Budget 2019

Farm growth rebounds 4.1% on good monsoon

Our Bureau Bengaluru | Updated on January 12, 2018 Published on January 31, 2017


Frequent recourse to stock limits and controls on agricultural trade are key challenges

The Survey has pegged the growth in agriculture and allied sector for the current year at 4.1 per cent, up from 1.2 per cent in the previous year.

“The higher growth in agriculture sector is not surprising as the monsoon rains were much better in the current year than the previous two years,” the Survey said. The country witnessed a near-normal monsoon across various parts in 2016, except Southern Peninsula, after consecutive drought years.

Incidentally, this is in sync with the projections made by the Central Statistics Office in the recent advance estimates. The CSO has projected a 4.1 per cent growth in agriculture on the back of good monsoons. The first advance estimates by the Agriculture Ministry had pegged the growth in foodgrain output for the kharif 2016-17 season at 8.9 per cent against a decline of 3.2 per cent in the corresponding last year.

“A favourable monsoon after consecutive years of drought, supplemented by farmer-oriented schemes, has increased the acreage and yield of most kharif crops. The sown area in the current rabi season has shown 6 per cent increase in comparison to the last year,” said President Pranab Mukherjee addressing the joint sitting of the Parliament.

Demonetisation impact

However, the Survey, while stating that the cash-intensive agriculture sector was affected more by the demonetisation, did not quantify the impact of cash crunch on agriculture growth though the progress of rabi sowing of key crops such as wheat and gram have been factored in while calculating the impact on GDP.

Contrary to early fears, as of January 15, 2017, aggregate sowing of the two major rabi crops — wheat and pulses (gram) — exceeded last year’s planting by 7.1 per cent and 10.7 per cent, respectively, it said.

“Favourable weather and moisture conditions presage an increase in production. To what extent these favourable factors will be attenuated will depend on whether farmers’ access to inputs — fertiliser, credit, and labour —was affected by the cash shortage,” the Survey said.

Targeted credit flow

Further, it also pointed out that about 84 per cent of the targeted agricultural credit flow for the fiscal was achieved by September 2016 itself, which was higher than corresponding previous year’s 59 per cent.

The agriculture credit target was fixed at ₹9 lakh crore for 2016-17 against ₹8.5 lakh crore in the previous year.

Highlighting the challenges in agriculture sector, the Survey said that frequent recourse to stock limits and controls on agriculture trade, which draws upon the antiquated Essential Commodities Act, were creating uncertainty for farmers.

Further, it also pointed out that protection of intellectual property rights in the seed sector remains a challenge in agriculture.

Also in the fertiliser sector it was proving easier to rehabilitate unviable plants in the public sector rather than facilitate the exit of egregiously inefficient ones.

Published on January 31, 2017
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