Kharif crop to fall 15-10%, rural economy to lose steam by 20-25%: Ficci

Drought will lead to a 15-20 per cent decline in kharif crop this year which will result a loss of more than 16 million tonnes in foodgrain output. The Federation of Indian Chambers of Commerce and Industry (Ficci), an industry body, said in a research paper that such a decline could affect the government stock and hinder the public distribution system (PDS) for foodgrains.

Ficci suggests a four-pronged strategy to make the agricultural economy less dependent on monsoons by bringing more area under irrigation, set up advanced forecasting system, enhancing research and development and farm mechanisation.

The paper stated that in Punjab and Haryana, 20-30 per cent area has been shifted to late-sown basmati rice which cannot be procured for PDS which will affect the rice available for the central pool. According to USDA, India’s rice output is expected to fall sharply to 82 million tonnes (mt) in the 2009-10 against the early forecast of 88 mt. This is 17 mt below the record production of 99.2 mt in 2008-09. However, acreage of cotton and pulses is expected to increase marginally.

Moreover, given the shortage of water levels in the reservoirs, rabi output is also likely to be affected by about 5 per cent in terms of the volume of agricultural production. The storage capacity as a percentage of the live capacity of 81 of India’s biggest reservoir is at 57 per cent, which is less than the last 10 year’ average of 64 per cent, Ficci said in a statement. Last year, it was 69 per cent.

The government had earlier said that wheat production in 2009-10 would be 79 mt, marginally lower than the record production of 80.58 mt. Wheat constitutes 72 per cent of India’s foodgrain output.