Summer crop seen at record 144.52 MT, boosts FY21 sector prospects

India will see record production for 2020-21 summer crop (July-June) at 144.52 million tonne (MT), on the back of increased acreage under paddy and better yields in pulses and coarse cereals, the government said on Tuesday, cementing the notion that agriculture sector will be a silver lining on the economic cloud. Last year’s kharif output was 143.38 MT, an all-time high.

The robust kharif output could potentially increase pressure on the government to buy the crops at the MSPs if market rates fall below the benchmark rates on bumper arrivals at mandis. Amid the row over farm Bills cleared by Parliament recently, prime minister Narendra Modi has said MSP operations would continue and the government even advanced the announcement of rabi MSPs.

The government expects the farm and allied sectors to not just remain insulated from the Covid-19 impact but also lead an economic revival, especially in rural areas. The gross value added (GVA) in the sector grew a decent 3.4%, year on year, in the June quarter, when overall GVA contracted by a record 22.8% and the real GDP shrank by 23.9%. The farm sector has witnessed a roller-coaster ride in recent years, with GVA growth having swung from -0.2% in FY15 to 6.8% in FY17. The rate of expansion again eased to just 2.4% by FY19 before inching up to 4% in the last fiscal.

The government releases crops output estimates five times, based on the sowing data being updated and arrival of the crops in the market. According to the first estimates of the kharif crops released on Tuesday, rice output in kharif 2020-21 is estimated to be a record 102.36 MT, up from 101.98 MT in the previous season. Even as the kharif harvesting season starts from October, some of the early-sown crops start arriving in mandis in September.

Production of pulses is estimated at 9.31 MT – higher by 1.59 MT from last year’s estimated production. Among the cash crops, cotton output for this year has been pegged at 37.12 million bales while sugarcane production is likely to be 399.83 MT, up from 355.7 MT last year.