Rabi sowing trails, may hit rural economy

Rural economy is in for some trouble. Prices for crops such as cotton, maize and oilseeds are hovering near minimum support levels. Chances for rise in prices of agricultural commodities are bleak in view of supply glut globally. To top it all, farmers are likely to harvest less this season to June with rabi sowing being reported lower as on Friday.

The rural economy depends heavily on agricultural income. Lower farm income will affect sales of fast moving consumer goods (FMCG), gold jewellery and vehicles. In turn, industrial production is likely to come under pressure. Sales of FMCG goods have already taken a hit in the October quarter. It affected industrial production, which was 4.2 per cent lower in October compared with the year-ago period.

Sowing operations in almost all the crops barring rice are drawing to a close and there is also a possibility of agricultural production being lower this season. According to the Ministry of Agriculture, coverage of all crops under rabi this season is about five per cent lower at 530.22 lakh hectares (lh). Notably, the pace of sowing has begun to slow with the overall coverage dropping to around 19 lh in the past week from 40 lh the previous week. Deficient rains, dense fog, particularly in the North, and poor soil moisture have led to a drop in sowing operations. With fog conditions expected to continue in the coming week, coverage of crops could be further affected. Rain and snowfall are expected to add to growers’ woes. While the South-West monsoon that lashes the country during June-September was 12 per cent deficient this year, the North-East monsoon, which brings rain during October-December, is so far 31 per cent deficient. Last week, the deficiency level touched 70 per cent across the country.

Some of the key states for rabi crops such as Gujarat, Rajasthan, Punjab, Madhya Pradesh, Bihar, Uttar Pradesh, Telangana and West Bengal have received 50 per cent lower than normal rainfall. The end result could be that crops such as wheat, rapeseed and rice, to some extent, could be affected.

Deficient rainfall this year has resulted in storage level in the 85 major reservoirs of the country dropping to lower than the last 10 years’ average.

According to the Central Water Commission, the storage was 61 per cent of the full reservoir level or 95.081 billion cubic metres. The level is likely to have dropped further in view of poor rains last week. Storage level in Andhra Pradesh is 64 per cent below normal, while it is 48 per cent below normal in West Bengal.

Among rabi crops, wheat acreage is down by three per cent, chana (gram) sowing is down by nearly 15 per cent, pulses coverage by eight per cent and oilseeds planting by six per cent.

In the kharif season, foodgrain production is estimated to have dropped by about 10 million tonnes (mt) at 120.27 mt. Rice output has been projected lower by three mt at 88.02 mt and that of maize has been pegged at 16.03 mt (17.68 mt). Farmers growing pulses could be an exception, getting better returns. But they, too, could be constrained by lower production and yield. Going by the data on the Consumer Affairs Department website, prices of tur (₹83 a kg this year versus ₹76 a year ago), urad (₹83 vs ₹65), moong (₹98 vs ₹78) and masur (₹84 vs ₹65) are all up over the last 12 months.

According to the office of the Economic Advisor in the Ministry of Commerce and Industry, the pulses index increased five per cent between January and November in the Wholesale Price Index.

Consumers may have to pay more for pulses, but a global glut in other crops such as wheat, maize and oilseeds could prevent any alarming rise in prices of agricultural commodities.

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