June sowing improves India’s prospects of record grains production: CRISIL

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The normal onset and steady progress of monsoon have increased the sowing area under kharif crops to more than double the level a year ago until June 26, improving chances of another year of record grains production.

The area under all kharif crops was at 315.6 lakh hectare as on June 26, nearly 30 per cent of the ‘normal area’ of 1,064 lakh hectare. Monsoon covered the entire country on June 26, 12 days earlier than the normal schedule and at the fastest pace since 2013.

Though the government is betting on a bumper harvest to increase the overall agriculture growth and boost the rural economy, farm-gate prices will remain a key concern. A big positive is the easing of farm trade through a new central law, which may allow at least a section of farmers to find new buyers, including food processors and retail biggies.

Agriculture and allied activities are likely to see a 2.5 per cent growth in FY21 as the effects of the pandemic on the sector have so far been varied, as these activities are not homogeneous, with each having its own set of dynamics, according to rating agency, CRISIL.

Gross value added (GVA) in India’s agriculture and allied sectors grew 4 per cent in FY20 while the sector’s average growth in the past six years was about 3.2 per cent.

Rainfall across the country was 22 per cent more than the long period average (LPA) and all the major agricultural states have received normal or higher showers during June 1-27.

This time around, there has been an increase in area under cotton and groundnut in Gujarat, the two main kharif crops in the state, due to early arrival of monsoon. The sowing area under cotton and groundnut more than doubled to 11.6 lakh hectare and 12.4 lakh lakh hectare, respectively, in Gujarat even as both are competing crops.

The government has set a target to raise the annual food grain production by 2 per cent at 298.3 million tonne (MT), comprising 149.92 MT in kharif season and 148.4 MT during rabi, for the 2020-21 crop year (July-June) after the IMD predicted a ‘normal’ monsoon (102 per cent of LPA). In 2019-20, production was 291.95 MT, against the target of 291.1 MT.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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