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Indian Agriculture Shows Resilience: Low Impact of Drought on Foodgrain Production  
Rising Capital Formation, Plan outlay, Farm Credit to Result in Higher Growth in Agri Sector

New Delhi: December 24,2012

Year-end review: Agriculture



The year 2012 was a challenging year for Indian agriculture as monsoon played truant in the main cropping season. Yet, crop production in the summer season, i.e. kharif, was second best achieved so far. In addition, the current season, i.e. rabi, presents prospects of a good harvest, and total foodgrain production is likely to surpass all previous years’ production except 2011-12 when the country harvested record 257 million tonne foodgrains aided by a good monsoon.

The new-found resilience in Indian agriculture comes from many recent developments, including the area- and crop- specific scheme - the National Food Security Mission, a highly flexible mega-scheme to encourage investment in farming – the Rashtriya Krishi Vikas Yojana, and a high level of coordination between the Centre and States in taking emergency steps to handle drought. The strategies fine-tuned in the recent years are likely to attain a growth rate of about 4% in the years to come.

A glimpse of challenges and the initiatives taken to tackle them, achievements, and special efforts to invigorate Indian agriculture can be seen below.


· India produced a record 257.44 million tonnes of food grains during 2011-12 compared to 244.78 million tonnes in the previous year.

· Production of wheat, estimated at 93.90 million tonnes, is an all-time record. Similarly, production of rice at 104.32 million tonnes is also the highest production ever.

· Cotton production has increased from 33.00 million bales in 2010-11 to 35.20 million bales in 2011-12. (1 bale= 170 kgs) another all-time record.

· Sugarcane production in 2011-12 is estimated at an all-time record of 357.67 million tonnes.

· Against the base of 14 million tonnes at which production had stagnated for over a decade, production of pulses is estimated at17.21 million tonnes in 2011-12, and is likely to cross 18 million tonnes once the figures for summer pulses become available.

· Due to special initiative of the Ministry, around 15 lakh hectares has been brought under summer pulses.

· Oilseed production in 2011-12 is 30.01 million tonnes and that of maize is 21.57 million tonnes.

· Overall increased production is reflected in FCI stocks. Against a buffer norm of 21 million tonnes as on 1st October, 2012 we have a stock more than 66.5 million tonnes. From a position of having to import about 6 million tonnes of wheat in 2006-07, the country today has become a net exporter of wheat and rice.

· According to data received from DGFT, around 7.73 million tonnes of non-basmati rice and 3.59 million tonnes of wheat has been exported pursuant to notification dated 09.09.2011 issued by GOI allowing export of wheat and rice by placing it in the OGL. India’s agriculture export in 2011-12 stood at Rs. 1.86 lakh crore compared to Rs. 1.20 lakh crore in 2010-11, recording growth of 56%.

· Production of fruits during 2011-12 is estimated at 75.38 million tonnes as against 74.87 million tonnes during previous year and production of vegetables during 2011-12 is estimated at 150.59 million tonnes as against 146.5 million tonnes during previous year.

· Per capita availability of fruits has increased from 138 gm/person/day in 2005 to 175 gms/person/day in 2012. Similarly, per capita availability of vegetables has increased from 279 gm/person/day in 2005 to 316gm/person/day in 2012.


· Strategies for rejuvenating agriculture sector to achieve 4% per annum rate of growth have started producing results: average annual growth rate achieved in the agriculture and allied sector during 11th Plan has improved to 3.3% as against 2.5% and 2.4% in the Ninth and Tenth Plan periods, respectively.

· The 11th Five Year Plan period has seen an increase in total food grain production of 173.38 million tonnes over the 10th Five Year Plan period. This despite two years of drought in various parts of the country in 2009-10 and 2010-11.

· Government initiatives such as RKVY, Extending Green revolution to Eastern States, 60000 pulses villages, National Food Security Mission, National Mission on Micro Irrigation, Availability of quality inputs, enhanced farm credit, successful MSP policy etc. have played an important role in achieving this success.

· MSP of major crops such as paddy, wheat and pulses have increased by more than 100% between 2004-05 and 2012-13.

· Gross Capital Formation (GCF) in agriculture and allied sectors as a proportion of the GDP in the sector stagnated around 14% during 2004-05 to 2006-07. It has jumped to 20.1% in 2010-11 at constant 2004-05 prices.

· Plan outlay of Department of Agriculture and Cooperation increased from Rs.15,000 crore in 10th Five Year Plan to Rs.66, 577 crores in the 11th Five Year Plan and is likely to be further increased to Rs.1,34,746 crores during 12th Five Year Plan.

