A Study of the India’s Agriculture Sector: Issues, Prosects and Performance

IRJMST Vol 5 Issue 9 [Year 2014] ISSN 2250 – 1959 (0nline) 2348 – 9367 (Print)

International Research Journal of Management Science & Technology http://www.irjmst.com Page 68

A Study of the India’s Agriculture Sector: Issues, Prosects and Performance

Vijay Kumar Rajiv Gandhi National Fellow,

Dept. of Applied Economics, University of Lucknow

Abstract Economist believes that Indian Agriculture sector achieved its growth upto remarkable level in last few

decadess in the terms of Production, Output Growth etc. However there are various commodities in

agriculture and allied sector which makes India Major producer in world market such as sugarcane,

cotton, wheat, rice, spices, poultry farming, fisheries, livestock, milk, jute, pulses etc. The data of 12th

five year plan shows that the target for the growth of agriculture and allied sector was 4.0 per cent

annully and the actual achievement was 3.6 per cent annually in the GDP. Although data shows that

agriculture and allied sector did not acheved its target which was 4.0 per cent but in case of production,

it achieved a remarkable growth rate as compare to the ratio of population. World trade data shows that

in a critical condition where other countries was facing slow down in agriculture sector India still has

its positive growth in the export of its agriculture and allied sector commodieties. This paper is based on

the secondary data which aims to analyse the pattern of growth of agriculuture and allied sector in

India. Data have been collected from various government agencies, ministries, RBI etc.

Keywords: Agriculture growth, trade, WTO etc.

Introduction- The science of farming including cultivation of the soil and rearing of animals is called

“agriculture”. The term agriculture has been derived from the Latin word ager meaning field, and

cultura meaning cultivation. Same kind of plants like cereal (grains) crops, Pulses and Oil seeds, fibre

crops etc. cultivated and grown in large quantities in a field are known as crop plants. There are various

variety of plants in cereal category but in India generally rice, wheat, maize are mostly cultivated.

Figure: Types of Crops in India

Sl. No. Types of Crops Examples

1. Cereals or grain crops Wheat, Rice, Maize, Barley,

2. Oil Seeds Soya bean, Mustard, Ground, Sunflower

3. Fibre crops Cotton, Jute

4. Pulses (Dals) or Legumes Beans, Peas, Grams

5. Root crops Carrot, Sweet Potato

Agriculture data shows that the share of agriculture in GDP is decling countinously year to year like in

the year of 2012 it was just 14.1 per cent but the role of agriculture is much higher than the other sector

for the economic growth and development in terms of employment generation, food safety etc. Data of



2001 census shows that the 58.2 per cent of the Indian population was envolved in agriculture sector for

the employment. The target in the 12th five year plan for the agriculture sector was 4.0 per cent and the

actual achievement was 3.6 per cent although it was less than the target but still production growth was

the remarkable. This growth rate was the higher then the growth rate of 9th

and 10th

five year plan where

achievement was only 2.5 per cent and 2.4 per cent respectively.

Literature Review

1. Herberler (1959) –herberler focuses on the export sector and conclude in his study that the

export of any country is directly or indirectly related with the economic growth of that

country. According to him, Trade is the center point to give a boost to any economies.

2. Dutta (1964), Sinha (1986), Ram and Rath (1989)etc analyzed the demand pattern of

India’s export sector on the aggregate level. They studies various items which are exported

by India and some other economists such as Da Costa (1965), Biswas (1983), Lucas (1988),

Virmni (1991) also studied the same issue and divided total export into various groups on the

aggregate level.

3. Panchmukhi (1978) &Sainy (1979) –Panchmukhi analysis was focuses on the government

policy for the promotion and support to foreign trade and also studied the overall trade of

India during the period of 1960 but Sainy not only studied the government policy rather then

he tried to find the loop wholes for the policy formation and also related the foreign trade

with the Economics development of India. He considered foreign trade as an important key

factor for the overall economic growth.

