Agriculture, the fastest-growing sector in the country, is being hit by a severe drought that is forcing farmers to turn to cash crop subsidies and loans.
In the last five years, the number of farmers participating in the agri-tourism industry in India has been growing at a healthy pace, according to a recent report by the World Bank.
In 2013, nearly 90 percent of the sector’s annual revenues came from the agro-tours industry, the report found.
The number of small-scale farmers in India is also on the rise, increasing from about 15 million in 2012 to 23 million in 2016.
According to the World Economic Forum’s agri and agro business publication Global Agri and Agro Business Outlook, India’s agro sector accounts for more than 60 percent of all agro exports, which account for more to 80 percent of global agro production.
However, this sector is struggling with low prices and lack of availability of inputs, according a recent survey by the Economic Times.
The report states that nearly 70 percent of Indian small- and medium-sized businesses are in debt.
According to a survey conducted by the Ministry of Agriculture and Food, just over half of farmers surveyed said they have not received any cash assistance from the government in the last one year, according an Agri Business Development Authority report.
The government is yet to set up an agriculture department to run the agribusiness sector.
The Reserve Bank of India has also taken steps to tackle the drought.
On October 5, the Reserve Bank started printing Rs 1,000 notes in denominations of 50, Rs 1 and Rs 2, which are meant to support the small-to-medium enterprises, farmers and small traders.
This is a major step in the right direction, said S. Venkatachalam, co-founder of India’s largest agricultural technology company, Bharat Agro, which produces agri technology products.
He said that this move has been well received by farmers and traders, who have been waiting for the bank to start printing these notes.
The Reserve Bank has also launched an advisory board, chaired by former finance minister and former agriculture minister Arun Jaitley, to help banks improve the business environment for small and medium businesses in the agriculture sector.
A cashless economy is also becoming a reality for some of India ‘s largest companies, including Flipkart, Snapdeal, Paytm, Uber, Tata Motors, Birla Group, Tata Sons and Hindustan Unilever.
However the move is not as easy as it sounds.
A cashless society is only feasible if the country adopts a cashless currency, said K.G. Venugopal, a professor at the University of Mumbai.
In fact, the country needs to do a lot more to make it happen, he added.
According the World Food Programme (WFP), the average cost of a basic food in India in 2020 was Rs 1.36 per kg, a figure that is rising to Rs 2.37 in 2021.
A family of four needs to spend around Rs 5,400 per year on food in order to meet the basic needs of their families.
The cashless India is only a first step, said Gopal Vohra, a senior fellow at the Centre for Policy Research.
In the coming months, there are several other steps that need to be taken to make the transition to cashless agriculture a reality, said Vohrum.
For instance, the Government of India should also launch a pilot project to test a cash-based economy in the state of Kerala, said Venugod, who is also the vice-chair of the WFP’s Rural Transformation Task Force.