After government estimates said that Indian agriculture could be heading for bumper kharif crop harvest, experts say that it could provide a major fillip to rice exports. However, the development could potentially put increased pressure on the government to buy the crops at the MSPs, if market rates fall below the benchmark rates on bumper arrivals at mandis.

According to government estimates production of kharif foodgrains for 2018-19 crop year (July-June) has been estimated at a record 141.59 million tonne on the back of increased acreage under paddy and expected better yield in pulses and coarse cereals. Notably, last year’s kharif output was 140.73 mt as per the latest (fourth) estimate, up from 134.67 seen in the first estimate.

Interestingly, rice output in kharif 2018-19 is estimated to be a record 99.24 million tonne in this kharif season, up from 97.5 million tonne in the previous season. This could potentially boost up the exports, say experts. The sowing area under paddy was 2.36% higher at 38.6 million hectares as of September 20 as against the year-ago period. However, a higher output means the government will have to buy more rice from farmers, experts told the Financial Express.

In the year so far, the Food Corporation of India (FCI) has purchased a record 38.16 million tonne of rice as of September 24 in the 2017-18, the cost of which is estimated at a whopping Rs 1.13 lakh crore for 2018-19, up by more than Rs 12,000 crore over the previous year. Earlier this month the government announced a package — PM-AASHA — of price deficiency support schemes for agriculture crops with an extra Budget outlay of Rs 15,000 crore for procurement of oilseeds and pulses crops.

Added to this the fact that, these are preliminary estimates and can undergo upward revisions based on further feedback from states. The cumulative rainfall in the country during the monsoon season till date has been 9% lower than the Long Period Average. However, rains in north-west and central India and southern Peninsula have been normal and hence most of the major crop producing states have witnessed normal rainfall, the government said.