· The flow of agriculture credit in 2011-12 reached Rs.4,68,000 crore from a level of Rs.86, 981 crore in 2003-04. The target for agriculture credit for 2012-13 has been raised to Rs. 5,75,000 crore.

· To make cheap agriculture credit available to farmers for short term crop loan, incentive of additional interest subvention has been increased to 3% for farmers who repay their loan on schedule, thus making the effective rate of interest to 4% per annum only.

· In order to make available fertilizer at affordable prices to farmers, two Biofertilizers, one Organic Manure, two Fortified fertilizers, Urea briquette and Zinc Oxide suspension have been incorporated in Fertilizer Control Order (FCO).

· National Seeds Corporation has introduced 44 newer varieties in the production to improve the product basket.

· Under Grameen Bhandaran Yojana, while the target for XI Plan was to create storage capacity 90.00 lakh MT, the achievement was 150% higher at 135.01 lakh MT. There is an all time high budget allocation with an RE proposal of Rs. 400.00 crore for 2012-13. During current year, capacity of 18.43 lakh MT has been sanctioned so far.

· Allocation under RKVY has been increased to Rs. 63,246 crores during 12th Five year Plan from 25,000 crores allocated during 11th Five Year Plan. RKVY also served as an engine to boost the state’s expenditure on agriculture.

· Bringing Green Revolution to Eastern Region of the country: This scheme was started in 2010-11 with an allocation of Rs. 400 crores, with the objective of increasing crop productivity through promotion of recommended agricultural technologies and package of practices in Assam, Bihar, Chhattisgarh, Jharkhand, Odisha, Eastern UP and West Bengal. Focused efforts with scientific back-stopping led to record production of 55.3 million tonnes of rice in implementing states during 2011-12 against 47 million tonnes in 2010-11. The allocation for the programme during 2012-13 has been increased to Rs. 1000 crore.

· Vidarbha Intensified Irrigation Development Programme: This is a new scheme announced this year i.e. 2012-13, with an allocation of Rs. 300 crore which seeks to bring in more farming areas under protective irrigation in Vidarbha region.

· PPP for Integrated Agriculture Development: This has been launched as a pilot scheme under RKVY during 2012-13 with the objective of augmenting governmental effort in leveraging the capability of private sectors in agriculture development.

· A central Sector Scheme “Development and Strengthening of Infrastructure Facilities for Production of Distribution of Quality Seeds” is being implemented for improving quality of farm saved seeds through Seed Village Programmes to enhance seed replacement rate, boosting seed production in the private sector, helping public- sector seed companies to contribute to enhancing seed production. Under this scheme, 86494 Seed Villages have been organized and 195.64 lakh qtl. of various seeds produced during 2011-12. 4.47 lakh qtl. of seed processing capacity and 2.83 lakh seed storage capacity has been created during 2011-12.


· This year, the country witnessed rainfall deficit in large parts of the country during June and July months which are crucial for Kharif sowing. To tide over this crisis, Government took the following measures:

Ø An inter-ministerial forum was constituted under chairmanship of Secretary (Agriculture) took stock of rainfall, weather forecast, progress of sowing, crop health, level of water in major reservoirs in the country etc., on a weekly basis.

Ø Crop contingency plans for 353 districts were prepared and shared with States.

Ø Periodic video conferences were held with rainfall deficit States.

Ø An Empowered Group of Ministers (EGoM) was constituted under chairmanship of Union Agriculture Minister to review the drought situation and to take quick and timely decisions on policy issues, made several decisions, viz. (i) introduction of diesel subsidy scheme; (ii) enhancement of ceiling on seed subsidy; (iii) up-scaling the central sector scheme on feed & fodder; (iv) waiver of import duty on oil cakes; (v) additional allocation of funds under Accelerated Fodder Development Programme (AFDP); (vi) providing assistance for feed and fodder supplements under National Mission for Protein Supplements (NMPS); (vii) introducing drought impact mitigating interventions for perennial horticulture crops and (viii) reducing interest on rescheduled crop loans.

Ø Besides, additional wage employment upto 50 days per household beyond 100 days under MGNREGS in drought notified areas, interim assistance under calamity component of National Rural Drinking Water Programme (NRDWP) and fast tracking release of installments under NRDWP and Integrated Watershed Management Programme etc. were also announced by EGoM.

· The above measures helped in mitigating the drought to a large extent and contain the decline in food grain production as evidenced from the 1st Advance Estimates. The Kharif foodgrain production this year is estimated at 117.18 million tonnes as against the average production of 118.8 million tonnes during the last 5 years.

PIB Release/DL/1331

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