Agriculture in India is projected to register a CAGR of 4.9% during the forecast period (2021-2026).
During the outbreak of COVID-19, the Indian agriculture sector faced major challenges, like the harvesting process, which usually starts in mid-April, was thrown completely off-balance, resulting in major liquidity issues, labor scarcity has also affected the supporting infrastructure around India’s agriculture sector, movement across state borders has been heavily restricted, which has blocked the movement of crops and consequently affected the sales, lockdowns in major economies across the country have caused delays and backlogs in supply chains, exports faced transport and logistics problems, more stringent customs restrictions, etc.
Indian Agricultural industry, with its allied sectors, is unquestionably the largest livelihood provider in India, more so in the vast rural areas. It also contributes a significant figure to the Gross Domestic Product (GDP). The high proportion of agricultural land, diverse-agro climatic conditions for cultivating different crops are some of the factors favoring agriculture in the country.Schemes such as Paramparagat Krishi Vikas Yojana (PKVY) is helping in developing organic farming by promoting farmers to prodouce commodities free of pesticide and residue.
Key Market Trends
Favorable Governmental Poilicies Supporting the Market Growth
The Government of India has been instrumental in the growth and development of agriculture in the country. The government through the Ministry of Agriculture is making all efforts to encourage agriculture growth by launching various policies. For instance, In 2018, the government allocated USD 505.1 million for the scheme Paramparagat Krishi Vikas Yojana (PKVY) to promote and support the farmers to produce vegetables organically. The produce will be pesticide and residue-free which in turn will contribute to improving the health of consumers. Thus, sustainable forms of agriculture will aid in the development of agriculture in the country. The agriculture sector in the country is expected to generate better momentum in the next few years, due to increased investments in the agricultural sector, thereby, bolstering the agriculture sector in the country.
Rise in the Food Processing Sector
Growth in household income coupled with increased processed food consumption resulted in expansion of food processing sector. Increase in exports, rise in private participation in agriculture and use of information technology are some of the key trends in the agriculture industry in India. In 2017, according to United States Department of Agriculture(USDA), Food processing sectors have contributed 15.8% of Indian agricultural Gross Domestic Product which is 7.8% higher than the previous year 2016.
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