RESEARCH PROJECT

On

AGRICULTURAL SECTOR DURING COVID

Submitted to

MAHARASHTRA NATIONAL LAW UNIVERSITY,

AURANGABAD

Submitted by
SAKSHI SINGH
B.B.A.L.L.B (Hons.) Semester – I
Roll no. 2023/BBALLB/49
MACROECONOMICS AND INDIAN ECONOMY

Under the guidance of

Mr. Kumar Saurabh
Professor of Macroeconomic and Indian economy
Maharashtra National Law University Aurangabad
Declaration
This declaration is made at Aurangabad that this project is prepared and drafted by me Sakshi Singh.

It contains the project work that was assigned to me during my 1 st Semester period and succesfully
accomplished from my side.

This project is a sincere attempt at compilation of the aforementioned work.

This has not been submitted wither in whole or in part to any other law university or affiliated institute under
which any university is recognized by the Bar council of India, for the award of any other law degree of
diploma within the territory of India.
 Table of Contents

Sr. Title Page

No No.
1
1. Introduction
2-3
2. Agricultural Sector throughout the years
4-5
3. Trends in Agriculture
6-7
4. Impact on farmers during Covid
8-9
5. Steps taken by Government
10
6. Way Forward

7. Conclusion 11

8. Bibliography 12
 Abstract

Agriculture, with its allied sectors, is the largest source of livelihoods in India. 70 percent of its rural
households still depend primarily on agriculture for their livelihood, with 82 percent of farmers being small
and marginal. From 1951 to 2011, the contribution of agriculture to India's GDP decreased steadily as the
country's economy diversified and expanded. India's farmers struggle daily with the unbalanced monsoon,
unpredictable rainfall, catastrophic weather events, disrupted supply networks, and growing inflation. The
lockdowns caused by COVID from last year have now made these issues even worse.
Introduction

In some regions of southern India, agriculture has existed since the Indus Valley civilization's time and even
before. India has an agrarian economy, with more than 54% of its land classed as arable and 50% of the
labour force employed in the agriculture sector. One of the most significant industries in the Indian economy
is the agricultural sector. Over 151 million people receive their livelihood from the agriculture sector. The
industry employs over 60% of the Indian population and accounts for about 18% of India's GDP. Due to
growth in other sectors of the national economy, this percentage gradually declines each year .

Significance of the study

This study aims to study the agricultural sector in India throughout the Covid 19 pandemic. It studies the
plight that the farmers were going through in the Indian context during the pandemic and the lockdown.

Objectives of the study

The main objective of the study is to focus on the hardships that the farmers faced and the
implications/impact it had on their livelihood.

Research methodology

Apart from the article the research for this project was done through secondary sources such as articles,
blogs and journals.

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Agricultural Sector throughout the years

Agriculture has existed in India since the Neolithic era. India is second in the world for agricultural output.
According to the Indian Economic Survey 2020–21, agriculture in India supported 20.2% of the GDP and
employed more than 50% of the labour force. In 2016, 17.5% of the GDP (gross domestic product) was
accounted for by agriculture and related industries like animal husbandry, forestry, and fisheries. By 2020,
these industries would employ around 41.49% of the workforce. In terms of net cropped area, India leads the
world, followed by the US and China. With India's overall economic growth, agriculture's economic
contribution to GDP is continuously shrinking. Nevertheless, agriculture is India's largest economic sector
by population and contributes significantly to the country's overall socioeconomic structure.

The expanding economy of India is significantly influenced by agriculture. Agriculture and related activities
employ around 54.6% of the total labour force, and they account for 17.8% of the nation's gross value added
(GVA). The nation's overall agricultural exports in 2021–22 totalled US$ 50.2 billion, a 20% increase from
US$ 41.3 billion in 2020–21. The Indian agriculture industry is anticipated to expand by 3.5% in FY23.
Lower productivity is the outcome of conventional farming practises' relative lack of development in
efficiency and agricultural yields. In response to this worry, the government launched the fourth wave of
revolution in agriculture, introducing technology innovation to these endeavours to increase yields and
encourage public participation in this sector.

The majority of India's agriculture is reliant on the natural world, yet climate change and global warming are
making farming unpredictable. Increased production, increased investment, diversification of the sector,
application of modern techniques, development of horticulture and floriculture, growth of export volume,
and growth of the food processing industry are emerging trends in the agricultural sector that are quite
prominent in the post-liberalization era.

