India's agricultural output ranks second in the world. Agriculture employs 42% of India's workforce and contributes 17-18% to the country's GDP
India is the seventh largest country in the world by land area and the second most populous in the world, with 1.35 billion inhabitants, 66% of whom still live in rural areas. The rural population is expected to peak around 2030 and then decline.
India is the third largest economy in the world in purchasing power parity terms. The economy is projected to be the fastest growing of any G20 economy. With structural transformation well underway, India's services sector is the fastest growing segment of the economy, accounting for 54% of GDP in 2016; industry 30% and agriculture 17%. Long-term growth prospects are positive due to India's young population, correspondingly low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy.
Over the past 50 years, India has transitioned from being dependent on food aid to being a stable net exporter of food. Food grains and oilseeds still account for almost 80% of the crop area, although India has diversified into high-value commodities and has become the world's largest producer of milk, pulses, horticulture and livestock as well as the world's largest shrimp and spices export country. Although yields of most crops have at least tripled, they remain relatively low by regional standards. Despite the increase in irrigated area, more than half of India's total planted area and 40 percent of all crop production are still rain-fed, making it more vulnerable to changes in the monsoon. Indian agriculture is therefore highly vulnerable to climate change. seasonal water shortages, rising temperatures,
Climate change will disproportionately affect the most vulnerable groups - farmers in rainfed areas, landless laborers and women, who could lose 20-25% of their income (Economic Survey 2017/18). A major challenge for India is therefore to promote the widespread adoption of climate-smart technologies and other adaptation measures to sustain production and productivity and ensure continued national food and nutrition security.
Although India still has the largest number of poor people in the world, extreme poverty has fallen dramatically. In 2011-12, the overall poverty rate was estimated at 22%, although this figure masks a considerable urban-rural gap (26% vs. 14%). About 80 percent of the 270 million poor live in rural areas. The rural poor include marginal small farmers, the rural landless, many of whom are from scheduled tribes, scheduled castes and other disadvantaged groups.
IFAD has been working in India for over 30 years. The current National Strategic Opportunities Plan is fully in line with the government's policy framework to double farmers' real income by 2022. Over the period 2018-2024, IFAD will support governments in developing systems that deliver the services and producer organizations needed by smallholders for food and agricultural production that are rewarding, sustainable and resilient to climate change and price shocks.
IFAD works at the grassroots level, targeting the poorest marginal farmers, women, youth, landless people, tribal communities and scheduled castes. Projects have been addressing structural issues such as sociocultural exclusion, lack of access to natural resources, agricultural land and quality public services, as well as market asymmetries and weak bargaining power of small farmers.
Over the years, IFAD and the Government of India have achieved significant results in investing in the commercialization of smallholder agriculture and building the capacity of smallholders to generate income from market opportunities. These projects foster innovative partnerships between farmers and private sector companies. As a result, farmers are getting improved technology packages, achieving higher yields, and getting better prices for their produce.