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Agricultural Growth Moderates Despite Strong Allied Sectors

Why in the News?

The Economic Survey 2024-25, tabled in the Parliament of India, highlights a slowdown in agriculture sector growth to 3.5% in Q2 of 2025-26, even as allied sectors like livestock and fisheries remain robust.

 

Agriculture Growth Trends and Sectoral Performance

  • The agriculture and allied sector recorded an average annual growth of 4.4% over the last five years at constant prices, reflecting relative resilience amid economic volatility.
  • However, growth in Q2 of 2025-26 slowed to 3.5%, nearly one percentage point below the recent average, signalling emerging structural and climatic pressures.
  • The decadal growth rate of 4.45% (2015-16 to 2024-25) is the highest among previous decades, indicating long-term improvement despite short-term moderation.
  • This sustained decadal performance has been driven largely by allied activities, rather than traditional crop agriculture.
  • The livestock sector posted a strong growth of 7.1%, reflecting rising demand for milk, meat and animal-based products.
  • Fishing and aquaculture emerged as the fastest-growing sub-sector, expanding at 8.8%, aided by policy support, exports, and coastal livelihoods.

Crop Sector and Foodgrains Production Performance

  • The crop sector grew at a relatively modest 3.5%, indicating stagnation concerns linked to monsoon variability, input costs, and productivity constraints.
  • Despite these challenges, foodgrains production has shown a steady upward trend, underscoring the sector’s underlying strength.
  • India’s total foodgrains output is estimated at 3,577.3 lakh tonnes in the agriculture year 2024-25, marking a significant milestone.
  • Growth in foodgrains has been driven by higher production of rice, wheat, maize, and coarse cereals, supported by improved acreage and yields.
  • The increase reflects the role of minimum support prices (MSP), improved procurement mechanisms, and targeted interventions in key cereals.
  • However, slower growth compared to allied sectors points to the need for crop diversification and value addition.

Key Points: Agriculture Sector
● Agriculture and allied activities include crops, livestock, forestry, fishing, and aquaculture.
● Constant prices measure real growth by excluding inflation, crucial for accurate sectoral assessment.
● Allied sectors are increasingly important for income diversification, doubling farmers’ incomes, and employment generation.
● Decadal growth analysis helps assess long-term structural changes beyond annual fluctuations.
● Food security relevance: Rising foodgrains output strengthens buffer stocks, PDS, and price stability.
● Policy implication: Future growth depends on boosting crop productivity, climate resilience, and integrating farmers with high-growth allied sectors.