In addition to providing jobs, agriculture is crucial for ensuring food security. An average Indian still spends
more than half of their salary on food security, according to the NSSO (2013). However, India's agriculture
sector has seen erratic growth rates. As most of India's cultivated land is dependent on rainfall, rainfall has a
significant impact on the growth rate of agriculture in India.

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 A
s shown in the above figure the initial period after the independence the agriculture sector was facing a
negative growth rate. However, after 1958 the growth rate has been positive except in 2002 -03 when the
Indian agriculture sector was affected by severe drought. With the introduction of the green revolution, the
agriculture sector experienced an impressive growth rate from late 1960 to early 1970.

Even though the growth rate of agriculture has been fluctuating, the contribution of this sector in total Gross
Domestic Product in India has been continuously falling. Despite the fact that the majority of the workforce
is employed has been quite low. As shown in the figure above at the time of Independence agriculture
contributed almost half of the total GDP which has declined to 18% in recent years which was more than
45% in 1954-55.

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Trends in Agriculture

The Indian government's persistent and coordinated efforts to promote changes for increasing agricultural
exports have been quite successful. India has been able to step in to satisfy the increasing worldwide demand
despite the unprecedented global epidemic, becoming as a big global provider of food and other crucial
agricultural products.

Despite the logistical difficulties caused by the COVID-19 epidemic, India's exports of processed and
agricultural goods increased by more than 23% in terms of dollars in the first ten months of the current fiscal
year (April 2020–January 2021) compared to the same period in 2017.

Looking at five-yearly growth, it is observed that the export of agriculture and allied products have increased
from a total of Rs. 896708.84 crore during 2009-14 to Rs. 1193463 crores during 2014-19. The exports have
already reached Rs. 855293 crore mark during 2019-22 period (Includes April- January 2021-22 figure) with
the exports for the period April 2021 - January 2022 exceeding Rs. 3 Lakh Crore.

 Agriculture meets various development needs in addition to meeting the demand for food grains.
The farming sector has been more diverse in recent years, producing horticulture and commercial
crops such fruits, vegetables, spices, cashew, areca nut, coconut, and flour goods like flowers,
orchids, dairy, and animal husbandry and products. These goods are becoming more and more in
demand. The economy's liberalisation has opened up a lot of room for the agriculture sector to
expand in terms of both production and trade.

 India is regarded as the world's second-biggest producer of vegetables and the largest producer of
fruits.
India is able to develop a wide range of horticulture products, including fruits, vegetables, spices,
cashew, coconut, cocoa, areca nuts, root and tuber crops, medicinal and aromatic plants, etc. thanks
to the diversity of its geographical, climatic, and soil features. From 29.0 million tonnes in 1990–
1991 to 63.5 million tonnes in 2007–2008, the global production of fruits has grown. From 67.29
million tonnes in 1994–1995 to 125.9 million tonnes in 2007–2008, the global production of
vegetables has increased. The largest cashew nut grower is thought to be India. From 3.7 lakh tonnes
in 1991–1992 to 6.0 lakh tonnes in 2003–2004, the world's cashew production has increased.

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 Currently, 31,000 hectares of land in Karnataka, Tamil Nadu, Andhra Pradesh, and West Bengal are
used to grow flowers.
However, commercial floriculture production has been steadily growing since the foundation of
liberalisation. As a result, there is a constant increase in demand for Indian cut flowers on the global
market. Cut flower exports as a whole rose from Rs. 28.7 crore in 1994–1995 to Rs. 96.6 crore in
1998–1999 in value. India has tremendous potential to export floriculture goods in the near future
under the liberalised system; it is anticipated that this potential will surpass the Rs. 200 crore mark by
2010. In 2007–2008, a total of 0.87 million tonnes of loose flowers and 803.5 million tonnes of cut
flowers were produced.

 Liberalization has removed all restrictions on the movement of agricultural produce within the
country. It has helped in the expansion of trade in agricultural products, especially food grains.

 Agricultural Exports
The largest exporter of agricultural goods is India. As a result, it is one of the crucial new
developments in agricultural marketing as a result of liberalisation. As a result of the deregulation,
agricultural exports are increasing in volume under WTO control and are expected to continue
growing in the foreseeable future. India is in a favourable position when it comes to agricultural
exports because the country's agricultural industry benefits from cheap labour costs, low labour costs,
ideal climatic conditions, and low input unit costs. The expansion of the agriculture industry is
greatly influenced by agricultural exports. Additionally, it is broadening agricultural operations and
expanding employment prospects.

