How Can India’s Agriculture Assist in Economic Recovery Post-COVID-19?

Agriculture

Agriculture

The agriculture sector is one of the crucial contributors to the country’s GDP

The outbreak of COVID-19 has a deep influence on every aspect of life. It has not only impacted businesses and economic activities across India and the world, but also significantly affected the lives of workers who work on daily wages. Now, as the pandemic has hit the country’s workers lives, they are migrating back to their villages. This reverse migration of labourers is expecting to have a considerable impact on agriculture, augmenting a surfeit supply of workers and creating new opportunities.

As the world’s largest milk, pulses, and jute producer, and the second-largest rice, wheat, sugarcane, vegetables and fruit producer, India’s agriculture has been the most resilient industry during the COVID-19 period. According to the Founder and CEO of MART, Pradeep Kashyap, the agriculture sector is the only bright spot at this moment which witnessed an impressive growth of 5.9 percent in Q4 of FY20 on the back of better Rabi harvest despite nation-wide lockdown caused by the COVID-19 crisis.

On the contrary, the Indian economy grew only by 3.1 percent during the same period due to the contraction of core sectors. Also, the recent Crisil forecast illustrates that agriculture will still depict positive growth of 2.5 percent, when GDP may register negative growth.

Government Steps toward Agriculture amid the Pandemic

The sudden outbreak of the COVID-19 pandemic has forced the government to impose the nationwide lockdown to contain the spread of the virus. However, this resulted in large-scale migration of labourers, food and livelihood insecurity of daily wages people and recovery of the economy. In order to cope with these challenges, the country’s Finance Minister declared an INR 1.7 trillion package, especially to safeguard the vulnerable sections, including agriculture, from any adverse impacts of the pandemic. 

The announcement contained an advance release of INR 2000 to bank accounts of farmers as income support under PM-KISAN scheme. The Government also raised the wage rate for workers engaged under the NREGS, the world’s largest wage guarantee scheme. To take care of the vulnerable population, Prime Minister’s scheme for welfare of the poor PMGKY has been announced. Apart from this, grain allotments to registered beneficiaries, and Cash and food assistance to persons engaged in the informal sector, mostly migrant laborers, were also announced for the next three months.

Five-Point Plans for India’s Economic Recovery

As the pandemic suddenly hit the world and forced the government to shut down economic activities, both demand and supply of products and services have fallen. Series co-editor and Senior Research Fellow at Agriculture for Nutrition and Health (A4NH), Devesh Roy highlights a five-point plan for India’s economic recovery post-COVID-19. Those include sectoral prioritization of agriculture in recovery plan, expansion of agricultural exports, incentivizing migrants to return to urban centres (as agriculture and rural areas have no absorption capacity), addressing micro and small enterprises (critical part of agri-food system) and increased corporate sector participation in agriculture.