4. Sekhar (2003) – Shekhar works on agriculture export especially on the export of rice of

India. He also tried to analyze the role of trade liberalization policy on agriculture export and

also studied the role of major exporter of rice at world level. He conclude in his study that the

income level of the rice importing country influenced the demand of rice by exporting

company.

5. Chand (2004) - He analyzed in his study about the competitiveness and export performance

of the Indian agriculture and the policy change due to Trade reform like reducing control on

the exchange rate and export process leads to increase in export performance. Various odds

like Technical Barriers to Trade and sanitary/Phyto-sanitary and infrastructural bottlenecks

etc. are the main determinants for the better export growth of livestock, horticultures. He

conclude that for various products like Sugar, Rice, Cotton, India has advantages to export

these product because of high level of production and favorable environment condition but

for the Wheat, they do not have any advantages to compete in foreign market.

6. Kaundal (2005) – Kaundal study was based on the impact of trade reform on the export

sector and he analyzed the causes, pattern of India’s export during the period of 1970 to

2002. He concluded that the share of some traditional goods like Jute, Cotton, Tea has been

fallen in overall export and on the other hand non-traditional goods like manufactured goods,

machineries etc. share has been increased in overall export.

7. Raju (2005) – Raju worked on the role of agriculture sector for the employment generation

and its role in GDP and economic growth. He studied the agreement on agriculture (AoA)

which was formed by World Trade Organization and also studied various other issue

regarding with agriculture growth in developing countries.

8. Chakraborty and Singh (2006) –They took agricultural subsidy as a main factor for the

increase and decrease of agriculture trade. They concluded that subsidy on agriculture is

favorable for developed country but for developing country it works as a hurdle for free trade



of agricultural product so they are not favorable negotiation. According to him negotiations

should be in such a way which can be beneficial for developing country also.

9. Ramphul (2006) - He analyzed the performance of agricultural trade of various developed

and developing country. He also analyzed the impact of WTO agreements and negotiation on

the agricultural trade at world level. He concluded that WTO has adverse effect on

agricultural trade at world level.

10. M. Ramesh, M. Chandrayya and M. Sankara (2009) - According to their point of view,

WTO has a direct and indirect relationship with various sector of Indian economics. Indian

agriculture sector affected so much from the WTO. WTO also have its impact on Indian

former because they are directly associated with agriculture and their livelihood depends on

agriculture sector so they affected so much by government policy to subsidies agriculture and

also from the policy of WTO. There is also a very big challenge for the Indian government to

protect these former on agriculture sector from the side effects of WTO and also a big task to

improve its competitiveness for the international market because after economic reform and

adoption of LPG India is getting a tough competition from foreign companies therefore

government is trying to make more favorable policy such as market policy, agriculture policy

to make former more capable for the production. There are various institutions which provide

financial help, training to the former for better agriculture growth.

11. P. Arunachalam (2009) - He studied the reasons that why agriculture is one of the main

sector for the study by various magazines, newspapers, books and academician, politicians

etc in special reference with WTO because there are various difference for the developed and

developing agriculture sector is in developed countries in WTO.

Objective of the Study: The objective for the the following research study mentioned

below-

To find out the Agriculture growth pattern in India.

To analyze whether agriculture sector achieving positively growth or negatively growth.

To understand the role of India’s Agriculture sector at world level.

AGRICULTURE ROLE IN GROSS DOMESTIC PRODUCT IN INDIA

It is observed that share of Agriculture and Allied Sector in overall GDP (Gross Domestic

Product) in India has been decreasing every year like it was 15.2 per cent during the 11th

five year plan

but in 2013-14 it is only 13.9 percent. In India, Agriculture is one of the most important sector in

providing employment, Data of censes 2011 shows that it accounts for almost 54.6 per cent employment

to population it is also clearly indicating after comparing the employment data of Census 2001 and

Census 2011 that number of cultivators also decreased from 127.3 million in 2001 to 118.7 million in

2011 which is showing the shifting of employment from farm to non-farm employment.



Table: Agriculture Sector: Key Indicator (per cent at 2004-05 prices)

Sl.

