While production has
dropped, it has not been accompanied by a commensurate increase in price.
Last week, while the CSO released the Q1
GDP numbers, it also showed numbers for agriculture, forestry and fishing as a
segment. For the June quarter, this segment’s growth in real terms was 2 per
cent, against 5.1 per cent in the same quarter of the previous year.
Agri GDP growth has been sliding since
the beginning of 2018-19. Against the 5 per cent growth reported in 2017-18,
the year 2018-19 ended with a growth of 2.75 per cent.
Though broad numbers from the Ministry of
Agriculture show that the country has been doing well on crop output,
dissecting it reveals that there has been a drop in production in some major
food as well as non-food crops.
Among non-food crops, take groundnut, for
instance. The crop’s output for 2018-19 is estimated at 66.95 lakh tonnes
against 92.53 lakh tonnes in 2017-18. Similarly, castor seed production last
year was estimated at 12.15 lakh tonnes, down from 15.68 lakh tonnes in
2017-18. In the case of cotton, production has dropped, from 328 lakh bales in
2017-18 to 287 lakh bales in 2018-19.
In the foodgrains basket, pulses, maize,
bajra, ragi and all nutri cereals have seen a production drop in 2018-19.
Until 2017-18, foodgrain production was
growing robustly. If we break the last 10 years as UPA and NDA years, between
2009-10 and 2013-14, foodgrain output recorded an annualised growth of 5 per
cent. This, however, reduced to 3 per cent in the NDA years between 2014-15 and
2018-19.
While the new irrigation projects helped,
monsoon failure in four of the five years (between 2014-15 and 2018-19 – two
deficient and two below normal monsoon rains) had their impact on crop output.
The slump in crop output has been slow in
reflecting in price because of weak demand and in some cases because of excess
inventory from previous years being available in the market, like in the case
of pulses. However, prices have started moving up of late. This is what explains
food inflation ticking up in the last few months and the nominal agri GDP
growth at 7.9 per cent for the April-June 2019 quarter versus 6.8 per cent in
the same period of the previous year.
Weakness in domestic demand aside, demand
from export orders for certain agri products was also poor, which kept prices
muted. In the April-June 2019 quarter, India’s agri commodity exports were Rs
60,614 crore, down five per cent from the previous year. Export of rice, coffee
and tea have been lower than last year.
Farmers’ income
In the coming quarters, for agri GDP
growth to revive, the sub-sectors in agriculture – forestry, livestock and
fishing – need to show some strength.
Otherwise, the task of doubling farmers’
income, for which just three years are left, looks difficult. The income
support scheme alone can’t help.
The higher MSPs announced haven’t really
had an impact, except on paddy, wheat and some pulse crops. eNAM – the
electronic National Agriculture Market scheme, which was expected to bring more
buyers for a farmer’s produce, is still in a preliminary stage.
Thanks to Raj Laxmi Nirmal - The Hindu Business Line
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