Farmer profits expected to soar this fiscal; here’s why irregular monsoon couldn’t hit profitability

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December 17, 2019 6:16 PM

Even as irregular monsoon hit prospects, farmer profit is expected to rise in crop year 2019-20,a report said.

According to the ministry, the release of installments to beneficiary farmers are in various stages of progress. (PTI)

Even as irregular monsoon hit prospects, farmer profit is expected to rise in crop year 2019-20, a  report said. Overall farm profits per hectare are likely to surge 7-9 per cent on-year, in the period April 2019 to March 2020, owing to higher mandi prices for kharif crop and likely bumper rabi harvest, CRISIL Research said in a report. “Unprecedented heavy rainfall in September-October would lower kharif crop production by 4-6% on-year. On the other hand, a 10% above-normal monsoon has filled reservoirs to the brim, which in turn, promises to elevate rabi crop productivity and lead to 7-8% higher output,” the report added.

Even as the mandi prices would be higher due to lower supply of kharif produce, higher minimum support price (MSP) and government support for wheat, accounting for over half of the rabi crop output is expected to support price growth for rabi, CRISIL added. It will lead to an expansion in the overall per-hectare farm profitability in FY20.

Also read: Maharashtra gets Amul like dairy cooperative with all women team; to sell products under Creyo brand

“Though sowing gained pace in response to the monsoon’s progress, many parts of the country, including Punjab, Haryana, Uttar Pradesh, and West Bengal, continued to be dry. On the other hand, states like Maharashtra, Madhya Pradesh, Karnataka, Kerala, Andhra Pradesh, Rajasthan and Odisha suffered from crop damage due to excess rainfall and floods,” CRISIL Research also said in the report.

Meanwhile, global rating agency Moody’s recently said that the government measures to stimulate domestic demand — income support to farmers and low income households, monetary policy easing and a broad corporate tax cut — would be “limited in offsetting the slowdown” and added that a modest recovery was expected for next year.

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