Sow wisely: India can pick much more out of its agricultural sector

Copyright © HT Digital Streams Limit all rights reserved. Opinion Nitika Nathani, Akshita Agarwal 4 min Read 22 Apr 2025, 12:30 pm is innovation to improve farming practices and productivity on the field. (Mint) Summary Our farm sector has the potential to grow much faster and also makes significant advantage with exports. Here is how it can be achieved. India has the advantage of favorable climatic conditions that enable diversity in crop production, which regularly helps to rank among the world’s top two countries for arable land. The country also has the world’s second-largest agricultural crop production. However, there are several markers that indicate a significant space for growth. For example, India’s yield for grain is 25% and 50% lower in kilograms per hectare terms than Brazil and the US respectively; India’s share of processed food exports is about 25% of its total agriculture exports; And more than 90% of Indian farmers still have to adopt modern Agri technologies such as precision farming and distance observation. Also read: Ajit Ranade: India must formulate a strategy to increase agricultural exports, while strong fundamental in agricultural production and the high potential for growth point on greater profits must be made, the sectoral challenges and geopolitical uncertainties should be taken into account for the agricultural sector in India to achieve greater value for farmers, agricultural and consumers. Five Tailwinds supports an optimistic view of agricultural growth: One, changing demand for consumers has led to a sharper focus on crops and livestock with high value, such as fruits, vegetables and dairy products. The government’s pursuit is to increase Agri-Exports by 2030 by an increasing $ 40-50 billion; And India’s biofuels policy drives the expansion in the country’s output of important feeds such as wheat. Two, digital adoption in agriculture is growing, with about 40% of farmers using digital payments in 2024, an increase of about 11% in 2022. The digital pressure of India by the government and the growing technical stack infrastructure is expected to continue to accelerate this shift. Three, the rise of agricultural financing to £ 25 trillion, an annual increase of 14% from 2021-22 to 2023-24, indicates the greater access to credit. Recently extensive loan limits, such as for the Kisan Credit Card Scheme and targeted subsidies such as those for mechanization, are expected to further increase credit access in India. Also read: Indian states must adopt AI for inclusive growth and management four, the streamlining of supply chains, especially through cooperatives and farmer producers’ organizations (FPOs), relieves the journey of crops from the farm to the market against a background of otherwise fragmented logistics. Organized trading networks and digital platforms such as the Open Network for Digital Commerce (Ondc) and the E-Mandi platform of the government improve the market connections and price discovery as well as transparency. Five has risen the adoption of sustainable practices in farming over the past two years from about 10% of the farms to 15%: the use of agri-biological has grown from about 7% to 11% and can grow further, with almost 67% of farmers expecting to increase their spending on biological agents. It will also make it easier to use world markets. Agriculture accounts for about 20% of greenhouse gas emissions (GHGs) and such eco-friendly shifts will help reduce them. Agri-businesses, blown by these positive trends, were able to explore additional possibilities, such as the following, to create additional value. An integrated input output approach for crop value chains: For example in horticulture, some companies are innovating to improve farming practices and productivity on the field, such as with high yield varieties of seeds and advisory issues on which crops to sow and when. Along with the support of the market connection, farmers can expect a better price processing. For example, export quality products can recommend a premium. Calibrated credit infusion made possible by analysis and the use of artificial intelligence: Many Agri-Fintechs are pioneering in innovative credit models using data from FPOs and Boer Cooperations, as well as alternative data. This makes a difference, as financial institutions can improve agricultural financing by using the improved credit rating and risk counting credit flow. Increase crop diversification, value added and export: For example, India prioritizes the production of crops that can take the place of large imports, such as pulses, vegetable oils and nuts, and also its export readiness in fields where trade dynamics matter, such as aquaculture and millers. The opportunity for value adding is to arise the rise of farming-to-fork-direct-to-consumer brands (D2C), as well as the expansion of dairy and poultry farming for export for value added. In addition, India is well placed to address the global demand for ‘wheat tanol’ as an alternative to traditional fuel. Also read: Himanshu: Trading offers should not damage the interests of Indian farmers’ acceptance of an ‘Omni channel’ approach to product and service delivery: As farmers across the country increasingly embrace digital instruments, sustainable input and innovative practices, agri-enterprises can be digital interfaces with the last mile-net. Centers can be-with a lotte network. It would not only create a seamless experience for farmers across various agri-business touch points, but also improve the involvement, stickiness and their openness to try new approaches and technologies. Management of network costs and the optimization of service over the top holds the key to success in this effort. By capturing such value creation opportunities, India’s agricultural sector can significantly contribute to economic growth and strengthen the country’s position worldwide. The authors are partner and senior involvement manager at McKinsey & Company respectively. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Driculture Sector #Exports Mint Specials