Rains, farm output seen picking up pace
Over a week’s delay in the monsoon’s onset in the country has forced rain-dependent farmers, especially those in central and north India, to postpone sowing of kharif crops, but experts allayed the fears that grain output could be hit. With the Met department predicting above-normal monsoon rains this year, a welcome break after two consecutive years of deficient rains, senior government functionaries had bet on a sharp pick-up in both farm production and agricultural GDP growth in the current year.
According to agriculture ministry data released on Friday, kharif sowing so far has been 10% lower than in the corresponding period last year, while water levels at the 91 large reservoirs have fallen to an abysmal 15% of their combined installed capacity. The sowing of rice, pulses and oilseeds have got delayed.
“A week’s or 10 days’ delay in the monsoon would not adversely impact the kharif sowing and output, as the rains are expected to pick up pace as predicted by Met department shortly,” Ashok Gulati, former chairman, Commission for Agricultural Costs and Prices, told FE.
NITI Aayog member and agriculture expert Ramesh Chand had predicted more than 6% farm growth for 2016-17 should monsoon forecasts hold good. The agriculture ministry has also set the country’s grain production target at 270.10 million tonnes for the 2016-17 crop year (July-June), up 6.7% from the actual grain production of 253.23 million tonnes in 2015-16.
Though retail inflation hit a 21-month high of 5.76% in May, led by a 7.55% spike in food inflation, the pace of price pressure is expected to ease as seasonal (summer) effects ebb, analysts said. A good spread and quantum of rains and the government’s recent decision to keep the hike in the benchmark prices of key kharif crops under 5% will help keep inflation from spiralling out of control, they added.
The India Meteorological Department (IMD) has stated that the quantum of rainfall during June 1-16 has been 46.2 mm, 25% less than benchmark long-period average. The monsoon had hit the Kerala coast only on June 8 against the usual date of June 1.
According to the IMD, the monsoon rains after covering Kerala, Karnataka, Konkan and northeastern regions entered West Bengal and Odisha on Friday. “Conditions are favourable for further advance of the southwest monsoon into remaining parts of Goa, Madhya Maharashtra, Marathwada, Vidarbha, Chhattisgarh and east Madhya Pradesh, north interior Karnataka, coastal Andhra Pradesh, Odisha, Gangetic West Bengal, Telangana and parts of Jharkhand and Bihar during next two to three days,” the IMD said.
The progress of the monsoon during next couple of weeks would be keenly monitored as the rains are expected to enter areas growing pulses (moong, tur or arhar and chana) and oilseeds (groundnut and soyabean) in Maharashtra, Gujarat, Madhya Pradesh, Rajasthan and Andhra Pradesh. “The kharif sowing, which has commenced on a sluggish note mainly because of late arrival of the monsoon, would pick up pace in the rain-fed regions as the monsoon progresses. With the expectation of normal monsoon rains this year, the sowing will be much more than the last two years, especially in crops like pulses, oilseeds and coarse grains,” said Ajay Jakhar, chairman, Bharat Krishak Samaj.
Notwithstanding a deficient monsoon last year, according to the agriculture ministry’s third advance estimate, the country’s foodgrain production in 2015-16 is pegged at 252.2 million tonnes, compared with 252 million tonnes in 2014-15.
“With more than adequate rainfall expected, pulses output is expected rise significantly, which would reduce our imports next year,” said PK Joshi, director, South Asia, International Food Policy Research Institute said.
Recently, the government announced steps to address the shortage of pulses that had led to their prices skyrocketing. Apart from stepping up procurement from farmers, imports are to be increased, especially from countries like Myanmar. India’s production of pulses has remained stagnant in the range of 17-19 million tonnes for the last five years while consumption grew from 25 million tonnes to 27 million tonnes during the period.
According to the Economic Survey, retail inflation will likely remain in the 4.5-5% range in 2016-17, within the central bank’s target of 5% by March 2017, despite an expected spiral in wage costs following the implementation of the Seventh Pay Commission recommendations.
The agriculture and allied sector grew just 1.2% in 2015-16, even on a favourable base (the sector witnessed a 0.2% contraction in 2014-15), as deficient monsoon rains for a second straight year hit farm production. So good monsoon showers hold key to boosting farm growth apart from reviving rural (consequently private) consumption as well as investment. The weather office has maintained an above-normal monsoon forecast (at 106% of a long-period average) for 2016.