Since over 30% of paddy production is procured at minimum support price (MSP) by the government for distribution of rice through the ration shops, its mandi prices are near about the benchmark level.
Higher than normal monsoon rainfall across the country, 5% above normal so far, has boosted sowing of kharif crops by 19% on year as on Friday, brightening the prospects of another year of bumper harvest. Also, there are no reports of any serious pest attacks on the standing crop so far, except the spread of locusts in some states which have lately come under control. However, farmers’ profitability will hinge on prices, of which it is early to provide any guidance, according to analysts. As of now, most rabi crops are being sold profitably by farmers, and this has helped avert a rural distress during the pandemic period, along with the works available under the rural employment guarantee scheme.
“As of today, we should expect at least last year’s level or even higher output. This is possible because of climate resilient varieties of paddy and adoption of good agricultural practices by farmers,” Trilochan Mohapatra, director general of Indian Council of Agricultural Research, told FE on Friday.
The production of rice, the main kharif crop, was 101.7 million tonne in 2019-20 crop year (July-June), marginally lower than all-time high of 102.04 million tonne in 2018-19. Rice production has been increasing in recent years, even as area has remained unchanged, indicating rising productivity.
This time around, the all-India planting area of paddy was higher by 17.3% on year at 22.02 million hectare, as on July 24. Most of the farmers in West Bengal, Uttar Pradesh, Punjab, Haryana, Chhattisgarh, Odisha, Andhra Pradesh and Telangana are dependent on rice for their income. While kharif oilseeds, pulses, coarse cereals are mostly grown in Madhya Pradesh, Maharashtra, Karnataka, Gujarat and Rajasthan.
As sowing areas under all categories of crops are higher y-o-y, there may not be a fall in kharif production, rather it can be higher from last year’s record 144 million tonne. However, a bumper production may not be able to bring in good news for farmers if prices are subdued due to lack of demand. Normal functioning of restaurants and hotels are not expected in near future, unless Covid vaccine is developed.
To be sanguine, mandi prices of key rabi crops are not only above the respective MSPs but are significantly higher than the year-ago level. Higher market prices, coupled with robust production, are boosting farmer’s income and profitability.
Progressive sowing under all the kharif crops has covered 75% of the season’s normal area till Friday. “If rains in August and September are also normal, we will see bumper kharif crop. Unless demand increases, the prices may be depressed. The demand will also depend on economic recovery and measures the government takes steps to check the spread of Covid 19 pandemic. As the area under several crops, like cotton and soybean, will be higher than last year, going forward, the prices may be under pressure,” former agriculture secretary Siraj Hussain said.
Since over 30% of paddy production is procured at minimum support price (MSP) by the government for distribution of rice through the ration shops, its mandi prices are near about the benchmark level. However, this is not the same for kharif pulses and oilseeds as seen the last two years when prices in mandis ruled up to 30% below their MSPs.