Structural Changes in Horticulture Sector in India: Retrospect and Prospect for XIth Five Year Plan

Abstract

The growth of agriculture is not commensurate with other sectors of the Indian economy. The growth in agricultural sector has declined from 3.7 per cent during early reforms period (1991-92 to 1996-97) to 2.5 per cent per annum during Ninth and Tenth Plan (1997-98 to 2006-07) periods, while growth of the gross domestic product (GDP) was observed to be 5.7 and 6.6 per cent per annum during the corresponding period (Government of India, 2008). In agricultural sector, high-value segment is expected to contribute more to the wellbeing of the smallholders, as it requires more labour and generate higher returns than cereals (Joshi et al., 2006). The CGIAR system prioritises high value crops (in particular fruits and vegetables), on the premise that they provide poor farmers the opportunity to derive additional income and increase enterprise stability through crop diversification (CGIAR, 2005). The high value crops (HVCs) generally refer to non-staple horticultural crops which have higher net returns per unit of land than staples. The Working Group on horticulture, plantation crops and organic farming for the XI Five Year Plan (200712) redefined horticulture as “science of growing and management of fruits, vegetables including tubers, ornamental, medicinal and aromatic crops, spices, plantation crops their processing, value addition and marketing”. In 2005-06, horticultural crops contributed around 28 per cent of gross domestic product in agriculture from a mere 13 per cent share of national area under horticultural crops. Vegetables, fruits, plantations crops and spices contributed around 60, 31, 7 and 2 per cent of the total horticultural production respectively in 2006-07. The share of horticulture sector in value of agricultural exports during triennium 2003-05 was about 18 per cent which increased to 37 per cent in 2006-07 (Government of India, 2008). India is one of the largest and lowest cost producers of high value agricultural commodities and yet has a minuscule share in global trade. It produces nearly 11 per cent of all vegetables and 15 per cent of all fruits in the world. The unit value of its export (free on board, FOB) is nearly half the corresponding