Agri – Economy

According to the 2023 GDP rankings, the Indian economy is ranked sixth among the world’s top economies. The majority of people in the nation rely on agriculture as their primary source of income. A major pillar of the Indian economy, the agriculture industry employs 60% of the labour force and generates 17% of the country’s GDP.

An agro-economy, like that of India, is heavily reliant on the cycle of production, distribution, and consumption. roductivity is another issue with the agro-economy. Indian farmers currently produce only 2.4 tonnes of rice per hectare of land, which is a far cry from their true potential. China and Brazil, on the other hand, produce 4.7 and 3.6 tonnes of rice per acre, respectively.

Since more than half of the population of India is engaged in agriculture, two significant elements underscore the role that agriculture plays in the economy. First off, it gives rural agricultural and non-agricultural labour job prospects. Second, it is important for operations like import and export trading on a global scale. India supports 17.8% of the world’s people and 15% of the world’s cattle with only 4% of the world’s water resources and 2.4% of the world’s land.

  • About 55% of India’s population relies on agriculture as their main source of income.
  • It has the largest area planted to wheat, rice, and cotton.
  • It is the second-largest producer of wheat, rice, cotton, sugar, farmed fish, fruit, vegetables, tea, and farmed vegetables.
  • India has the second-largest agricultural land area in the world
  • The increasing income levels in rural and urban areas have boosted the demand for agricultural products across the country.
  • West Bengal, Uttar Pradesh and Punjab produced 36% of the total rice produced in India in the year 2022.
  • In 2022, Uttar Pradesh, Madhya Pradesh and Punjab produced 64% of all the wheat that is produced in India .
  • Maharashtra, Madhya Pradesh and Karnataka produced almost 38% of all the corn in India.
  • Uttar Pradesh, Madhya Pradesh and Punjab produced almost 39% of the entire amount of food grains produced in India.
  • The Government of India had requested that the United Nations declare 2023 as the International Year of Millets (IYoM-2023) in order to
    increase domestic and international demand and to supply nutrient-rich food to the population.

GDP from Agriculture

India’s GDP from agriculture fell from 7004.72 INR billion in the fourth quarter of 2022 to 6071.31 INR billion in the first quarter of 2023.

Mechanization of Indian Agriculture

Agriculture mechanisation is a crucial component of modern agriculture. Along with lowering labour costs and human toil, it increases productivity. Mechanisation also enhances the safety and comfort of farmers, the efficiency with which other inputs are used, and the quality and added value of the produce. Aside from allowing farmers to grow a second crop or many crops, efficient machinery increases output and productivity, transforming subsistence agriculture in India into a profitable industry.

In order to promote an expedited but inclusive expansion of agricultural mechanisation in India, the Department of Agriculture & Farmers Welfare has incorporated the elements of agricultural mechanisation under several plans and projects. The following targeted actions will put small and marginal farmers at the forefront with a focus on “reaching the unreached.” The following components make up the “Sub Mission on Agricultural Mechanisation” scheme, which was created with this objective in mind by the Ministry of Agriculture and Farmers Welfare’s Department of Agriculture and Farmers Welfare, Mechanisation and Technology Division.

  • Training, testing, and demonstration to promote and strengthen agricultural mechanization
  • Post Harvest Technology and Management (PHTM) demonstration, instruction, and distribution
  • Assistance for the Purchasing of Agriculture Equipment and Machinery
  • Create Farm Machinery Banks for Personalised Hiring
  • Create an Equipment Hub for Custom Hiring that is High-Tech
  • Farm mechanisation promotion in a few villages
  • Financial Support for the Promotion of Hectare-Level Mechanised Operations through Custom Hiring Centres Promotion of Farm Equipment and Machinery in the Northeast Region


Agritech Boosting Indian Agriculture

The number of agri-tech start-ups in India expanded from less than 50 in 2013 to more than 1,000 by 2022, thanks to growing farmer knowledge, better internet access in rural areas, and the demand for increased efficiency in the agricultural industry. Agtech in India is still growing, with innovations coming from both start-ups or “agrifintechs,” and major technology firms. Core enterprises in the value chain are embracing digital technologies like “super apps” to innovate.

  • Existing agricultural incumbents employ digital technologies to reach farmers directly or to spread their products and services to nearby areas.
  • Technology is being used by suppliers of agrochemicals, fertilisers, and seeds to build direct-to-farmer sales channels that cut out middlemen and retailers.
  • Technology is being used by businesses, including banks and nonbanks, that are primarily involved in lending money through farm and rural loans to better understand the farmer, offer tailored products, and lower loan risks.
  • Farmers are now getting mechanization services from companies that offer farm equipment.
  • Organisations that deal with the purchasing, processing, or selling of agricultural goods have begun to integrate back into the supply chain and provide connections to the market for the farmer.
  • The agtech ecosystem has the potential to raise Indian farmers’ profits by 25 to 35 percent and contribute $95 billion to the nation’s GDP through lower input costs, higher productivity and price realisation, more affordable loans, and other income sources.

