The Hindu Business Line : Foodgrains, oilseeds output seen at new high

BUOYED by copious monsoon precipitation, the country's production of foodgrains and oilseeds are expected to touch an all-time high of 212.20 million tonnes (mt) and 24.97 mt during 2003-04.

This is in marked contrast to the drought-impacted harvest of the previous year that resulted in the output of foodgrains, oilseeds and cotton plunging to their lowest levels since 1991-92 (168.38 mt), 1987-88 (12.65 mt) and 1987-88 (6.38 million bales), respectively.

According to the `second advance estimates' of crop production, released by the Agriculture Ministry here on Tuesday, the output of foodgrains during 2003-04 is expected to shoot up by 21.82 per cent (from 174.19 mt to 212.20 mt), while surging by 65.80 per cent (from 15.06 mt to 24.97 mt) for oilseeds and by 42.09 per cent (from 8.72 million bales to 12.39 million bales). In the process, this year's foodgrains and oilseeds production would surpass the previous records of 212.02 mt and 24.75 mt achieved in 2001-02 and 1998-99, respectively.

Significantly, the recovery in crop volumes comes alongside prices of most agricultural commodities ruling at much higher levels compared to last year. This effectively translates into a huge increase in farm incomes, which could further bolster the present buoyancy in the manufacturing and services sectors, adding to the overall `feel-good' phenomenon. The coming months could well see an enhancement in rural purchasing power, which is good news for India Inc.

In fact, with foodgrain output expected to soar by 22 per cent, oilseeds by 66 per cent and cotton by 42 per cent, there is even the possibility that the Central Statistical Organisation (CSO) would further revise upwards its 8.1 per cent GDP (gross domestic product) growth projection for 2003-04. This projection, made in its `advance estimates' released earlier this month, assumed an agricultural growth of only 9.1 per cent.

What lends credence to the likelihood of a further upward revision is the fact that the Ministry has revised downwards the `final' foodgrain output estimate for 2002-03 to 174.19 mt against the earlier `second advance estimate' of 182.57 mt. Similarly, the estimates for oilseeds and cotton production have been lowered by 4.4 per cent and 6.4 per cent, respectively. All this could mean that the decline in the agriculture sector may be higher than the CSO's latest estimate of 5.2 per cent for 2002-03. This, in turn, would impart an upward bias to this year's overall farm sector growth.

The only crop expected to suffer a decline in production this year is sugarcane (255.46 mt from 281.58 mt in 2002-03).

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