Agri Business

Farm profit to rise on better realisation, lower output

Our Bureau Mumbai | Updated on September 26, 2019

Farmers in north India are expected to receive higher profits

Profit from farm produce is expected to increase by 10-12 per cent in this kharif season due to lower output leading to better realisation.

After three years of healthy growth, the kharif output could decline 3-5 per cent this time, due to lower acreage, and fall in yields due to uneven distribution of rains, said CRISIL Research’s Agriculture Report.

The delayed onset of monsoon has already led to a 6.4 per cent decline in paddy sowing as on August 22. Paddy accounts for over 30 per cent of kharif season acreage. However, area under cotton and maize cultivation would be higher, due to better price realised last season.

Floods in Maharashtra, Odisha and Andhra Pradesh and weak rains in West Bengal and Marathwada are expected to affect output. “Additionally, higher rainfall in August is likely to increase pest attacks in maize and paddy, further impacting productivity,” it said.

Dharmakirti Joshi, Chief Economist, CRISIL, said that the quick catch-up in South-West monsoon in August has led to excess rain and affected kharif crops. He also said that the soil moisture will improve, leading to a good rabi season. “Lower kharif output is expected to push up mandi prices of paddy, cotton, soy bean, maize and jute providing respite to farmers,” he added.

Hetal Gandhi, Director, CRISIL Research, said that the northern states are expected to reap the highest profits owing to a more favourable crop mix, limited dependence on rainfall and higher farm mechanisation.

However, the southern peninsula, which had been severely impacted by lower rainfall and drought-like situation over the past three years, is expected to show an improvement in profit.

Profit for farmers in Maharashtra is expected to be lower as an increase in profitability from cotton is expected to be offset by the shrinking profit in sugarcane and crop damage in Madhya Maharashtra.

Published on August 29, 2019

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