MPSIDC [Madhya Pradesh State Industrial Development Corporation Limited]

Economic Development Policy

AGRICULTURE & ALLIED SERVICES

PREAMBLE

The agriculture sector forms the backbone of the Madhya Pradesh economy. It contributes almost one-third of the GSDP and provides employment to three-fourths of the labour force. With the majority of the population deriving its livelihood from agriculture, its health has a direct impact on the prosperity of Madhya Pradesh. Any developmental initiative is therefore incomplete without due consideration to this sector.

Agricultural development is a desirable not only for its direct impact on the lives of 70-80% of the population reliant on it, but also for its favourable impact on the other sectors of industry and services. Agriculture and the employment opportunities that it generates are critical to the size of the market for the industry and services sectors. Development of the rural non farm sector (RNFS), which is equally important for its impact on the development process through employment creation, higher incomes and poverty alleviation is also reliant on a dynamic agricultural sector for its growth.

The development objectives of employment generation, higher incomes, balanced regional development, poverty alleviation and quality of life can all be addressed through a focus on Agriculture & Allied sectors.

»	It is the main source of employment for the majority of the working population. In addition the allied sectors of Horticulture, Dairy and Inland fisheries provide ample employment opportunities, as they tend to be labour intensive in nature. Finally, through its impact on the RNFS it can further catalyse employment growth.
»	Growth in the sector will directly impact income levels, even more so through its stimulus on the non-farm sectors.
»	Rapid agricultural growth is central to sustained poverty alleviation as it is a source of employment to 70-80% of the population and provides about 60-75% of the rural incomes.
»	Backward areas can be better targeted through development of agricultural activity in those regions.

CURRENT SCENARIO

From lack-lustre growth rates of 1.5-2% in the eighties, the agriculture sector in Madhya Pradesh made rapid strides in the following decade, growing at rates of 4-5%, much faster than the all India average of 3.1%. The growth momentum that has evolved in the nineties shall be nurtured and sustained.

Agriculture Growth Performance of Various States 1981-96
		Agricultural GDP Growth %		Rural Wages Growth %
		1981-91	1992-96	1980-89	1990-94
North	Punjab	4.7	3.1	3.6	2.3
	Haryana	4.2	3.2	3.2	1.4
	UP	2.7	2.4	6.6	-1.3
East	WB	6.1	5.8	5.3	0.8
Centre	MP	1.8	4.5	6.2	15.8
Centre	Rajasthan	3.5	3.7	5.1	-8.1
West	Gujarat	-0.7	2.9	3	-1.2
West	Maharashtra	3.5	4.4	8.6	1.7
South	AP	1.7	3	6.4	-4
	Karnataka	2.5	4.7	5.3	-6.7
	Kerala	2.1	5.3	3.5	3.3
	TN	3.3	4.1	8.3	8.3
ALL INDIA		2.9	3.1	4.8	1.1
Source: Government spending, growth and poverty: An analysis of inter linkages in rural India, IFPRI, 1998

High growth in agriculture in the long run can come through increase in the area under cultivation and through more intensive and efficient cultivation of existing sown area. Given the high pressures on land, owing to growing urbanisation and industrialisation, the former is likely to be a major constraint. Reclamation of wastelands is the only apparent solution, however, as the demand for land for non-agricultural uses is likely to continue, net increases in area will perhaps be negligible.

In this scenario, improvement in yields is expected to be the primary contributor to agricultural growth. This would involve greater investment of resources in rain-fed areas, more efficient utilisation of irrigation facilities, and continuous flow of improved technology and farm practices.

Land Use Pattern

Of the total geographical land area of 307 Lakh hectares, approximately 62% is under cultivation, 28% is under forests, and 10% is under non-agricultural use. The Government has provided land-ceiling exemptions to encourage private sector to take up wasteland development.
	MP Land use pattern
	Source: Govt. of MP – Post Chhattisgarh Profile of state

CROPPING PATTERN

Madhya Pradesh, with its large land area, enjoys diverse climatic and soil conditions making it possible to grow a broad range of agricultural products round the year. The state comprises of a total of 11 agro-climatic zones and 5 crop zones. The recent creation of Chhattisgarh State has led to a drastic reduction in the Rice crop zone of the state.

In terms of the cropping pattern, 65% of the cropped area is under food crops, including foodgrains and horticulture. The remaining is under non-food crops, such as oilseeds, plantation and fibre crops. The main crops grown in MP include wheat among cereals, gram among pulses, and soyabean in oilseeds.

Cropping Pattern in MP
Crop (‘97-98)	Cropped Area ‘000 Ha	Share of the Total %	Share of the Total %
Wheat	4502	22%	2%
Rice	1656	8%	69%
Cereals	8548	42%	33%
Gram	2414	12%	7%
Pulses	4022	20%	20%
Fruits & Vegitables	181	1%	34%
Spices	318	1.5%	4%
Horticulture	499	2.5%	17%
Total Food crops	13068	65%	29%
Soyabean	4399	22%	1%
Oilseeds	5837	29%	6%
Cotton	512	3%	0%
Non Food crops	7153	35%	5%
Gross Cropped Area	20482	100%	22%
Source: Govt. of MP, Dept. of Agriculture

MP is the fourth largest producer of wheat in the country accounting for 12% of the total production in the country. Durum wheat, grown in large quantities in the state, has found favour in the international markets. Also the Khandwa wheat is popular for Atta manufacture among the processing majors. Rice, Maize, Jowar and Millets constitute the other cereals.

MP is the largest producer of pulses, accounting for close to 20% of the country’s production. Of this, the state contributes 40% of the Gram production in the country occupying a 12% share in the cropped area of the state.

MP is the largest producer of Oilseed among the states (21%) largely on account of its dominance in Soyabean. Approximately 70% of the Soyabean production in the country is grown in Madhya Pradesh.

Although Horticulture has a limited cropped area of 2.5%, it enjoys certain distinctions.

»	MP leads in spices. It is the largest producer of Garlic, accounting for 37% of the production, and the second largest producer of Coriander.
»	Among vegetables, it is gaining a reputation for the Malwa potato, which is ideal for potato chips processing. Around 15% of the pea production is also concentrated here.
»	The main fruits being grown are Mangoes, Guavas, Banana and Citrus fruits.

MP is home to a large percentage of the country’s cattle population. It is the third largest producer of milk after UP & Punjab.

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	Madhya Pradesh State Industrial Development Corporation Limited