The Hindu Business Line : Farm GDP growth declines to 1.1 pc

DEFICIENT and uneven south-west monsoon during 2004-2005 and the base effect of high growth in the previous year has resulted in a sharp drop in the growth of real GDP originating from agriculture and allied activities to 1.1 per cent from 9.6 per cent a year ago, the Reserve Bank of India has said in its annual report for 2004-2005.

In 2004, the South-West monsoon was erratic with an `unusual warming' of sea surface temperatures over the Equatorial Central Pacific region leading to weakness in the monsoon over India, it said.

In comparison, the real GDP from industry has moved up to 8.3 per cent from 6.5 per cent in the earlier year while services sector edged down to 8.6 per cent from 8.9 per cent.

Quoting the Ministry of Agriculture statistics, the RBI said the total foodgrains production during 2004-2005 was estimated at 205 million tonnes, four per cent lower from the previous year. Kharif production fell by 12 per cent while rabi production moved up four per cent. Overall the index of agricultural production is expected to have registered a decline of 1.2 per cent.

While agricultural production declined, milk production increased by 3.3 per cent. The share of livestock sector output in agriculture GDP increased from 30.9 per cent to 32.4 per cent and the share of fruits and vegetables output moved up sharply to 26 per cent from 17.8 per cent.

Although rains were erratic, the total area that experienced drought conditions was 18 per cent.

The RBI said an analysis of the trends in rainfall deficiency and foodgrains production suggests a reduced dependence on the South-West monsoon. But Indian agriculture continues to depend on weather performance.

"Indian agriculture is becoming increasingly unsustainable in terms of maintaining productivity levels and environmental balance,'' it said.

The cropping pattern is distorted in favour of rice and wheat while key components of average consumption basket such as other cereals and pulses are being disfavoured. "The distorted cropping pattern has stemmed basically from a skewed incentive structure embedded in agricultural pricing policies, particularly minimum support prices,'' it said.

However, in recent years, rising incomes, urbanisation and globalisation have opened vistas for diversification of agriculture. At present, value-addition to raw agriculture produce in food processing is seven per cent of the raw produce. This is expected to increase to 35 per cent by 2025. Fruits and vegetables processing is expected to increase from the current two per cent to 25 per cent during this period.

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