No.

Item 2009-10 2010-11 2011-12 2012-13 2013-14

1 Growth in agri GDP 0.8 8.6 5 1.4 4.7*

Share in total GDP 14.6 14.6 14.4 13.9 13.9*

Of which, Agriculture 12.3 12.4 12.3 11.8 NA

2 Share in total GCF 7.3 6.3 7.0 7.1

NA Of which, Agriculture 6.7 5.8 6.5 6.5

3 GCF as per cent of agri GDP 20.1 18.5 20.8 21.2

NA Of which, Private sector 16.7 15.7 18.0 18.1

4 Agri exports (incl. marine

products) as per cent of total export

8.2 8.0 10.1 11.8 11.9 (P)

Source: Central Statistics Office (CSO) and Directorate General of Commercial Intelligence and

Statistics (DGCI&S).

Notes: *Quarterly Estimates of GDP as of 30 May 2014; NA – Not Available; GDF – gross capital

formation; P – Provisional

According to DGCI&C data for the year of 2013-14 (Provisional) shows that the growth rate of

agriculture GDP was 1.4% and 4.7% in the year of 2012-13 and 2013-14 respectively. The data of last

ten year shows that the Indian agriculture achieved negative growth rate.

In India, State government are mainly responsible for the agriculture sector growth and their

primary responsibility is to increase production, to increase productivity, to increase potential of

agriculture sector, to increase or enhance the income of the farming community. To fulfill all these issue

central government helps financially and non-financially and provides various aids, subsidy etc. to state

government for the betterment and growth of agriculture. Central government sponsored through

various programmes and also helps through various schemes.



Table: Statistical data of major crops in 2013-14* (Area, Production, Yield), with % change over

2012-13.

(Area: million Ha; Prod: Million tonnes; Yield: kg/ha)

Group/Commodity Area Production Yield

Food grains (a)

Rice

Wheat

126.2 (4.47)

43.9 (2.57)

31.3 (4.33)

264.4 (2.88)

106.3 (1.05)

95.8 (2.46)

2095 (-1.55)

2419 (-1.75)

3059 (-1.86)

Coarse cereals

Maize

Bajra

25.5 (2.98)

9.3 (6.90)

7.9 (8.22)

42.7 (6.64)

24.2 (8.52)

9.2 (5.75)

1672 (2.83

2602 (1.40)

1161 (-3.09)

Pulses

Gram

Tur

25.4 (9.01)

10.2 (20.00)

3.9 (0.00)

19.6 (7.10)

9.9 (12.50)

3.4 (13.33)

770 (-2.41)

974 (-5.98)

857 (10.44)

Oilseeds

Groundnut

Rapeseed and mustard

Cotton(b)

28.2 (6.42)

5.5 (17.02)

6.5 (1.56)

11.7 (-2.50)

32.4 (4.85)

9.5 (102.10)

7.8 (-2.50)

36.5 (6.73)

1149 (-1.63)

1723(73.17)

1208 (-4.28)

529 (8.85)

Sugarcane 5.0 (0.00) 348 (2.11) 70 (0.00

Source: Directorate of Economics and Statistics, Department of Agriculture and

Cooperation (DAC).

Notes: *3rd Advance Estimates; a - Includes cereals, coarse cereals and pulses;b - million bales of 170

kgs each; Figures in brackets indicate per centchange over 2012-13.

The table mentioned above shows the data of some principle commodity in of 2013-14 for the change in

area, production and yield of this commodity. The table is based on the 3rd

Advance Estimation (3rd

AE)



which shows that food grains has increased about 126.2 million hectare, Coarse cereals 25.5 hectare,

Pulses about 25.4 hectare, Oil seeds 28.2 hectare and sugarcane about 5.0 hectare and the data of

production of food grain is about 264.4 million tonnes, Coarse cereals is about 42.7 million tonnes,

pulses about 19.6 million tones, oilseeds about 32.4 million and the data of yield is shown in kg/ha

where food grains about 2095 kg/ha, coarse cereals is about 1672 kg/ha, pulses is about 770 kg/ha,

oilseeds is about 1149 kg/ha and sugarcane 70 kg/hectare.

