How to Make Agriculture Profitable in 2023

Introduction

The Indian government is conscious of the need to improve the sustainability and economic viability of agriculture. In order to address the issues that farmers confront, including low profitability, high costs of inputs, fluctuations in the market, climate change, indebtedness, and a lack of institutional support, the government has been implementing a variety of actions. Given that it employs a significant portion of the labor force and maintains food security for the majority of the population, India’s agricultural sector is extremely important to both the country’s economy and society as a whole. The policymakers in India have made it a priority to improve the state of the country’s agriculture.

Why is it Important to make Agriculture Economically Profitable?

• To guarantee the availability of food: India has a sizable population and a rising food demand. It is crucial to make agriculture profitable so that farmers can produce enough food to meet demand in order to guarantee that everyone has access to enough food.
• To encourage rural development: The rural economy is mostly reliant on agriculture. It is feasible to encourage rural development and better the lives of people who reside there by making agriculture commercially viable.
• To Support the Livelihoods of a Majority of Indians: The living conditions and general well-being of the millions of Indians who depend on farming for a living can be improved by making agriculture economically viable. More than 50% of the Indian population directly depends on agriculture as their primary source of income and employment.
• To Promote Economic Growth and Stability: The contribution of agriculture to India’s GDP is approximately 17–18%. By boosting agricultural production, lowering wastage, diversifying crops, enhancing value addition, and ensuring food security, making agriculture commercially viable may support India’s overall economic growth and stability.
• To Adopt Natural and Sustainable Farming Methods: Agriculture contributes to soil erosion, greenhouse gas emissions, water scarcity, and environmental deterioration. The use of toxic pesticides, irrigation, and subsidies are common in modern farming methods. Making agriculture commercially viable can promote natural and sustainable farming methods that lessen their impact on the environment and improve adaptation to climate change.

What difficulties faced to make Agriculture Profitable?

• Technological Adoption: Agricultural technologies, such as precision farming, mechanization, and advanced irrigation systems, can enhance productivity and profitability. However, the adoption of these technologies often requires upfront investment, technical expertise, and access to financing, which may be challenging for small-scale farmers.
• Input Costs: Input costs might be high for things like seeds, fertilizer, insecticides, and equipment. Profitability may be impacted by fluctuating input prices, particularly during periods of strong demand or scarcity. The price of labor, electricity, and water can also have an impact on the total cost of production.
• Weather and Climate Risks: The weather greatly affects agriculture, and extreme weather occurrences like droughts, floods, storms, or pests and diseases can harm crops and lower harvests. These risks are made worse by climate change, which makes farmers more vulnerable and uncertain.
• Land and Water Availability: Agriculture’s potential to expand and produce more food may be constrained by the scarcity of arable land and access to water resources. Urbanization, environmental concerns, and competition for land from other industries can make it difficult for farmers to find sufficient land and water for profitable agriculture.
• Lack of Digital Literacy: The availability of smartphones and dependable internet connectivity for many farmers in rural locations may limit their access to digitalized agri-services. To assist farmers to learn how to use these new technologies efficiently, education and training are required.
• Small land holdings: Small land holdings are common among Indian farmers, which might hinder their capacity to take advantage of economies of scale and lower their profitability.
• Market instability: Agricultural markets are subject to price fluctuations due to factors such as weather conditions, supply and demand dynamics, government policies, and global trade patterns. These fluctuations can significantly impact the profitability of farmers and make it challenging to predict and plan for future returns.
• Lack of infrastructure: The inability of farmers to increase their production and profitability in many rural parts of India is hampered by the absence of essential infrastructure like roads, electricity, and irrigation systems.
• Access to Credit and Finance: Accessing inexpensive finance and financing choices to invest in their businesses, buy inputs, or modernize their infrastructure is frequently difficult for farmers. Their capacity to embrace modern farming techniques and increase profitability may be hampered by a lack of access to financial services.
• Environment for Policy and Regulation: Agriculture-related laws and regulations may have an impact on profitability. These include laws governing commerce, subsidies, taxes, land tenure, and the environment. Farmers’ capacity to compete in the market and achieve profitability can be hampered by inconsistent policies or insufficient support.

