Non-foodgrains driving farm growth

Share of high-value commodities on the rise in country's total agri output value.

The share of high-value agricultural commodities is rising in the country's total agricultural output value and these are emerging as the prominent growth drivers for the farm sector.

The value of non-foodgrain output in the total agriculture production has increased from 37.1 per cent in 1982-83 to 46.7 per cent in 2005-06.

Categories such as fruits and vegetables, fisheries and livestock are witnessing a significant growth compared with wheat or rice.

Between 2000-01 and 2005-06, the value of cereals output, including wheat and rice, grew by 21.63 per cent (at current prices) while fishing grew by over 61 per cent and fruits and vegetables grew by 33.74 per cent. 
 

GROWING APPETITE Output value in Rs crore at current prices
Category	2000-01	2005-06	Change(%)
Cereals	122,687	149,231	21.63
Oilseeds	25,860	47,058	81.97
Fishing	25,219	40,676	61.29
Fruits & vegetables	94,683	126,636	33.74
Milk Group	94,551	124,520	31.69
Meat Group	22,980	30,051	30.77

Oilseeds, another non-foodgrain, has jumped by almost 82 per cent between 2000-01 and 2005-06 in terms of value. Overall, the grain segment grew at about 2 per cent during the period while the non-grain category grew at more than 4 per cent.

"The non-foodgrain category will largely drive the agricultural sector in the years to come," said Ashok Gulati and Kavery Ganguly of the International Food Policy Research Institute.

The trend is in line with the changing consumption patterns in the country. "The demand for foodgrain is growing at 1-2 per cent while the demand for non-foodgrain is witnessing a growth of 5-6 per cent," Gulati added.

A recent World Bank report on agriculture pointed to the rising demand for high-value crops and animal products.

"Growers are bound to move to high-value commodities and it is a positive trend for them as it means higher incomes. But the consequent shortage in foodgrain is a matter of serious concern and policy intervention is required to ensure better productivity for rising demand.

The overall consumption basket will continue to show a decline in the foodgrain demand but the quantum of foodgrain requirement will rise due to rising population", said D K Joshi, principal economist at Crisil.

Even the agriculture export basket is witnessing a shift to high-value produce. The value of floriculture exports, for instance, grew from Rs 221 crore in 2004-05 to Rs 650 crore in 2006-07, clocking a growth of 194 per cent.

Fruits and vegetables exports grew from Rs 1,363 crore to Rs 2,411 crore (an increase of almost 77 per cent) and animal product exports increased from Rs 2,592 crore to Rs 4,063 crore (almost 57 per cent). By contrast, cereals export dipped by 15.33 per cent from Rs 9,173 crore to Rs 7,766 crore in the same period.

The increasing share of high-value food commodities in the agricultural sector output is a clear indication of the out-of-staple diversification of Indian agriculture.

The fast growth in the high-value segment has provided a cushion to agricultural growth, which otherwise would have decelerated at a faster rate.

It is often argued that because of their commercial orientation high-value crops may endanger household food security, says the 2006-07 annual report of the Indian Council for Agricultural Research.