NATIONAL FOOD SECURITY MISSION (NFSM)

This mission has setup a new target for the production of food grains up to 25 million tonnes up to the

2016-17 after achieving the target of 20 million tonnes in last year. The targets for 2016-17 for

following commodities are:

Rice – 10 million tonnes

Wheat – 8 million tonnes

Pulses – 4 million tonnes

Coarse Cereals – 3 million

Government also has a plan to help farmers through organizational help named as Former Producer

Organizations (FPO’s) which aim is to improving cropping system and also focus on small and marginal

farmers. Government also helps through various funding programmes such s Rastriya krishi Vikas

Yojana (RKVY)

For the 12th five year plan this scheme funds 35% in production growth 35% in infrastructure and assets,

20% in sub schemes, 10% in flexible fund. Another scheme named Bringing Green Revolution of

Eastern India (BGREI) has allocated 1000 Crore rupees. In the year of 2003-14 which increased paddy

production in various states (those who implementing this scheme) by 7 % in the year of 2012-13 over

2011-12.


International Research Journal of Management Science & Technology http://www.irjmst.com 4

Table: Aggregate Growth Rates of Principle crops (Area, Production, and Yield) during 1980-81

to 1989-90, 1990-91 to 1999-2000

A - Growth rate of area, P – Growth rate of production, Y – Growth rate of Yield (% per annum)

Crop (Base: TE 1981-82=100) (Base: TE 1993-94=100)

1980-81 to 1989-90 1990-91 to 1999-2000 2000-01 to 2013-14

A P Y A P Y A P Y

Rice 0.41 3.62 3.19 0.68 2.02 1.34 0.00 1.82 1.82

Wheat 0.46 3.57 3.10 1.72 3.57 1.84 1.35 2.65 1.29

Coarse

Cereals

-1.34 0.40 1.62 -2.12 -0.02 1.82 0.25 2.96 2.70

Pulses -0.09 1.52 1.61 -0.60 0.59 0.93 1.59 3.72 2.10

Sugarcane 1.44 2.70 1.24 -0.07 2.73 1.05 1.34 2.10 0.75

Nine

Oilseeds

1.51 5.20 2.43 0.86 1.63 1.15 2.35 4.71 2.31

Cotton -1.25 2.80 4.10 2.71 2.29 -0.41 3.22 13.53 9.99

Source: Department of Agriculture and Cooperation.

Note:TE – Triennium Ending, Nine Oilseeds includes, Soya bean, sesamum, groundnut, Niger seed,

safflower, rapeseed and mustard, sunflower, linseed, castor seed as per 2nd

AE (Advance Estimation)

(Base: TE 1981-82=100), and for 2000-01 to 2013-14 (Base: TE 1993-94=100)

Some of the major changes occur in the field of Area, Production and Yield during last few decades

such as –

Rice – Following Data shows that Area of Rice (% per annum) has been decreased from 0.41 % in 1980

to 0.00 % in 2014. Production of Rice decreased from 3.62 % per annum in 1980-81 to 1989-90 to 1.82

% per annum in 2000-01 to 2013-14 and Yield of Rice also decreased from 3.19% in 1980-90 to 1.82 %

in 2000-14.

Wheat - Data shows that Area of Wheat (% per annum) has a tremendous growth rate in the from 0.46

% per annum in 1980-90 to 1.35 % in 2000-2014. But Production of Wheat decreased from 3.57 % per

annum in 1980-81 to 1989-90 to 2.65 % per annum in 2000-01 to 2013-14 and Yield of Wheat also

decreased from 3.10% in 1980-90 to 1.29 % in 2000-14.

Coarse cereals-Area of Coarse Cereals got a positive growth (0.2%) which was negative earlier in

1980-90, Production level increased from0.40 % in 1980-90 to 2.96 % per annum in 2000 – 14. Yield

has achieved a growth level from 1.62 % in 1980 – 90, 1.82 % in 1990 – 2000 and 2.70 % in 2000-14.

