‘Agriculture GDP growth rate likely to accelerate to 2.5% this fiscal ’

By: and | Published: October 14, 2015 12:46 AM

Despite a 14% rainfall deficit during the just-concluded monsoon season, the agriculture GDP growth rate is likely to accelerate to 2.5% in the current fiscal year...

Despite a 14% rainfall deficit during the just-concluded monsoon season, the agriculture GDP growth rate is likely to accelerate to 2.5% in the current fiscal year from a meagre 0.2% in the previous fiscal year, mainly because of a likely higher output in the winter crop and livestock, NITI Aayog member Ramesh Chand said on Tuesday.

“The livestock sector will witness growth of more than 4% in the current year,” Chand told FE. Often in drought years, livestock production were better as some of the key agricultural produces were used as by products like straw to feed animals, he noted.

The farm sector grew by 1.9% in Q1FY16. The Reserve Bank of India (RBI) in its monetary policy review on September 29 said the farm sector is likely to grow 1.5% in FY16. “Allied farm activities, which are more insulated from the monsoon, remain resilient and could partly offset the effects of adverse weather on crop production,” the central bank said.


Chand expressed optimism that rabi crops won’t be impacted by as unseasonal rains as happened  in FY15. “I think this kind of unseasonal rains has happened for the first time in the recorded history of agriculture, which pulled down the wheat production by 6 million tonne (in FY15),” he said.

Acknowledging that some regions like Maharashtra, Karnataka and Bihar have received deficient monsoon rainfall, Chand said that there may not be a significant decline in kharif or summer output compared to last year. “Since last year was also deficient rainfall year, this year there may not be much decline in kharif crop output,” he said.

According to the first advance estimate on kharif crop production released last month by the agriculture ministry, the country’s summer foodgrain production is projected to drop by less than 2% to 124.05 million tonne (MT) in the 2015-16 crop season compared to previous year.

Even agriculture minister Radha Mohan Singh recently stated that the country could produce 133 MT in the coming rabi season, compared with 126.38 MT a year before, thanks to a good rainfall in the rain-deficit states last month.

For boosting the agriculture sector, Chand said that the government has to go beyond providing price support system or minimum support price (MSP) and focus on the non-price factors such as such as creating irrigation infrastructure, promotion of marketing, widening insurance coverage and use of technology. “You can give price as an instrument to give relief to farmers, but you can not use price to address the deficiency in output. Given the current situation, we need to use both the price as well as the non-price factors,” he noted.

Ramesh has recommended non-price factors for dealing with fluctuations in monsoon rains leading to climate change, sudden outbreak of insects and pests like whitefly, that have damaged cotton crops in the past.

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