Agri output hits new high in 2014; repeat performance unlikely

Living up to its traditional image of being a land of farmers, India has achieved a record production for a number of crops including wheat, rice, pulses and cotton in 2014, but agriculture sector may not be able to repeat this performance in new year due to poor monsoon.

While output may fall for foodgrains and some other crops, there are also fears that prices of farm items could decline in 2015 on global cues and affect farmers' income.

Agri-experts feel that government may have to regularly intervene during next year for protecting farmers' interest as it has recently done by raising the import duties on both crude and refined edible oils by 5% each.

As far as 2014 is concerned, it was a mixed year for the agriculture sector, on which more than 50% of the population is dependent although it contributes only 14% to the country's GDP.

While the first half of the year brought cheers with an all-time high foodgrains production at over 264 million tonnes and record output of cotton and sugarcane, the second half saw drought-like situation in some parts of the country, posing a big challenge for the new government.

Food prices were high in the first half of 2014, but it cooled thereafter, so much so that food inflation came down to 0.63% in November from nearly 9% in January.

Immediately after taking charge in late May, the Centre swung into action and announced several measures to tackle the drought-like-situation and contain price rise in vegetable items including the politically-sensitive onions.

Contingency plans were prepared well-in-advance for 500-odd districts and effectively implemented, while diesel subsidy was announced to help farmers save standing crops.

On price-front, minimum export price was imposed on onions and potatoes to boost domestic supply and States were asked to take stern action against hoarder.

That apart, government in this year's budget, presented in July, announced various programmes with an outlay of about Rs 7,500 crore to improve irrigation, soil health and research activities besides raising farm credit disbursement target to Rs 8,00,000 crore for this fiscal.

Although monsoon was not as bad as initially feared, still the Agriculture Ministry projected a drop of almost 9 million tonnes in Kharif foodgrains production while sowing areas of rabi crops fell compared with the last year.

On crop outlook, Agriculture Commissioner J S Sandhu said: "Looking at the acreage so far, there is less probability of achieving foodgrains production of 2013-14 record level."

Noted farm economist Ashok Gulati said: "We cannot go to the previous peaks. But agriculture is not about foodgrains alone. I am not worried about foodgrains as we have so much stock that we don't know where to keep."

He noted that falling commodity prices is a big challenge and the government needs to think how best farmers can be compensated.