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Agriculture: Saving India yet again?

Some accounts of farmers beefing, while others of them enjoying increased yields amidst the pandemic has fomented a nationwide debate. How is Bharat, housed with warmth in the slums and villages of the country, faring with the economic downfall caused by the virus? Has the divide expanded, with distressed farmers falling into deeper socioeconomic potholes? Or have these 6 months been riveting enough to ensure brighter skies? Albeit the farm bills chaos, what may have not gone under the scanner is the fact that as the economy contracted by 23.9 per cent for Q1, it was the agriculture sector that brought a glimmer of optimism, with the Gross Value Added (GVA) increasing by 3.4 per cent. But with the subcontinent in recession mode, does the sector have what it takes to pick the 5th largest economy up?

To understand the narrative, let's dive deep into what all factors have assisted the farm economy -

Rabi, Rainfall, Rejoice and Reproval

While the floods across various cities have marred people’s activities, there is a flip, and a much shinier side. A 9.8 per cent increase in southwest monsoon rains has been recorded, making it run 12 days ahead of schedule. This has also led to a 70% higher water storage. But what impact has it had?

Well, the rabi crop procurement and the kharif crop sowing have been largely facilitated. The total foodgrain production of 292 million tonnes is the highest it has ever been. A good return from the same has been the case, with a reported high MSP government procurement. However, the fact is that only 16.2% of wheat farmers sell their produce at the MSP, while the rest are compelled to sell at lower prices. But it might have been the former, especially for wheat and pulses to provide for the relief measures. As per the World Bank, there has also been a 7% increase in kharif land and 13.9% increase in sowing, which promises a good yield for the upcoming season. Again, the downside here is that the increase might be solely due to a rise in personnel in the already overpopulated agricultural sector, owing to reverse migration due to the pandemic. Another positive takeaway is an increased food inflation rate in Quarter 1, denoting continuous and healthy demand. Critics say that the same happened due to disruption in supply chains, because market arrivals actually dropped which only shifted demand curves to the left, reducing wholesale prices. Losses upto around Rs. 25000 Crore have been incurred by the poultry sector, with milk and meat failing to sustain their pre-pandemic profitability. Nonetheless, many crops like nutri-cereals, mustard, cotton, chana, sugarcane and oilseeds have prospered, showing encouraging signs. Even the sales of two wheelers and tractors in agriculture areas has gone up, in stark contrast to automobiles in the urban areas.

Measures and MGNREGA

As the lockdown hit, there was a mass exodus of migrant workers. These blue collar workers form a major part of India’s workforce, but were left reeling by the closing of the economy. Sectors of construction and manufacturing fell by about 45%. With pockets getting lighter each passing day, there was an exigent need for various relief measures. The 20 lakh crore economic stimulus was directed towards the rural sector, and a host of schemes were announced.

Union ministries of Rural Development, Food and Public Distribution System strengthened operations and disbursed cash. Over 1 Lakh crore under the Atmanirbhar Bharat scheme was dedicated to agriculture infrastructure only. Support to Farmer Producer Organisations, Cooperatives and Micro enterprises was vented out, and several avenues like dairy, bee-keeping, fishing and herbal cultivation were taken care of. There was assistance in terms of cold storage facilities, processing units and collection centres. Fiscal direct benefit transfers to farmers under the PM-Kisan Yojana of around 16750 crores helped finance foodgrain production. Even the in-kind support to the BPL population through the PM-Garib Kalyan Anna Yojana, monetary incentives through the PM-Jan Dhan Yojana and benefits to the women and elderly not only helped the sector take the hit, but also rise up back to its feet. However, it is alleged that total fresh spending was low with minimum cash outflow, and many things were already included in past schemes.

A mammoth 40000+ crores were allocated to MGNREGA alone, to cater to the retreating migrant unorganised workers, increasing the budget to 101500 crores. The daily wage rate was also increased from Rs. 182 to Rs.202. In June 2020, 84% more work was available as compared to June 2019. Between April to July, around 153.16 crore person-days were created, adding to employment opportunities. However, payment delays and disguised unemployment pose difficulties to the robust system.

Thus, while a recession period is underway, the rural and agri sector is a beacon of hope amidst the thick of things. While several factors have proved handy for the backbone of our economy, effective implementation is the need of the hour, if at all the nation puts onus on the sector to pull India out of the deepening crisis. HDFC Chairman Deepak Parekh said the COVID-hit economy is likely to recover on the back of the rural sector and “signs of the wheels of the economy beginning to churn are evident”. But it might be too early and uncalled for to rely on the same, as gaps need to be filled. The aim should be towards a more cohesive, integrated rural urban relationship, driving development.

The “annadata” to our huge population has been monumental over the years to say the least. As unemployment rates shoot up, it's time we exploit our rural prowess to the maximum potential. It's time Bharat gains more importance and backing than not only India, but ever before.


Sarthal Agarwal



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