Especially in Northern India, as the farmers are less dependent on rainfall and have more favourable crop mix, coupled with better farm mechanisation, they will have better profits.
Indian farmers are expected to earn over 10% more in the Kharif season as the uneven rains have led to lower sowing. “Lower Kharif output is expected to push up mandi prices, and boost the profitability of most crops, providing respite to farmers,” according to CRISIL Research’s Agriculture Report 2019. Farmers are expected to get higher prices which is likely to increase the profit margins for them. Especially in Northern India, as the farmers are less dependent on rainfall and have more favourable crop mix, coupled with better farm mechanisation, they will have better profits, Hetal Gandhi, Director, CRISIL Research said.
The Kharif output may decline by 3-5% this year owing to the lesser area under Kharif sowing and yields being impacted by the uneven distribution of rains. Also, delayed monsoon has hit paddy sowing which is down by over 6%. For paddy farmers, the same is good news as paddy prices will witness a northward trend due to lower production. Paddy crops account for about a third of Kharif crop sowing. This is for the first time in three years that the Kharif sowing will not witness healthy growth.
“The quick catch-up in southwest monsoon has meant excess rains in August in a few sub-regions. This has affected Kharif crops, particularly paddy,” Dharmakirti Joshi, Chief Economist, CRISIL, said. For cotton and maize, cultivation could be higher than in the previous season as the farmers were incentivized by higher prices. However, the same is also subject to floods in Maharashtra, Odisha and Andhra Pradesh, and weak rains in West Bengal and the Marathwada region of Maharashtra as they could hit productivity. Further, pest attacks on maize and paddy could hamper productivity as August witnesses high-intensity rainfall. According to the CRISIL report, India is expected to ramp up cotton exports to China to support prices.
The abundance of rain, however, could spell the success of oncoming Rabi production as the excess rainfall replenishes groundwater resources and higher reservoir levels, Joshi added.