Imperatives to Enhance Agricultural Performance in India

Syllabus: GS3/ Agriculture

In Context

• India’s agricultural sector, despite its vast acreage, faces challenges in productivity and competitiveness. While foodgrain production reached a record high in 2023, the sector’s contribution to GDP has declined due to lagging growth compared to other sectors. 

Decline in Agriculture’s GDP Share

• There is a significant decrease in the share of agriculture in India’s GDP from 35% in 1990-91 to 15% in 2022-23. This shift underscores the rapid growth of the industrial and service sectors.
• Despite challenges, India’s foodgrain production reached a record high of 3.2 billion tonnes in 2023, reflecting an increase of 140.71 million tonnes from the previous fiscal year.
• With a population exceeding 1.40 billion, ensuring food security is a pressing concern, necessitating continuous innovation in the agricultural sector.

Key Challenges

• Limited Availability of Advanced Crop Nutrition: India lacks access to tailored crop nutrition due to regulatory constraints and hurdles in the licensing process. This hinders the adoption of innovative fertilizers that could boost productivity.
• Subsidized vs. Specialty Fertilizers: Bulk fertilizers, which are heavily subsidized, often do not meet the targeted nutritional needs of crops, whereas specialty fertilizers face regulatory barriers that limit their market introduction.
• Innovation and Efficiency: The gap in adopting innovative agricultural practices and fertilizers limits the potential for higher yields and competitiveness in global trade.
• Subpar Yields: The lack of advanced fertilizers and regulatory constraints contribute to lower crop yields, affecting farmer incomes and export potential.
• Stringent Regulatory Process:  The Fertilizer Control Order (FCO) in India makes the fertilizer registration process lengthy and cumbersome, discouraging innovation and the introduction of new products.

Government Reforms and Initiatives

• National Trade Facilitation Action Plan (NTFAP) 2017-2020: While primarily focused on cross-border trade, this initiative indirectly contributes to agricultural efficiency by improving import/export processes for agricultural inputs and products.
• 2014 Guidelines for Water-Soluble Fertilizers: This reform demonstrates the government’s willingness to streamline regulations and promote innovation in the fertilizer sector. It reduced approval times for new water-soluble fertilizers to less than 60 days, leading to increased fertigation and better crop quality.
• Digital Registration Processes: Efforts to digitize applications for fertilizer registration to streamline processes and ensure quicker approvals, facilitating the introduction of innovative products.

Way Ahead

• Micro-nutrient Coated Fertilizers: Incorporating micronutrients into bulk fertilizers can enhance efficiency and reduce subsidy reliance.
• Streamlined Regulatory Framework: Establishing general specifications for fertilizers with minimum nutrient and maximum contaminant levels can expedite the approval process for innovative products.
• Digitalization of Registration Process: Online applications and faster approvals can streamline the introduction of new fertilizers.
• Learning from Success Stories: Emulating the 2014 guidelines for water-soluble fertilizers, which reduced approval times and boosted fertigation acreage, can be a model for further reforms.
• Investment in Research and Development: Allocate resources to develop new fertilizer formulations tailored to Indian soil and crop needs.

Conclusion

• Reforming the fertilizer registration process and promoting innovative solutions are crucial for enhancing agricultural productivity, empowering farmers, and ensuring sustainable growth in the sector. 
• By streamlining regulations, incentivizing research, and embracing digital solutions, India can unlock its agricultural potential and achieve greater competitiveness in global markets.

Source: BL