The agriculture sector is showing signs of recovery for the 2024-25 kharif season, with a projected record foodgrain output. The Ministry of Agriculture estimates production will reach 164.7 million tonnes, a 5.4% increase from the previous year. This optimism comes after a challenging year marked by patchy monsoon rains, which led to a mere 1.4% growth in gross value added (GVA) in agriculture for 2023-24. Despite the positive forecasts, challenges remain, particularly regarding minimum support prices (MSP) and the terms of trade for farmers.
Current Agricultural Growth Trends
The GVA growth for agriculture is expected to improve to 3-3.2% in the current fiscal year. The first quarter of FY25 saw a growth of 2%, down from 3.7% the previous year. A robust rabi season is anticipated due to high soil moisture levels from above-normal rainfall. This could further enhance agricultural output.
Minimum Support Prices and Farmer Income
MSP operations have been subdued for crops other than paddy. Farmers are urged to increase MSP purchases for pulses and oilseeds. Currently, profits from oilseed production are largely captured by traders, leaving farmers with low returns.
Impact of Weather Patterns
Weather conditions will play a critical role in the rabi yield. The agriculture ministry reports that over 60% of wheat seed varieties are climate-resilient. However, erratic weather, such as heatwaves and excessive rainfall, poses a threat to crop yields. Previous years have shown how such conditions can drastically affect production.
Food Prices and Inflation
Despite the anticipated record foodgrain production, food inflation remains a concern. Retail inflation reached a 14-month high of 6.21% in October 2024, driven by food prices. The Consumer Food Price Index (CFPI) registered a provisional rate of 10.87%. High food prices are primarily due to increases in vegetable, fruit, and edible oil costs.
Future Projections for Edible Oils and Pulses
The government has announced MSP for oilseeds, projecting a production increase to 44.75 million tonnes. Edible oil imports are expected to decrease due to higher domestic output. Similarly, pulse production is projected to rise, potentially reducing dependency on imports.
Reservoir Levels and Water Supply
Reservoir levels are at 86% of capacity, surpassing last year’s figures. This bodes well for irrigation and crop growth in the upcoming rabi season. Adequate water supply is crucial for maintaining stable agricultural production.
Climate Change Considerations
The Reserve Bank of India has brought into light climate change as an important factor in rising food prices. Extreme weather events have increasingly disrupted agricultural yields, necessitating adaptive strategies in farming practices.
Questions for UPSC:
- Examine the implications of erratic weather patterns on agricultural productivity in India.
- Critically discuss the role of minimum support prices in enhancing farmer incomes in India.
- Analyse the relationship between food inflation and agricultural output in the context of the Indian economy.
- Point out the challenges and opportunities presented by climate-resilient crop varieties in Indian agriculture.
Answer Hints:
1. Examine the implications of erratic weather patterns on agricultural productivity in India.
Erratic weather patterns, including heatwaves and excessive rainfall, threaten agricultural productivity in India. These climate phenomena can disrupt sowing and harvesting schedules, leading to lower yields and crop failures, as seen in previous years. The agriculture ministry has noted that over 60% of wheat seed varieties are climate-resilient, which offers some hope for adaptability. However, the increasing frequency of extreme weather events necessitates urgent investment in sustainable farming practices and infrastructure to mitigate risks and ensure stable agricultural output.
2. Critically discuss the role of minimum support prices in enhancing farmer incomes in India.
Minimum Support Prices (MSP) are crucial for stabilizing farmer incomes by providing a safety net against market fluctuations. However, MSP operations have been limited, especially for pulses and oilseeds, leaving farmers vulnerable to exploitation by traders. The government needs to enhance MSP coverage and ensure timely procurement to improve price realization for farmers. Without adequate MSP support, the disparity in profit distribution continues, undermining the potential for increased rural income and consumption, which are vital for overall economic growth.
3. Analyse the relationship between food inflation and agricultural output in the context of the Indian economy.
Food inflation in India is closely linked to agricultural output. Despite projected record foodgrain production, retail inflation surged to 6.21%, driven by rising prices of essential commodities, including vegetables and edible oils. High food inflation erodes consumer purchasing power, particularly in rural areas, where food constitutes an important portion of expenditure. The balance between supply and demand, influenced by production levels and weather conditions, plays a very important role in determining food prices, denoting the need for effective supply chain management and policy interventions.
4. Point out the challenges and opportunities presented by climate-resilient crop varieties in Indian agriculture.
Climate-resilient crop varieties present both challenges and opportunities in Indian agriculture. They offer the potential for higher yields in adverse weather conditions, enhancing food security. However, widespread adoption requires important investment in research, farmer education, and infrastructure. Farmers may face challenges in accessing these varieties, and there could be resistance to changing traditional farming practices. Nonetheless, leveraging climate-resilient crops can mitigate the impacts of climate change, improve sustainability, and ultimately contribute to more stable agricultural productivity and farmer incomes.