What Steps are taken by Government?

• Pradhan Mantri Fasal Bima Yojana (PMFBY): The government created this crop insurance program to give farmers financial assistance in the event that their crops are destroyed or damaged by various natural disasters.
• Pradhan Mantri Krishi Sinchai Yojana (PMKSY): It aims to increase irrigation investments, increase cultivable land, increase water use efficiency, adopt precision irrigation and other water-saving technologies, and promote sustainable water conservation practices in order to increase farm productivity and water resource utilization in agriculture.
• The Soil Health Card Programme: In order to give farmers comprehensive information about the nutrient content and fertility state of their soil, it intends to evaluate and enhance the health of soils in agricultural areas across the nation. Making educated judgments enables farmers to increase output and cut costs.
•  Rashtriya Krishi Vikas Yojana: The Rashtriya Vikas Yojana (RKVY), which was established in 2007, is an umbrella program that ensures the overall development of agriculture and related services. This program encourages States to boost government spending on agriculture and related services.
• Micro Irrigation Fund (MIF): In order to support the State Government’s attempts to raise additional funds for increasing the scope of micro irrigation and encouraging its use beyond the parameters of the Pradhan Mantri Krishi Sinchayee Yojana-Per Drop More Crop, MIF was operationalized in NABARD in 2019–20.

Also Read: Use Of Technology In Agriculture in 2023

What Policy Options are Available to Make Agriculture Economically Profitable?

• Best Farm Practice Adoption: Agribusiness can become economically successful by implementing best farming practices, such as cooperative principles. For instance, Israel has developed into a significant exporter of agricultural products and a world leader in agricultural technologies despite its poor climate and scarce resources. Farmers can boost their efficiency and productivity by adhering to social equality, cooperation, and mutual aid when producing agricultural products in the most productive way. Long-term, this may result in greater sustainability and profitability.
• Climate-smart farming: By switching to environmentally benign agri-inputs like Nano Urea, climate-wise agriculture may make agriculture commercially viable. This can lessen the indiscriminate use of fertilizers, which can result in a hazardous food chain, catastrophic ecological harm, and soil sterility. Farmers can enhance crop yields while lowering input costs by employing economical and sustainable agricultural techniques. In the long run, this can assist farmers in becoming more profitable and sustainable.
• Natural/Integrated Agriculture: Small-scale farmers who practice integrated farming can make money. Farmers can become financially independent and self-sufficient by keeping a few livestock, maintaining fishponds, and using vermiculture for natural manure. Family labor is crucial for this kind of farming, which is environmentally sustainable and economically viable.
• Digitalization of Agriculture: Agri start-ups built on cutting-edge technology provide farmers with full-stack solutions from seed to market. They give farmers top priority by giving them direct access to supplies, loans, insurance, and the highest prices for their produce.
• Utilizing Collectives: The convergence of SHGs, Farmer’s Producer Organisations (FPOs), and Co-operatives will increase farmers’ bargaining power in terms of bulk input purchases at reduced prices, economies of scale in transportation and warehousing, access to low-cost institutional financing, and farm mechanization (drones for crop monitoring and spraying of fertilizers and plant protection chemicals, for example).

Conclusion

Making agriculture profitable in India is a crucial step toward ensuring food security, sustainable development, and economic prosperity. The agricultural sector in India has immense potential, given its vast arable land, diverse agro-climatic conditions, and large rural workforce. However, several challenges need to be addressed to achieve profitability and sustainability in agriculture. India can realize the full potential of its agricultural sector, enhance farmers’ livelihoods, and achieve sustainable agricultural growth by tackling these issues and putting comprehensive measures into place. Making agriculture lucrative will boost India’s status as a significant global player in agriculture as well as food security and rural development.

Frequently Asked Questions(FAQs)

Sources:

• Budget 2023 builds on digitalisation of agriculture for farmers’ prosperity (indiatimes.com)
• How to Make Agriculture Profitable in 2023 | by Andrew | Medium
• Making Agriculture Profitable (pib.gov.in)