Alarming Decline: Agriculture's share in J&K's GDP falls to 20%

Srinagar, May 27: Jammu and Kashmir is witnessing a concerning transformation in its economic landscape, with agriculture's contribution to the region's Gross Domestic Product declining significantly over the past decade and a half.

According to the Economic Survey 2023-24, the primary sector now accounts for only 20 per cent of Jammu and Kashmir's Gross Value Added, marking a substantial decline from the 28 per cent recorded 15 years ago.

The primary sector, which encompasses crops, agriculture, horticulture, fishing and aquaculture, forestry and logging, along with mining and quarrying activities, has traditionally served as the economic backbone of Jammu and Kashmir. However, unplanned development and the conversion of fertile agricultural land for non-farm purposes have accelerated this sector's decline.

"The primary sector has traditionally been a cornerstone of J&K's economy," notes the Economic Survey. "In 2024-25, the primary sector is estimated to contribute 20.00 percent to J&K's GVA. The importance of the primary sector remains significant, given its role in providing livelihoods to a substantial portion of the population."

This decline has far-reaching implications that extend beyond mere statistics. The reduced agricultural output has made J&K increasingly dependent on external food supplies to meet local demand, resulting in capital flight and heightened vulnerability to inflation. Notably, inflation rates in J&K consistently exceed national averages, partly attributed to this growing food dependency. The recent Pahalgam attack has further revealed how significant impacts on one sector create ripple effects throughout the entire economy.

While agriculture contracts, the tertiary or services sector has emerged as the dominant force in J&K's economy, contributing a substantial 61.70 percent to the region's GVA in 2024-25. This sector encompasses trade, repairs, hotels and restaurants, transport, storage, communication services, broadcasting, financial services, real estate, professional services, public administration, and other services.

The shift toward a service-oriented economy reflects J&K's natural advantages, particularly in tourism, leveraging the region's scenic landscapes and rich cultural heritage to attract both domestic and international visitors. Additionally, emerging sectors such as information technology, education, and healthcare are becoming increasingly important contributors to regional economic growth. The consistent expansion of the services sector underscores its growing importance in the regional economy.

The secondary sector, including manufacturing, construction, electricity, gas, water supply, and utility services, maintains a moderate 18.30 percent contribution to J&K's GVA in 2024-25. The construction industry has shown robust growth, supported by government initiatives aimed at improving connectivity and infrastructure development.

Regional industrial policies focus on attracting investments, promoting small and medium enterprises, and developing industrial clusters to boost manufacturing activities. Experts believe industrial progress could create necessary synergies for both primary and service sectors to achieve faster growth.

Javid Ahmad Tenga, President of the Kashmir Chamber of Commerce and Industry, emphasises the untapped potential in J&K's agricultural sector. "Kashmir, endowed with abundant natural resources and a favourable climate for agriculture, holds immense potential to combat unemployment," Tenga stated.

He said that "agriculture as a vital solution to the region's alarming youth unemployment rate,. To promote agriculture effectively, the conversion of fertile farmland for non-agricultural activities must be strictly halted, though current enforcement of existing protective legislation remains inadequate."

Industry experts propose comprehensive measures to revitalise the agricultural sector, focusing on crop diversification and value addition.

The transformation strategy emphasises replacing low-yielding crops like rice and oilseeds with high-value vegetables, including red cabbage, broccoli, Chinese cabbage, parsley, and celery. This shift addresses climate change effects, particularly the concerning 80 per cent decline in rainfall and snowfall that has significantly impacted traditional farming patterns.

Water efficiency emerges as a critical consideration in this agricultural transformation. Rice cultivation requires approximately 4,500 liters of water per kilogram of grain produced, whereas vegetable cultivation consumes substantially less water. This efficiency becomes crucial as climate patterns continue changing across the region.

The economic implications of agricultural transformation present compelling opportunities for farmers and the broader economy. Traditional rice cultivation yields approximately ₹1.60 lakh per hectare annually, while diversified high-value vegetable production can generate ₹7-8 lakh per hectare. This represents a four to five-fold increase in farmer income potential, significantly impacting rural livelihoods and economic stability.

Current maize cultivation practices also present opportunities for improvement. Traditional maize farming yields about 60,000 corns per hectare, generating ₹90,000 to ₹1.20 lakh in revenue. However, transitioning to high-value varieties like baby corn, popcorn, and sweet corn, combined with value-added processing similar to ready-to-eat products, could result in manifold income increases.

Horticulture development through high-density plantation presents another significant opportunity. Expanding cultivation of apples, cherries, walnuts, almonds, plums, peaches, and strawberries across suitable districts could substantially increase the sector's economic contribution while creating employment opportunities in rural areas.

Despite comprehensive recommendations and clear economic benefits, implementation faces significant challenges. While legislation exists to protect agricultural land from conversion to non-agricultural uses, ground-level enforcement remains inadequate and requires substantial strengthening. The gap between policy formulation and implementation continues to undermine agricultural development efforts.