Pulses – The growth rate of Area in case of pulses has achieved positive growth rate from the negative

growth rate which was -0.09 % in 180-90 and 1059 % per annum in 2000-14. Production has increased

from 1052 % per annum in 1980 to 3.72 % in 2014.



Sugarcane - The growth rate of Sugarcane Area was 1.44 % per annum during 1980 – 90 which was

later in negative -0.07 % per annum during 1990 to 2000 but in the 2000 to 2014 it achieved a positive

growth rate of 1.34 per cent per annum but Production of sugarcane has been decreased from 2.70 % per

annum during 1980 – 90 later which was almost same 2.73 % per annum during 1990 to 2000 but during

2000 to 2014 it is still negative with 2.10 per annum.

Nine Oilseeds - Data shows that Area of Oilseeds has a negative growth rate in the from 1.51 % per

annum in 1980-90 to 0.86 % in 1990 – 2000 and later on in during the year of 2000 – 2014 it was

achieved positive growth rate which was 2035 % per annum. But Production of Wheat decreased from

5.20 % per annum in 1980-81 to 1.15 % in 1989-90 but it was 4.71 % per annum in 2000-01 to 2013-14

and Yield of Oilseeds also decreased from 2.43 % in 1980-90 to 2.31 % in 2000-14.

Cotton -Growth rate of Cotton Area achieved a positive growth rate after 1980.It was -1.25 % per

annum during 1980 – 90 which was later in positive 2.71 % per annum during 1990 to 2000 and during

the year of 2000 to 2014 it achieved a tremendous positive growth rate of 3.22 per cent per annum.

Production of sugarcane was almost same in the decades of 80’s and 90’s 2.80 % per annum during

1980 – 90 and 2.71 % in 1990 – 2000 but during the year of 2000 – 2014 it achieved a high growth rate

up to 13.53 % per annum, Yield of Cotton decreased from 4.10 % in 1980-90 to -0.41 % in 1990 – 2000

but later on it also achieved high growth rate of 9.99 % per annum during the year of 2000 – 2014.

Table: Statistical Data of Selected Economic Indicators in India.

Economic

Indicator

Unit 1950-51 1980-81 2010-11 2011-12

(R)

2012-13

(P)

GDP at factor

cost (at current

prices)

( Rs.

Crore)

10036 132520 7266966 8353495 9461013

GDP at factor

cost (at 2004 – 05

prices)

( Rs.

Crore)

279618 641921 4937006 5243582 5505437

Index of

agricultural

production

(Base: T.E 2007-

08=100 Onward

2007-08)

46.2 102.1 121.1 125.3 122.8

Output

(a) Food grains Million

Tonnes

50.8 129.6 244.5 259.29 255.36(e)

Foreign Trade

(i) Exports ( Rs.

Crore)

606 6711 1142922 1465959 1635261

(US $

million)

1269 8486 251136 305963.9 300571

(ii) Imports ( Rs.

Crore)

608 12549 1683467 2345463 2673113

(US $

million)

1273 15869 369769 489319.5 491487



P: Provisional; R: Revised estimates; e: 4th Advance Estimates.

Source: Economic Survey 2012-13, Ministry of Finance and Handbook of Statistics on Indian Economy

2013, RBI

In this table some economic indicator has been mentioned like GDP at factor cost, Agriculture

Production, Output, Foreign Trade etc.

GDP at factor cost ( at current prices) - GDP data shows that GDP at factor cost ( at current prices) in

the year of 1950-51 was just only 10036 Rs. Crore and 132520 Rs. Crore in 1980-814 and in the decade

of 2010 it was 7266966 Rs. Crore and according to Economic survey 2012-13 Provisional data of 2012-

13 was 9461013 Rs. Crore.