 Developing new biological techniques

To meet the growing demand for the food needed to feed the expanding population, the widespread
use of chemical fertilisers and pesticides was advocated during the Green Revolution. Growing
population, rising food demand, and unrestricted exploitation of natural resources have seriously
threatened the environment and the agricultural industry. There is a growing focus on using
biological technology for agricultural operations and more emphasis is being placed on developing
new organic technology in order to prevent future harm to the environment and the agricultural
industry.

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Impact on farmers during Covid

Farmers are currently stranded with a lot of produce, notably perishables like milk, fruits and vegetables,
flowers, even poultry meat and eggs, as a result of the lockdown's major disruption of supply networks.
Farmers are becoming destitute as a result of the collapse in farm prices caused by this excess.

 Peak harvest with no procurement

Since the lockdown, India has experienced its peak Rabi and Kharif seasons, during which time crops
including wheat, paddy, gramme, lentil, mustard, and others (including paddy in irrigated areas) were
at or nearly at the point of harvest. The farm harvests arrive to the mandis during this time as well,
ready for secure procurement by authorised government organisations.

 Labour unavailability due to reverse migration

Operations have been negatively impacted by the lack of labour in numerous areas. Due to the lack
of migrant workforce, crop harvesting day salaries have increased significantly. Since they frequently
do not need to rely on a lot of manual work, some agricultural sectors, including paddy and wheat,
that have the luxury of using technology for harvesting are relatively more insulated.

 Fall in prices
Due to lack of access to markets, including the suspension of transportation and the closing of
borders, agricultural prices have dropped. Farmers are facing enormous losses due to rising labour
costs and access issues, so they let crops decay in the fields as a better "stop-loss" measure.

 Scarcity of public goods

The most important difficulty is making food grains, fruits, vegetables, and other necessities
accessible to consumers in both urban and rural locations.

 Transportation of public distribution system (PDS) items to last-mile delivery agents, by both
rail and road, has been severely impacted in the beginning.

 Restrictions on Sale
There were self-imposed restrictions on the inter- and intra-state movements of
farmers/labourers, as well as harvesting and related farm machines.

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 Disruptions in supply-chain
The movement of migrant harvest labourers and agricultural machinery is constrained by the
lack of transportation infrastructure combined with vigilant roadblocking. Also, "farm
machinery" does not by definition include tractors and trucks. Farmers have been discarding
their products by the streets as a result of the overproduction that resulted .

 Poor storage facilities

The Planning Commission had long ago calculated a 35 MT gap between the supply and
demand for agri-warehousing, which is still unmet. With only 25 MT of cold storage space
now available, India can only store about 10% of its fruit and vegetable production.

 Lockdown induced debt and Cash Flow Constraints

The biggest challenge facing farmers is how to pay back their informal obligations, including
crop loans, gold loans, and other types of debt. Typically, crop loans are paid back between
April and May, and a new loan is provided at the start of a new growing season. If they don't,
they'll have to borrow money from the unofficial market at hefty interest rates for the
upcoming season.

 Impact on Food Security

People's access to sufficient/diverse and nutritious food sources is being hampered by border
closures, quarantines, market, supply chain, and trade disruptions, particularly in nations that
have been severely affected by the virus or that already experience significant levels of food
poverty. Prices dropped in 2020 as demand for food declines over the coming months, which
had a detrimental effect on farmers and the agricultural industry. As of now, there have been
little disruptions because there is enough food available and markets have remained stable,
despite being skewed, to fulfil the continuous need.

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Steps taken by government

To address the concerns of farmers, the Centre and State Governments cooperated. Both have implemented a
number of policies every day, including subsidies, free agricultural credit flow, unemployment benefits for
migrant and landless workers in rural areas under MNREGA, and more.

The government is constantly educating farmers about the importance of working in fields with their faces
covered and maintaining social distance in order to protect their health.

The government has lifted the restrictive restrictions on the movement of farm equipment in an effort to
further ensure a harvest season without obstacles.

 Reforms in e-NAM
The addition of the new functionalities to the National Agriculture Market platform was a good step
towards declogging mandis.
By removing the requirement for farmers to physically reach the wholesale mandis to sell their
gathered produce, they want to enhance agriculture marketing.

