2012-13 grain output to fall 3.5%

Slight dip in wheat & rice for 2012-13 but stocks comfortable; pulses up, some oilseeds down, say 2nd advance estimates

The government today estimated foodgrain production in the 2012-13 crop marketing year (beginning June) at 250.14 million tonnes, a little over nine mt less than last year. The reason given is lack of enough rain during the monsoon season.

The second advance estimates for 2012-13, released by the Department of Agriculture, showed output of all crops, barring pulses and mustard, is expected to be less than last year.

“We had produced 260 mt foodgrain last year. This year, we have crossed 250 mt, irrespective of drought in some districts of Maharashtra, Gujarat, Rajasthan and parts of Karnataka,” Agriculture Minister Sharad Pawar said at the Indian Seed Congress here, organised by the National Seed Association of India.

The high base effect of last year is also expected to magnify any fall in farm production. “2011-12 was an extraordinary year for Indian agriculture. So, repeating the same in 2012-13 is difficult, more so when large tracts of farm land during the kharif season suffered from moisture stress due to low rain,”said Ramesh Chand, director of the National Centre for Agricultural Economics and Policy.

The data shows production of wheat in the ongoing rabi sowing season is expected to be 92.3 mt, about 2.7 per cent less than last year. Production of rice, mainly grown during the kharif sowing season, is estimated to be 101.8 mt, about 3.3 per cent less than last year.

However, the fall in production of major cereals is unlikely to have a pronounced impact on prices, as the government already has a stock of 65 mt of foodgrain.

Yesterday, the Central Statistical Office, in its advance estimate of GDP for 2012-13, had pegged farm growth at a three-year low of 1.8 per cent against last year's 3.6 per cent. The data factored the second advance estimate of production.

“In kharif, there was legitimate concern as the rains were less. In rabi, I'm not sure the production will be less when the final numbers come out. By my information, wheat output is expected to be better than last year's, as the recent rains have been beneficial,” Ashok Gulati, chairman of the Commission for Agricultural Costs and Prices, told Business Standard.

He said the big problem wasn't a small fall in production but how to manage the still-huge output, as storage capacities are limited.

The data also showed coarse cereals' production in 2012-13 at 38.5 mt, as against 42 mt last year. "The poor monsoon had hit their sowing the most this year. However, the second advance estimates have allayed the concerns to an extent," said Tanushree Majumdar, chief economist at the National Commodity and Derivatives Exchange of India.

She said a good part of the estimates were the data on production of protein-rich food crops such as pulses. Their output is estimated to be better this year, especially that of gram. Production of all pulses this year is estimated to be 17.6 mt, about 0.5 mt more than last year.

Oilseed production is expected at 29.5 mt, marginally less than last year's 29.8 mt. In this, mustard, to be harvested in the next few days, is expected to be 7.4 mt, about 11.5 per cent more than last year.

“Among oilseeds, groundnut remains a concern and unless made up by the rabi crop or compensated by rapeseed and mustard seed, it would be a cause of concern,” said Majumdar.

Among cash crops, production of cotton this year is expected to 33.8 million bales (a bale is 170 kg), about 3.9 per cent less than last year. Sugarcane is expected to be 334.5 mt, around 7.3 per cent less than last year. Jute is pegged at 11.13 million bales (a bale is 180 kg) in 2012-13, down from 11.4 million bales last year.