1. Contribution to National Income

Agriculture contributes even now a major share of the national income in India. The distribution of national income by industrial origin for the period 1950-51 to 1979-80 shows that the share of various agricultural commodities, animal husbandry and ancillary activities has always been more than 40 percent. As a matter of fact, during the fifties, it contributed around half of the national output. During eighties and nineties, a further fall in this proportion took place. During 2002-03, it stood at about 25 percent while as of 2019 it stood at 14.1% of GDP.

2. Major source of Livelihood

The main source of livelihood is agriculture. Six out of every ten persons in India depend upon agriculture directly or indirectly. In industrially advanced countries like U.K., U.S.A., etc, the number of people dependent on agriculture is very low as compared to India. Over the years 1921-2001, the size of labour force dependent on agriculture had more than doubled. The sector is plagued by evils such as underemployment, disguised unemployment and low productivity employment.

3. Provider of Employment

Agriculture provides employment and work to an overwhelming majority of the Indian masses. In villages, about seventy per cent of the people earn their livelihood from cultivation and allied agro-industries. In absolute terms, agriculture provided employment to 97 million persons in 1995; the number of people working on land (cultivators and agricultural labourers) increased to 235 million. The economic survey 2018 points to the fact that even today agriculture employs nearly 48% of Indian population.

Women play a significant and crucial role in agricultural development and allied fields including in the main crop production, livestock production, horticulture, post-harvest operations, agro/social forestry, fisheries, etc. is a fact long taken for granted (NCW, 2001). For sustainable development of the agriculture and rural economy, the contribution of women to agriculture and food production cannot be ignored. As per Census 2011, out of total female main workers, 55 per cent were agricultural labourers and 24 per cent were cultivators. However, only 12.8 per cent of the operational holdings were owned by women, which reflect the gender disparity in ownership of landholdings in agriculture. Moreover, there is concentration of operational holdings (25.7 per cent) by women in the marginal and small holdings categories.

With growing rural to urban migration by men, there is ‘feminisation’ of agriculture sector, with increasing number of women in multiple roles as cultivators, entrepreneurs, and labourers. Globally, there is empirical evidence that women have a decisive role in ensuring food security and preserving local agro-biodiversity. Rural women are responsible for the integrated management and use of diverse natural resources to meet the daily household needs (FAO, 2011). This requires that women farmers should have enhanced access to resources like land, water, credit, technology and training which warrants critical analysis in the context of India. In addition, the entitlements of women farmers will be the key to improve agriculture productivity. The differential access of women to resources like land, credit, water, seeds and markets needs to be addressed. Towards this, Government has been implementing various schemes which help improve the entitlements of women farmers, which will prove to be advantageous in bridging the policy gaps which exist in the sector. The following measures have been taken to ensure mainstreaming of women in agriculture sector:

• Earmarking at least 30 per cent of the budget allocation for women beneficiaries in all ongoing schemes/programmes and development activities.
• Initiating women centric activities to ensure benefits of various beneficiary-oriented programs/schemes reach them.
• Focusing on women self-help group (SHG) to connect them to micro-credit through capacity building activities and to provide information and ensuring their representation in different decision-making bodies.
• Recognising the critical role of women in agriculture, the Ministry of Agriculture and Farmers Welfare has declared 15th October of every year as Women Farmer’s Day.

With women predominant at all levels- production, pre-harvest, post-harvest processing, packaging, marketing- of the agricultural value chain, to increase productivity in agriculture, it is imperative to adopt gender specific interventions. An ‘inclusive transformative agricultural policy’ should aim at gender-specific interventions to raise productivity of small farm holdings, integrate women as active agents in rural transformation, and engage men and women in extension services with gender expertise.

4. Industrial development

Agriculture provides raw materials to the industries. Cotton and Jute textile industries, sugar, vanaspathi and plantations – all these depend on agriculture. Many of our small scale and cottage industries like handloom weavings, rice husking, coir, khadi etc., depend upon agriculture for their raw materials. There are many other industries, which depend on agriculture in an indirect manner.

5. International Trade

Indian agriculture plays an important role in the country’s international trade. The main exported agricultural commodities are tea, oil cakes, fruits and vegetables, spices, tobacco, cotton, coffee, sugar, raw wool and vegetable oils. Agriculture contributes to a sizeable part of exports and it is an important segment of imports of the economy. The agricultural sector is a net earner of foreign exchange.

India’s Agriculture Trade

India has emerged as a significant agri-exporter in a few crops, namely cotton, rice, meat, oil meals, spice, guar-gum meal and sugar. As per the WTO’s Trade Statistics, the share of India’s agricultural exports and imports in the world trade in 2014 were 2.46 per cent and 1.46 per cent respectively. Agricultural exports as a percentage of agricultural GDP increased from 7.95 per cent in 2009-10 to 12.08 per cent in 2014-15. During the same period, agricultural imports as a percentage of agricultural GDP also increased from 4.90 per cent to 5.82 per cent.

According to export figures, agriculture is deeply related to industrial growth and the national income- 1% increase in agriculture growth leads to 0.5% increase in industrial output and 0.7 % increase in the national income of India.

6. Capital Formation and Investment

The major part of production assets of the country is in the form of agricultural assets like land, irrigation facilities, tractors, agriculture implements, ploughs, pump sets and storages. Since agriculture contributes about 16.4 percent of the national income, this sector is one of the primary source of savings and hence capital formation for the economy.

The Gross Capital Formation (GCF) in Agriculture and Allied Sectors relative to GVA in this sector has been showing a fluctuating trend from 18.2per cent in 2011-12 to 16.4 per cent in 2015-16. The Gross Capital Formation in agriculture and allied sectors as a proportion to the total GCF showed a decline from 8.3 per cent in 2014-2015 to 7.8 per cent in 2015-16. This decline can be attributed to reduction in private investment.

The agricultural growth in India has been fluctuating since more than 50 per cent of agriculture in India is rainfall dependent as noted in the overview. However, the sector has been witnessing a gradual structural change in recent years. The share of livestock in GVA in agriculture has been rising gradually, the share of the crop sector in GVA has been on the decline from 65 per cent in 2011-12 to 60 per cent in 2015-16.

The structural changes that are being witnessed by the agriculture sector in India necessitates re-orientation in policies towards this sector in terms of strengthening the agricultural value chain by focusing on allied activities like dairying and livestock development along with gender-specific interventions.

7. Food and Fodder

In India, agriculture meets almost the entire food requirements of the people. Agriculture also provides fodder to sustain livestock whose number runs to several crores.

8. Economic Planning

Agriculture is the backbone of the Indian economy and prosperity of agriculture can also largely stand for the prosperity of the Indian economy. Importance of agriculture in the national economy is indicated by many facts. For example, agriculture is the main support for India’s transport system, since railways and roadways secure bulk of their business from the movement of goods. Internal trade is mostly in agricultural products. Agricultural growth has direct impact on poverty eradication.

9. International Ranking

At the global level, Indian agriculture has ranked in certain commodities. In the case of groundnuts, India stands first in the world, for rice production it ranks second and in the case of tobacco it occupies third rank in the world.