In India, Agriculture can be seen as one of the most important factors regarding the economy. It has a long history and still is the primary source of livelihood of 58% (726 Million people) of India’s population . It is forecasted that by 2022 500 million people are employed in this sector, but is the sector going into the right direction?
Agriculture and its allied sectors recorded a GDP of $259.23 billion in 2015. With a further increase in Agriculture and private consumption, India’s GDP, according to a recently released study, is likely to reach 7.8% in the fiscal year 2016-2017. Despite the below-normal monsoon last year the real GVA of Agriculture grew by 1.1% in 2015-2016.
The industry is further set to grow due to high demand for food and agricultural raw materials. In addition, most of the output still is heavily dependent on a good monsoon season. So in times of great heat and less than normal rainfall, output stagnates and prices for food products in India increase as more products need to be imported. But now, people are starting to take actions for changing the situation in Indian Agriculture.
One reason for the changing landscape in India’s Agriculture is start-ups. Persons who might also have been working in other areas before, do now open their own agri-businesses increasingly. Anyhow, they don’t focus on traditional methods of farming too much. They see the need for adaptation and new technologies to solve current problems in the Agricultural sector. With this, they can improve productivity in the sector and help farmers increase their earnings.
A lot of these companies use new technologies e.g. to track the conditions of the soil, improve cooling facilities for transportation of goods or create new programs that analyse weather patterns and predict weather conditions. This helps farmers to better plan their fields and crops, as the monsoon nowadays is very unpredictable. In addition, a brainstorming event, Hack4Farming, was staged in May for finding adaptable digital solutions for agricultural purposes. An application that connects smallholder farmers with multiple buyers won the main prize of the event. This application will help farmers to become less dependent on middle men and reduce their transaction costs, as well as provide useful data on current e-mandi prices and quality parameters.
Another trend that has entered Agriculture in India is organic farming. Here, farmers use no or only organic pesticides or fertilizers. This helps the soil and ground water to remain cleaner and get less destroyed as by regular methods. This also improves future outputs of the farmers as the soil can be used longer. As sustainability currently is a large topic in the Indian government, this method is one step towards it in Agriculture. The organic food market has a 4-year forecast of three times its size today, and the government has set a target of making 500,000 acres of land organically farmed. This gives this way of farming a good outlook even though there are critics who say that this way of farming doesn’t feed the nation as much as needed.
Other incentives are, for example, climate-smart farming, where residues of crops aren’t as usually burned but re-used for seeding and no tillage is used, or using plastics to optimize water usage in Agriculture. The last one, if correctly used, could help water savings in irrigation up to 50-70% and increase the output. In May, a one-of-its-kind irrigation pump system that uses solar power has also been set up in the State of Gujarat by a farmer co-operation called Solar Pump Irrigators’ Cooperative Enterprise (SPICE).
The Indian government wants to evolve Agriculture more sustainable with investments and for example develop more irrigation facilities and projects for ground water restoration. The new budget of 2016-17 wants to double farmers’ income by 2022. The 100% FDI allowance for most parts in the Agricultural business makes the sector even more interesting for foreign companies wanting to enter the Indian market.
All the new concepts still have to prove themselves or have to be promoted among the country, so more people know about them, but they are a good way to make India’s Agriculture more sustainable and profitable. This will also have a positive impact on food quality and availability in India as monsoon dependence will be reduced. Still, adaption to these methods needs time, but they promise good results in long-term usage.
All in all, the changes being made in Agriculture create large benefits for all Indians in the future and help to make the Indian Agriculture Industry a stable contributor of GDP again.
To read more about the Indian Agriculture Industry, click Agriculture Industry Newsletter.