 Technological support
Recently launched to assist farmers during the shutdown is the Kisan Sabha App, developed by CSIR
to link farmers to supply chains and freight transportation control systems.
By reducing the influence of middlemen and establishing direct contact with institutional purchasers,
the app seeks to give farmers the most affordable and timely logistical help while also increasing their
profit margins.
To assist farmers and traders in finding transport vehicles for the transit of agricultural and
horticultural produce, the Kisan Rath app was also introduced.

 Boost to Contract farming

In light of the pandemic's ongoing concerns, several governments have supported creative models that
enable investors and farmers to enter into a contract for contract farming. For instance, Telangana's
Consumer-Farmer Compact has worked to guarantee food access and availability during COVID-19.
In this approach, consumers help farmers with their agricultural requirements in exchange for farmers
making sure consumers can get food easily.

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 Allocations for direct transfers

Through PM KISAN, increase the DBT allotments to farmers, taking into account everyone who
participates actively in the lockdown. Due to this, the majority of agricultural families have been able
to somewhat recover from the losses experienced in the months of March and April. It has given them
some protection from the deflationary consequences on farm prices anticipated as a result of the
protracted lockdown.

 Focussing on Alternative Market Channel

Decentralisation and direct-to-home delivery are the guiding ideas of the alternative market
channel.
Farmers' organisations and Farmer Producer Companies (FPCs) are encouraged to participate
in the creation of smaller, less crowded marketplaces in urban areas so that farmers can
interact directly with consumers.
In situations when measures to prevent crowding in the wholesale markets are expected to
persist, it might be a useful alternative to the lockdown.

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Way Forward
Making the food system more robust and sustainable is now an even higher priority in light of COVID-19.
The COVID-19 pandemic offers an opportunity to better understand the chokepoints and vulnerabilities in
the food system in order to pinpoint the investments and reforms that are required to increase the sector's
resilience to a variety of upcoming shocks and difficulties. Involving stakeholders in the process of
comprehending the entire effects of the pandemic on different population groups and the lessons to be
gained will be essential models quickly enough to prevent the worst effects. In particular, it will be crucial to
look at the food system's present resilience toolkit in order to determine which policy measures have shown
to be most successful and what new measures might be required to react to systemic shocks. Understanding
the variables that allow some food and farming firms to quickly modify their business models in order to
escape the worst effects will be especially crucial.
Lessons from the COVID-19 pandemic will need to be integrated into wider responses to challenges
confronting the global food system. Those challenges include: (i) the ongoing emergency of climate change,
and the need for the food system to be resilient to a range of extreme weather events; (ii) the need to ensure
sustainable productivity growth to feed a growing world population in a changing climate, while
simultaneously reducing the sector’s greenhouse gas emissions; (iii) maintaining biodiversity, against the
background of land use change related to agriculture, the management of new varieties and disease risks
from monocultures; and (iv) a range of animal and plant diseases, including those which affect human
health directly, via food borne disease (as with the BSE crisis), human-to-human transmission (as with
zoonotic coronaviruses), and by inducing human antimicrobial resistance (when antimicrobials are applied
inappropriately in the livestock sector), as well those which impact food security by reducing animal and
crop production (as with African Swine Fever and Fall Armyworm).

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Conclusion
Today, we have a chance to do more than just address the crisis as it arises; we also have a chance to roll
back unproductive and environmentally harmful support, freeing up money for investments in a more
resilient, productive, and sustainable food system that can handle future challenges. This can assist create a
supportive environment for the overall food system that is in line with natural resource limitations, a
changing climate, market demand, technological advancements, and "low probability, high impact"
catastrophic hazards. It can also help bring about associated regulatory reforms. The unexpected shock of
COVID-19 emphasises the need to move away from "business as usual" policies and towards a more
progressive policy package that invests in the productivity, sustainability, and resilience of the global food
system.

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Bibliography
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 https://www.tractorjunction.com/blog/emerging-trends-in-agriculture-future-of-indian-agriculture/
 https://www.oecd.org/coronavirus/policy-responses/covid-19-and-the-food-and-agriculture-sector-
issues-and-policy-responses-a23f764b/#snotes-d4e402
 https://www.fao.org/india/fao-in-india/india-at-a-glance/en/
 https://www.ibef.org/blogs/agriculture-4-0-future-of-indian-agriculture
 https://www.investindia.gov.in/sector/agriculture-allied-sector

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