Agriculture: A Key to Economic Development

Introduction:

Agriculture plays a significant role for the development of the economy of a country . It makes a noteworthy contribution for the economic prosperity of advanced countries. Also, its role in the development of less developed countries is of vital importance. Around 60% of the population in India is dependent on agriculture as of June 2022, making it the largest source of livelihood for the entire nation. The dependency on agriculture has been constant for a long time.

The share of agriculture is often taken as an indicator of economic development. Dependency of a large population on agriculture for its livelihood leads to low average income. The relative importance of agriculture declines when a country develops economically. The share of agriculture and allied sector in total GVA accounts for 18.8% in 2021-22. To end extreme insufficiency and boost the welfare of the country, agricultural development is considered as one of the most pivotal tools.

 

Role of Agriculture:

“Investments in agriculture are the best weapons against hunger and poverty, and they have made life better for billions of people” – Bill & Melinda Gates Foundation

The role of agriculture in the Indian economy is explained as follows:

1. Contribution to the Government’s Revenue

For state and central governments, agriculture is taken into consideration as the most consequential source of income. Raising the land revenue empowers the government to gain a substantial amount of revenue.

2. Largest Employee Sector

Agriculture sector provides direct employment opportunities for those employed in the crop raising, agriculture expansion field. The Indian workforce is primarily employed in the agriculture sector. Compared to developed nations such as Australia, the UK, and France, India's agriculture industry has a relatively high percentage of its total population engaged in the production of crops or other materials used by humans.

3. Encouraging economic development

Agriculture has a transformative impact on global trade. Agriculture provides jobs and boosts the economy, allowing many people to earn a living from other sectors of the economy. Agriculture also impacts health and nutrition, since food is an essential component in healthy diets.

4. Contribution to National Income

Agriculture is the main source of national income. According to the National Income Committee and C.S.O., in 1960-61, 5% of national income was contributed by agriculture and allied occupations. In 1976-77, this sector alone contributed 42.2% while in 1981-82, its contribution was to the tune of 41.8 per cent. In 2001-02, it contributed around 32.4% of national income. This was further reduced to 28 per cent in 1999-2000. Contrary to this, the proportion of agriculture in the U.K. is only 3.1% and in the USA it is 3 %.

5. Source of savings

Large amounts of money are spent on farming, which comes in the form of fertilizers, pesticides, seeds and many other things. Improvement of agriculture can go a long way in increasing savings. It is seen that rich farmers have started saving especially after the green revolution in the country. This surplus amount can be invested in the agriculture sector for further; development of the sector.

 

Importance of Agriculture in everyday life:

Agriculture provides most of the world’s food, clothing and other materials that we use every day. It is one of the oldest occupations on earth, dating back tens of thousands of years. Agriculture has been called the “mother of all industries” because it enables people to grow enough food to feed themselves and also creates many necessary items like textiles, paper products, chemicals used in cleaning products, biodiesel fuel (ethanol), skin creams, shampoos, caffeine, etc.

While agriculture has been a big part of our lives for thousands of years, only recently have technology advancements allowed us to enjoy the benefits of the industry in an even more efficient way. With increased productivity and efficiency, agriculture is helping to make everyday activities more convenient and enjoyable.

 

Social and Political Importance:

It is well-known that most of the population in India lives in villages. If agriculture in the country improves, the lives of millions of people will be changed for the better. If this happens, then at least 80% of India’s population will be able to participate in education, health care and other programs that aim to protect their rights and improve their quality of life. Awareness will promote sociability and will also help them understand the purposes behind programs that are carried out by the government. This knowledge will make it possible for them to form a good government with proper policies. A good society plays an important role in improving economic situations within a nation.

 

Investments:

Some investments and developments in agriculture:

● In FY 2021-22, agriculture and allied products exports stood at US$ 50.21 billion.

● Gross value added by the agriculture and allied sector was 18.8% in FY 2021-22

● Agriculture and allied activities recorded a growth rate of 3.9% in FY 2021-22

●In 2022, the Government is planning to launch Kisan Drones for crop assessment, digitization of land records, spraying of insecticides and nutrients.

●Nestle India will invest US$ 100.16 million in the construction of its ninth factory in Gujarat.

●The processed food market in India is expected to grow to US$470 billion by 2025, fromUS$263 billion in FY20 on the back of government initiatives such as planned infrastructure worth US$1 trillion and Pradhan Mantri Kisan Sampada Yojana. The food processing industry employs about 1.77 million people. The sector allows 100% FDI under the automatic route.

 

Conclusion:

Agriculture, the Indian economy’s most important sector, provides employment for over 60% of the total workforce. The demand for agri-inputs, pesticides and other farm inputs has increased immensely over the past few decades. The increasing demand has led to the growth of production and exports of major agricultural products in India. Farmers have an important role to play in delivering a stable food based economy and in contributing to India’s national goals of sustainable development as laid down in National Agenda for Sustainable Development 2015-2030. According to Muir, “Agricultural progress is essential to provide food for growing non-agricultural labor force, raw materials for industrial production and saving and tax revenue to support development of the rest of the economy, to earn foreign exchange and to provide a growing market for domestic manufactures.”

Written By: Nidhi Kaknani