Examine the necessity of transitioning from traditional to high-value agriculture for the economic viability and sustainability of the agricultural sector. Assess how enabling farmer access to domestic and global markets can achieve this.

Why?

As India aims for Viksit Bharat by 2047, transitioning towards high-value agriculture emerges as crucial for enhancing economic viability and sustainability, necessitating a strategic shift to innovative practices and expanded market access.

Approach:

• Introduce your answer by highlighting the current state of agriculture in India, the challenges posed by climate change and how it demands a transition towards high-value agriculture.
• In the main body, discuss the benefits of shifting to high-value agriculture for improving farmer incomes, ensuring climate resilience, employment opportunities, etc. Next address how access to wider markets, both domestic and global, is crucial for the success of high-value agriculture, impacting price realization, quality improvement, technology adoption, etc.
• Conclude with the assertion that transitioning to high-value agriculture and enhancing market access are vital steps towards achieving economic viability in agriculture, aligning with the goals of Viksit Bharat.

Answer:

Agriculture, contributing roughly 18% to India’s GDP and engaging about 45% of the workforce, is pivotal for the nation’s socio-economic fabric. Yet, with the agri-GDP growth rate dropping to a mere 0.7% in 2023-24 and climate change challenges, the sector stands at a crossroads, demanding a transition towards high-value agriculture for the economic viability and sustainability of the sector.

Need for Transitioning from Traditional to High-Value Agriculture:

• Enhancing Farmer Incomes: High-value agriculture, including horticulture, dairy, poultry, and aquaculture, offers higher profitability compared to traditional crops like cereals. By transitioning, farmers can significantly increase their income levels.
  • National Dairy Plan Phase I, aimed at increasing the productivity of milch animals and thereby improving incomes of rural households.
• Climate Resilience: Diversification into high-value and less water-intensive crops can make agriculture more resilient to climate change and weather variabilities.
  • Promotion of millets, under the Initiative for Nutritional Security through Intensive Millets Promotion (INSIMP).
• Market Demand: With rising incomes, urbanization, and changing consumer preferences, there is a growing demand for high-value agricultural products. Meeting this demand can open new markets for farmers and agribusinesses.
  • The increasing consumption of dairy products in urban areas.
• Employment Opportunities: High-value agriculture and its associated value chains (processing, marketing, logistics) offer substantial employment opportunities, contributing to rural development and urbanization trends.
  • The horticulture sector’s labor-intensive nature has made it a significant source of employment.
• Export Potential: High-value agricultural products have a greater potential for export, earning valuable foreign exchange for the country.
  • India’s export of marine products reaching an all-time high.
• Nutritional Security: Transitioning to high-value agriculture can also contribute to nutritional security by diversifying diets away from staple grains to include more fruits, vegetables, and animal protein.
• Technological Adoption: The shift towards high-value agriculture encourages the adoption of modern agricultural practices and technologies, including precision farming, greenhouse cultivation, and organic farming, fostering innovation and sustainable use of natural resources.

Significance of Access to Domestic and Global Markets:

• Expansion of Market Reach: Access to broader markets enables farmers to sell their products beyond local boundaries, increasing sales opportunities and reducing dependency on local demand fluctuations.
  • The e-NAM initiative allows farmers to sell their produce online across India.
• Improved Price Realization: By accessing larger and more diverse markets, farmers can achieve better price realization for their products, often surpassing what local markets offer.
  • Indian mango exporters tapping into Middle Eastern and European markets.
• Stimulus for Quality Improvement: Exposure to domestic and international markets drives farmers and agribusinesses to improve the quality of their produce to meet stringent standards, enhancing competitiveness.
  • The adoption of Good Agricultural Practices (GAP) by grape farmers in India.
• Diversification and Risk Reduction: Access to multiple markets helps in diversifying market risk. If one market experiences a downturn, others may not, providing a safety net for producers.
• Encourages Innovation and Value Addition: The need to stand out in competitive markets encourages innovation in products and processes, including value addition, which can significantly increase farmers’ income.
  • The development of ready-to-eat and easy-to-cook food products from traditional crops.
• Promotes Sustainable Agricultural Practices: International markets, in particular, often have strict requirements regarding environmental sustainability and social responsibility.
  • Organic farming practices being adopted by Indian farmers.
• Access to Financing and Investment: Successful market linkage, can attract financing and investment, enabling farmers to upgrade their agricultural practices and infrastructure.
  • Farmer Producer Organizations (FPOs).
• Boosts Economic Growth: By increasing exports and reducing the trade deficit, access to global markets contributes to the overall economic growth of the country.
  • India’s Basmati rice exports.

The shift to high-value agriculture is pivotal for India’s agrarian economy, enhancing profitability and sustainability. Facilitating farmers’ access to broader markets through supportive policies can revolutionize agriculture, elevating farmer incomes and aligning with the Viksit Bharat vision for widespread prosperity and inclusivity.

‘+1’ Value Addition:

• For Viksit Bharat, robust and resilient agriculture is essential. Challenges like droughts, inflation control efforts, and outdated policy measures—such as export controls and price interventions—underscore the need for modern strategies beyond the crisis-driven approaches of the past.
• The agenda for agriculture in Viksit Bharat has to move to high-value agriculture with a value chain approach, from plate to plough, that is, a demand-driven system.