Apr 21, 2024 (MENAFN via COMTEX) --
(MENAFN - Live Mint) "Agricultural output growth in FY25 is likely to come in at a five- year high of over 6%, aided by normal monsoon and a low base effect, and may help ease demand for guaranteed rural jobs, said Niti Aayog member Ramesh Chand the FY25 interim budget, the government has allocated â?¹86,000 crore for the state-fun rural job scheme, the same as the revised estimates for FY24."Monsoon is a major factor, which influences output of agriculture much more strongly for the crop sector. So, the monsoon forecast that we will have La Nina effect and rainfall will be 2% above normal is very good news for Indian agriculture. This news came when we have low growth. Production of a few commodities, including oilseeds, rice, sugar and wheat, came down last year (2023-24) due to erratic monsoon and patchy winter rains and a long dry spell," Chand told Mint.
Farm output in FY24 is estimated to have grown by a mere 0.7%, compared with an upwardly revised 4.7% growth in FY23, as per the statistics ministry's second advance estimates."Taking the base effect impact and the positive effect of monsoon into consideration, past trend and past pattern suggest that we can expect more than 6% growth in agriculture this year," Chand said El NinÌ?o caused insufficient rainfall. leading to water scarcity in some regions, besides droughts and prolonged dry periods across Asia, the India Meteorological Department earlier this week forecast above-normal monsoon rainfall at 106% of the long-period average (87 cm) this year. The El Nino weather phenomenon turning neutral and benign La Nina conditions setting in by August-September signals relief across sectors, especially in agriculture FY24, agriculture and allied sectors' GVA growth was 0.7% after it contracted 0.8% in the October-December quarter - for the first time in 19 quarters. GVA growth was 1.6% in the previous quarter, and 4.7% in FY23.
In FY17, FY18 and FY20, the sector recorded growth rates of 6.8%, 6.6% and 6.2%, respectively. Chand further said that farm output growth is one of the reasons affecting demand for guaranteed rural jobs under the National Rural Employment Guarantee Act (NREGA), which benefits the rural poor demand is a result of a couple of factors - monsoon and good growth rate, Chand said.
\"But the growth rate which is high because of good rainfall, has another positive side - it is more favorable for rain-fed crops like pulses and oilseeds. It is also favorable for millers," Chand added is very high in pulses and vegetables while that in edible oil is in negative. But overall crop sector growth in 2023-24 is negative, which is reflected in food prices. That number is not yet reported for crop and livestock separately. The overall growth rate being 0.68% in FY24 means that it is positive because of the growth rate in livestock sectors, Chand said indicating that prices of food commodities may ease on expectations of good monsoon precipitation."We have more area under pulses and if we have more production of pulses, we certainly can expect inflation in pulses to cool down."This comes at a time when food inflation remains high though it eased slightly in March. Food inflation fell to 6.88% last month from 6.95% a month earlier due to the easing of prices of pulses, vegetables and milk. However, the prices of other food products like paddy, cereals, onion, potatoes, fruits and meat rose during the month of pulses, especially tur remained high for several months due to lower production in the past two consecutive years. As per the agriculture ministry's second advance estimate released in February, tur production is pegged at 3.33 million tonnes (mt) in 2023-24 (July-June) crop year against domestic consumption of nearly 4.3-4.4 mt, growth in food grain was (-) 1.3%, (-) 2.2 in pulses, (-) 9.2% in oilseeds, (-) 9% in sugar, (-4) in cotton in FY24, Chand said."This time harvest of wheat in many states started very, very late. Crop is still in the field. In many areas, even harvesting has not started yet. So, I expect wheat crop to be bumper this time. I think some reason can happen there," the Niti Aayog member said when asked if the likely bumper wheat crop may result in an upward revision in agricultural output growth estimate of 0.7%.Although the agricultural output in 2023-24 crop year is estimated to be hit due to El Nino, wheat output is likely to be at a record high. As per the agriculture ministry data, foodgrain production in the 2023-24 crop year (July-June) could be 6.1% lower at 309 mt, while wheat output is expected to be higher at 112 mt from last year's 110.55 mt.
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COMTEX_451196719/2604/2024-04-21T18:13:12
