Gross Value Addition (17.8 % in 2012-13 down to 14.4 % in 2018-19). A consolidated growth rate of 4 % was targeted for agriculture during 2014 to 2019, however, it has fallen short by 1.1 points basis to 2.9 % in 2018-19. Whilst the overall economy of India seems to be under stress after a period of continuous impressive growth years, agriculture has especially been a major cause of concern for Indian administrators due to its impact on a wider population.

Figure 1: Development of the Growth Rate

We know that the Monsoon is the biggest factor affecting performance of the Indian agriculture sector. Most of Indian agriculture is dependent on good monsoon rains, failure of which leads to loss of yield and in some cases the whole crop. In the past five years Indian agriculture has seen two consecutive droughts in 2014 and 2015. These years witnessed drastic reduction in total food-grain production from previous high of 2013. The two years following these drought years, so 2016 & 2017, also experienced a less than normal Monsoon, although total food grain production recovered somewhat.

Similarly, the year 2018 witnessed an erratic distribution of the monsoon - The South-West monsoon during the June to September period was reported to be ‘below normal’. Similarly, a 43 % deficit was reported for the North-East Monsoon. This resulted in severe moisture stress during the dry (Rabi) season. The important agricultural states of Tamilnadu, Maharashtra and Karnataka saw vagaries of drought and many crops like cotton, soybean, corn, groundnut and millets have suffered.

Apart from abiotic stresses, Indian agriculture has also witnessed specific biotic stresses including the impact of a migratory pest recently introduced into India i.e. the lepidopteran insect Fall Army Worm (Spodoptera spp.). Primarily this is infesting the corn crop but Fall Army Worm has the potential to feed in large numbers on leaves and stems of more than 80 plant species, causing major damage to not only corn but also rice, sorghum, sugarcane, cotton and indeed vegetable crops. The cotton crop itself is also continually effected by Bollworm (Helicoverpa spp) and the ability of that pest to continually develop resistance to control agents.

At the same time, a large farmer population is affected by poor infrastructure related to procurement, storage, transportation, marketing and export of farm produce.

This scenario has impacted Indian agri-input industry as well, at least in the short run. The world’s largest MNC conglomerate Bayer had reported losses in its quarterly report ending March’19. Many other Indian giants like Rallis, Dhanuka and IIL also suffered in the last dry (Rabi) season.

Considering all these aspects, the future of Indian agriculture might seem not so promising. Is it really? Agriculture is at the heart of Indian Politics and the Government of India (GOI) is keeping a close eye on the Indian agriculture sector. GOI has set up an ambitious and adventurous aim of doubling farmers’ income by 2022. To achieve this, GOI has taken many initiatives in the areas of providing financial help to farmers, investments in irrigation facilities, farmer-focused policies related to procurement, marketing and exports of farm produce etc. These initiatives are aimed at reducing farm stress and making farming a sustainable occupation.

So, what does the future look like for agri-input industry? In one word, it is “bright”. Due largely to Government’s initiatives, the Indian agriculture sector in the long run is expected to “pick up pace” due to increased investments. The wider agricultural industry needs to play its role by partnering farmers in their fight against various facets of farm stress by not only providing products that solve specific issues, but also by providing a gamut of integrated services, covering all aspects of crop planning, management and marketing.

Author:

Pradeep Sharma, Country Lead - India/ Bangladesh