Innovative Agricultural Technology in India

  1. Automated Irrigation
    Automated irrigation is utilized to work the programmed water system frameworks like lawn sprinklers and drip irrigation
    systems. The domestic irrigation controllers are for cultivating applications, and professional irrigation controllers are for more
    demanding agricultural applications.
  2. Hydroponics
    Used in f horticulture and hydroculture. It involves the process of growing crops without soil.
  3. Soil Moisture Sensors
    Soil moisture sensors are the sensors that are used to measure the water content in the soil. Soil moisture sensors typically refer
    to sensors that estimate water content.
  4. Agricultural Drone
    An agricultural drone is a remote-controlled drone specialized with micro-sensors that is used in various agricultural aspects
    mostly in monitoring crop growth and crop production. An agricultural drone can assist in gaining information on the growth
    stage of the crop and crop health.
  5. Transaction opportunities creation
    Farmers have limited options to do transactions in any vertical. With technology coming into play, farmers will have more
    options to do their day-to-day business, be it in any domain.

Government support for agriculture technology

  • Through farmer collectivization, digital reach is made easier. In order to support farmer-producer organisations (FPOs), the government has allocated $750 million to the creation of more than 10,000 FPOs over the next five years.
  • The development of the “agristack.” India is compiling agricultural data sets into a single database that will be connected to farmers depending on their land holdings.
  • Agtech businesses will be able to customize their products and offerings to farmers’ needs, which vary depending on the size of the farm, the crop being planted, and the soil’s characteristics, thanks to this database.
  • Digital cards monitoring soil health. Mapping the soil composition and quality at the farmer level is a requirement of a digital soil-healthcard programme. It might aid agtech businesses in India in promoting initiatives for precision farming and customising their products for particular farmer groups.
  • Direct benefit transfer in fertiliser sales enabled by technology. Through this plan, farmers will receive direct subsidies for fertilisers and other products. It verifies the identity of the farmer at points of sale and through verification.
  • Market for National Agriculture (eNAM). By linking existing Agriculture Produce Market Committee (APMC) mandis, this pan-Indian electronic online trading site creates a unified national market for agricultural commodities that guarantees better pricing for farmers through a transparent auction process.
  • Digital public infrastructure and the Agricultural Accelerator Fund. The government recently unveiled a new fund to support the agtech ecosystem, which could help launch new start-ups and broaden the range of digital products available to farmers.
  • The government declared its intention to create a public digital infrastructure that is open-source and will probably provide agtechs with pertinent information services throughout the value chain.

Measures for a successful implementation of Digital Agriculture in India

  1. Renting and sharing platforms for agriculture equipment and machinery
    Owing to both constrained financial resources and small farm plots, the opportunity exists for digital platforms that offer equipment renting and sharing services instead of outright purchases.
  2. Academic support
    The local agricultural organization and academic institutes regularly interact with farmers through various locally conducted programs and government initiatives.
  3. Low-cost technology
    The average annual income of an Indian farmer is >US$ 1,000. This low income explains the precarious financial circumstances in which a typical farmer operates in India.
  4. Portable hardware
    As typical Indian farms are small, plug-and-play hardware has a better opportunity in the Indian market. Agricultural land leasing is widely prevalent under various farming arrangements, therefore a farmer farming on a specific plot of land may move to another farm plot next season.

Government Initiatives

  1. The Ministry of Agriculture accounts for 2.8% of the total Union Budget. The Ministry has been allocated Rs 1,25,036 crore in 2023-24, 5% greater than the revised estimates for 2022-23.
  2. The Indian government is planning to launch Kisan Drones for crop assessment, digitization of land records, and spraying of insecticides and nutrients.
  3. NABARD will create a blended capital fund with a focus on the agricultural start-up ecosystem which will be used to fund agriculture and rural enterprise startups that are related to the farm product value chain.
  4. To ensure that newer technology, like as enhanced crop seeds, new breeds and strains of livestock and fish, and improved production and protection methods, reach farmers, a nationwide network of 729 Krishi Vigyan Kendras has been set up at the district level.
  5. The Indian government has initiated Digital Agriculture Mission for 2021-25 for agriculture projects based on new technologies such as artificial intelligence, blockchain, remote sensing and GIS technology, drones, robots, and others.
  6. Access to institutional credit is being provided through Kisan Credit Card and other channels.
  7. Digital Public Infrastructure for Agriculture: Agriculture will be built as an open source, open standard, and interoperable public good.

BDB’s Experience In Agriculture Sector

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