Economic Survey: The agri strategy for India that can turn problem areas into sources of strength

The Economic Survey 2023-24, released on July 22, marked out the agriculture sector as one area ripe for and in need of a country-wide dialogue.

The survey pointed out that agriculture and farmers are crucial to a nation, and India is no exception. India provides substantial support: free or nearly free water and electricity, untaxed incomes, and subsidies for fertilisers, it said.

As per govt data, farmers receive a minimum support price (MSP) for 23 commodities, monthly cash through the PM-KISAN scheme, and frequent loan write-offs by national and sub-national governments.


Indian governments allocate significant resources to support farmers, the survey said. However, there is an argument to be made that farmers could benefit more from a re-orientation of existing and new policies.

Agriculture sector provides livelihood support to about 42.3% of the population of India and has a share of 18.2 per cent in the country’s GDP at current prices. As a sector, it has been buoyant, which is made evident by the average annual growth rate of 4.18% at constant prices over the last five years.

It, however, can't be denied that there are a host of difficult, entrenched issues, which have kept the sector from reaching the next level, where it can be among the economy's saviours.

A range of policies by national and sub-national governments, often working at cross-purposes, is harming farmers' interests, damaging soil fertility, depleting groundwater, polluting rivers with nitrous oxide emissions, and undermining public health with diets rich in sugar and carbohydrates instead of fiber and protein, the survey observed. These conflicting policies also starve crops of essential nutrients, it pointed out.

The survey noted that untangling these policy issues will yield immense benefits, restoring faith in the state's ability to guide the nation toward a better future. Beyond socio-economic advantages, it will enhance the self-confidence and capabilities of the state, leading to more effective governance in the agricultural sector.

The survey underlined how traditional development models saw economies transition from agriculture to industrialisation and then to value-added services. Currently, at a time when technological advancements and geopolitics are challenging this progression, trade protectionism, resource hoarding, overcapacity and dumping, onshoring production, and the rise of AI are limiting the opportunities for countries to drive growth through manufacturing and services, it highlighted.

This new situation has challenged policymakers to rethink conventional wisdom, the survey said. To turn agricultural sector into the big solution, going back to traditional farming practices and reorienting policies could "increase value addition in agriculture, boost farmers' incomes, and create opportunities for food processing and exports," the survey noted.

Such a strategy can make the farming sector both appealing and productive for India's urban youth, the survey said. By addressing the issues caused by current policies, these problem areas could become sources of strength for India and serve as a model for both developing and developed nations, it noted.

Besides, rising importance of allied sectors such as animal husbandry, dairying, and fisheries in increasing farmers’ income suggests that greater emphasis should be placed on tapping into the potential of these activities to boost farmers’ incomes, the survey said.

Smallholder farmers’ incomes cannot be raised by producing rice, wheat, or even millets, pulses and oilseeds; they need to move to high-value agriculture – fruits and vegetables, fisheries, poultry, dairy and buffalo meat, it noted.

Once the incomes of smallholders increase, they will demand manufactured goods, spurring a manufacturing revolution, the Economic Survey 2023-24 highlighted citing the example of China where a similar situation happened between 1978 and 1984 when the real incomes of farmers doubled in a matter of just 6 years.