India’s foodgrain production in current kharif season equals last year’s record output of 138 million tonnes

India’s foodgrain production in current kharif season equals last year’s record output of 138 million tonnes

New Delhi,July29:India’s foodgrain production in the current kharif season might equal if not surpass last year’s record output of 138 million tonnes (mt), a prospect that will give a strong support to the economic growth in the current financial year besides mitigating inflationary pressure on food items. By Friday, 75% of the “normal kharif area” was sown and areas under all major crops except oilseeds were higher than in the comparable period in the last kharif season. According to data released by the ministry of agriculture, 791 lakh hectares have already been sown, up 3% from the year-ago period. Well-distributed monsoon rains in the last eight weeks have indeed helped farming — only a few regions in south India like south interior Karnataka and all of Kerala have reported deficient rains. Sowing will be completed by mid-August. However, as standing oilseed crops in Saurashtra, Kutch and North Gujarat regions were partly destroyed by heavy rains, there are concerns over these crops, the robust harvest of which is critical to reducing India’s edible oil import bill.

Contrary to expectations that the cropping area under pulses might shrink this year following a sharp fall in their prices in the last few months, the area sown was 114.88 lakh hectares till Friday, 7% higher than in the comparable period in 2016-17. Agriculture experts say the good rains together with the hike in the MSP (minimum support prices) for pulses may have motivated farmers to sow more. The total production of pulses in 2016-17 is estimated at 22.40 mt, up from 16.35 mt in 2015-16. However, the area under arhar has declined 15% to 34.88 lakh hectares as retail prices have witnessed a sharp fall of more than 40% in the last few months because of a bumper output in last year’s kharif. “As there is no other remunerative crop, farmers have inclined towards the sowing of pulses. Even though the arhar area is down 15%, it will have no effect on prices as we have ample carry-forward stocks,” said Nitin Kalantri, secretary, Maharashtra Dal Miller Association.

Retail food inflation hit a fresh low of -2.12% in June. If the good monsoon, as has been forecast, results in a bumper farm production in 2017-18, inflationary pressure on food items will be kept in check in the coming months as well, according to analysts. “Higher acreage means food inflation would remain in check, giving the RBI (Reserve Bank of India) sufficient assurance when it decides to cut policy rates later this year. On the flip side, if prices do not recover sufficiently, owing to agri-marketing stress, it could dent farm incomes which will not only add to the clamour for loan waivers but also depress rural consumption,” a report by Axis Capital has stated.

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