Going Beyond Agricultural GDP to Farmers’ Incomes

An average Indian farm size is 1.08 ha (Agricultural Census 2015–16), and it has been shrinking over the decades (it was 2.3 ha in 1970–71).

Indian Agriculture Under PM Modi 1.0 2014–2018

There has been no dearth of promises, slogans, new programmes and schemes ever since Mr. Narendra Modi commenced his first innings in 2014 as India’s Prime Minister.

Sources and Drivers of Agricultural Growth in Bihar

Agriculture dominates Bihar’s economy, providing employment to 53.6% of the total workforce, higher than the national average of 46.9% (Labour Bureau 2015–16).

Drivers of Agricultural Growth in Odisha

Odisha is the ninth largest state in India with a share of 4.7% of India’s total landmass. In terms of population, it is the eleventh largest comprising 3.47% of India’s total population, of which more than 83% is rural (Census 2011).

Introduction

Although agriculture accounts for about 16.5% of overall GDP in the country (2019–20), it remains central to the Indian economy as it still engages about 44% of the work force (in 2018–19; it was 47% in 2015–16) as per Labour Bureau, GOI. India is also going to be the most populous country in the world by 2027, according to population projections by the UN, and ensuring food security for this large mass of humanity is a daunting task, more so when it also has the largest number of poor and malnourished in the world (as per World Bank’s Development indicators). An average Indian household spends about 45% of its expenditure on food (this ratio stands at 60% for the poor in bottom expenditure group) (NSSO 2011). No wonder agriculture remains critical for India as it has implications not only for farmers in terms of their income, but also for consumers, especially with respect to ensuring food security to the poor and the malnourished.

Performance of Agriculture in Uttar Pradesh

Uttar Pradesh is an agrarian economy where 47% of the population is directly dependent on agriculture for their livelihood. Even though the share of agriculture in overall GSDP has dropped to only 12% in TE 2017–18, agriculture still remains an important sector because the income of a substantial section of the workforce still comes from this sector.

Synthesis Chapter

As stated in Chap. 10.1007/978-981-15-9335-2_1, the study presented in this book has four pillars and each pillar builds up sequentially and progressively. It starts by evaluating the relation between per capita agricultural GDP and the twin problems of poverty and malnutrition.

Performance of Agriculture in Madhya Pradesh

Madhya Pradesh emerged as the state with the highest growth rate in agriculture. Long clubbed with the so-called BIMARU group of poor northern, central and eastern states, MP successfully broke ranks to set a scorching pace of growth, which has been unparalleled in the past quarter-century. Understanding the factors that helped to drive this growth and drawing lessons for other states at similar levels of development is the main objective of this chapter. Madhya Pradesh’s agricultural GDP increased at 8.1% per annum during 2005–06 to 2016–17, surpassing even record holder Gujarat’s 6% agricultural growth in the same period. The last three years have been even more spectacular: agricultural GDP increased at 11.8% per annum. Keeping this background in mind, this chapter has used secondary data published by the government to study the composition, sources and drivers of agriculture growth in Madhya Pradesh and the lessons that can be drawn for developing states. Although MP has recorded a significant decline in poverty rates from 53.6% in 2004–05 to 35.7% in 2011–12, there is still much to be done to improve the livelihood of the rural population. Moreover, MP’s per capita income is low, standing at Rs. 51,798 per annum (FY14 at current prices) as compared to the national annual average income of Rs. 74,380. Although it is much better than that of Bihar (Rs. 31,199) and Uttar Pradesh (Rs. 36,250), it remains way below top-performing states like Sikkim (Rs. 176,491), Maharashtra (Rs. 114,392), Haryana (Rs. 133,427) and Gujarat (Rs. 106,831). Therefore, the study also makes policy suggestions to bolster agricultural growth in MP.

Way Forward

While the chapters until now in this book tell us about what the situation is and what explains the situation, this chapter builds on these and proposes suggestions for the future.

Performance of Agriculture in Punjab

Punjab had been a star performer in agriculture during the heydays of the green revolution. Its agricultural GDP grew at 5.7% per annum during the period from 1971–72 to 1985–86, which was more than double the growth rate of 2.31% achieved at all-India level in the same period. It was Punjab’s spectacular performance, first observed in large wheat surpluses and then in rice, that helped India free itself from food aid under the PL 480 and its associated political strings. Punjab became a symbol of India’s grain surpluses, giving India much needed food security. But after 1985–86, the green revolution showed signs of waning and Punjab’s agricultural growth slowed to 3% per annum over the period 1985–86 to 2004–05, almost the same as achieved at the all-India level. But the real challenges to Punjab’s agriculture emerged when its growth crashed to just 1.6% per annum during 2005–06 to 2016–17, which was less than half the all-India agricultural GDP growth of 3.6% over the same period. Owing to the earlier years of high agricultural growth, Punjab had one of the lowest poverty ratios (7.7% in rural Punjab) as per Tendulkar poverty line in the country in 2011–12, which was almost one-third the level of poverty at the all-India level. Providing food security to the country and reducing its own poverty to the lowest levels within India has been Punjab’s most laudable achievements.