What rising foodgrain output means for India 

What is the news? 

Farm sector saw a growth of 4.5% in the first quarter of FY22 and a record food grain production of 150.5 million tones (mt) during the kharif season.

It was due to the hard work of farmers and near normal monsoons.  

How important is food grain production? 

First, agriculture and its allied activities in FY21 contributed 20.2% to the Gross Value Addition (GVA) of India.  

Second, food grain production is the primary livelihood source for nearly 55% of the population.  

Third, it also contributes to the supply base of agri-based industries such as cotton, sugar, vegetable oil, tea etc.  

Fourth, it provides market support to agri-dependent industries like fertilizers, tractors etc. India is amongst the 15 leading exporters of agricultural products worldwide.  

Fifth, the agricultural sector helps provide employment, leads to mitigation of poverty and reducing inequalities by providing income generation and means of livelihood. 

What are the key reasons for the rise in production? 

A close to normal monsoon, irrigation, aggressive implementation of MGNREGA, crop insurance availability, uninterrupted supply of fertilizers and efficient sowing activities are some of the key reasons.  

What do the latest estimates represent? 

A reviving rural economy will help protect the Indian economy and drive the country back onto the economic recovery track.

Improving rural prospects will stimulate consumer demand for FMCG products, light motor vehicles, telecom products etc.

Increased income in the hands of the rural population will lead to higher consumption resulting in increased production levels and higher capacity utilization. 

In terms of inflation, rising food grain production will help bring down consumer price inflation.

Can rural economy consolidation happen? 

Consolidation of rural economy can be achieved through structural reforms, especially with the implementation of farm reform laws.

The strengthening of rural supply chains such as cold chains and refrigerated transportation, building of warehousing facilities, promoting of agro-based industries such as food processing industries, etc. will help build momentum.

It will lead to increased investments and production. 

Source: This post is based on the article ” What rising foodgrain output means for India” published in The Livemint on 27th Sep 2021.