Bangalore (PTI): The Federation of Karnataka Chambers of Commerce and Industry (FKCCI) has termed as "most alarming" the current performance of the state's agriculture sector.

"Over the years, the contribution of agriculture to the State's GSDP has declined from 16 per cent in 2004-05 to 12 per cent in 2011-12," FKCCI said in a background paper for the technical session 'Agenda-Development Karnataka' of its 95th AGM today.

The performance of the agriculture sector has been disheartening during the 11th five-year Plan (2007-12). Since 2007-08, it witnessed a continuous decline in the growth rate with the only rise of 13.3 per cent in 2010-11, followed by a negative score (minus 2.9 per cent) in 2011-12.

Given that the work force dependent on agriculture is still high at about 60.2 per cent in Karnataka, the fast depleting share of agriculture in GSDP indicates a shortfall in agriculture output over the years, it said.

The misalignment of agriculture output and employment is contributing to stagnant and, in some cases, declining real incomes for a significant portion of major work force.

"This means that the already high disparity between workers in agriculture and other sectors may increase further," it said. "Development of agriculture based industries in the peripheries of rural Karnataka could be a major initiative for absorbing larger work force from agriculture," it stressed.

It said the promotion of agro-based industries and small scale industries in socio-economically vulnerable and backward districts would be effective strategies towards achieving inclusive and sustainable growth, FKCCI said.