GDP at factor Cost (at 2004-05 price) - In case of GDP at factor Cost (at 2004-05 price) was 2796.18

Rs. Crore in 1950-51 and it was 641921 Rs. Crore in the year of 1980-81 Rs. Crore and in the decades of

2010 it was Rs. 4937006 Crore and at last year 2012-13 GDP at factor price (at 2004-05 price) was

5505.437.

Food Grains Output - Data of food grains output shows that in the year of 1950-51 output of food

grains was 506 million tonnes and it increased to 129.6 million tonnes in the year of 1980-81 and it was

244.55 million tonnes in 2010-11 and last year 2012-13 data shows that food grains output was 255.36

million tonnes according to 4th advance estimates.

International Trade –Export data shows that in year of 1950-51 total export of India was only 606 Rs.

Crore in Dollar it was only 1269 US$ million which increased year by year and in the year of 1980 – 81

total export of India was 6711 Rs. Crore or 8486 US$ million and in 2010-11 it was 1142922 Rs. Crore

or 251136 US $ million and last year data (2012-13) total export was Rs. 1635261 Crore or 300571 US$

million.

Import of India increased more in the ratio of export it was 608 Rs. Crore (1273 US$ million) in 1950-

51 and it increased 12549 Rs. Crore (15869 US$ million) in 1980-81 and in the decade of 2010 total

import was Rs. 1683467 Crore) 369769US$million). At last year data (1012-13) total import of India

was Rs. 2673113 Crore (491487 US $ million).

Graphical Representation of above table:

Data mentioned above shows that every year government increasing its budget for the agriculture

growth. In the year of 1991-91 budget estimate was 1041.35 Rs. Crore. And revised estimate was

0

5000

10000

15000

20000

25000

1991-92 2001-02 2004-05 2009-10 2010-11 2011-12 2011-12

Rs.

Cro

re

Year

Budget Estimate in Rs. Crore

Revised Estimate in Rs. Crore

Actual Expenditure in Rs. Crore



1016.936 Rs. Crore but Actual expenditure was less than estimation it was 957.86 Rs. Crore. After this

decades in the year of 2001-02 budget estimation was 1985.00 Crore and revised estimate was Rs

1985.00 Crore but Actual expenditure was less than expenditure which was Rs 1792.92 Crore.

Budget estimates again increased after 10 year which was Rs 15042.00 Crore in the year of 2010-11 and

revised estimate amount was Rs 17254.00 Crore and actual expenditure was Rs 17052.59 Crore.

Last year 2012-13 budget estimates increased from 17122.87 Rs Crore in 2011-12 to 202508.00 Rs.

Crore in 2012-13 and revised estimation data show that it was 16515.05 Rs. Crore in 2011-12 and

17867.32 Rs. Crore in the year of 2012-13 where Actual estimate was 16354.70 Rs. Crore in 2011-12

and 17765.24 Rs. Crore in 2012-13.

So data shows that budget estimate in the year of 1991-92 was just only Rs. 1041.35 Crore only but after

22 year it increased 20 times which was 20208.00 Rs. Crore in the year of 2012-13. Where Actual

Expenditure on Agriculture also increase almost 18 times which was just 957.86 Rs. Crore in 1991-92

and 17765.24 Rs. Crore in the year of 2012-13

Conclusions: Study shows that various compotants of agriculture sector such as share in GDP, share of

agriculture export, Area, Production, yield, National food security mission status, export and import of

agriculture etc. Growth in agriculture GDP shows that in last five year growth have been declined in per

centage terms whether the share in total GDP also declined from 14.6 per cent in 2009 to 13.9 per cent

in 2014. Agriculture export including marine product as per cent of total export increased in percentage

terms from 8.2 % to 11.9 per cent.

References

http://dgft.gov.in/

www.dgciskol.nic.in/

commerce.nic.in/

Economic survey of India various addition

World Trade report 2014

Annual report of the various ministry of India.

Ph.D Thesis by Vijay Kumar “An Analytical Study of WTO on Indian Agriculture Sector”.

http://dgft.gov.in/

A Study of the India’s Agriculture Sector: Issues, Prosects and Performance

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