India’s farm sector is expected to recoup some of the losses it suffered in the October-December quarter on the back of expected jump in wheat output and rise in production of horticulture products. However, it would be a very mild recovery, close to even flat output.
According to the new GDP data, which is based on 2011-12 series, agriculture growth, which also includes forestry and fishing, is expected to be around 1.1% in 2014-15, down from 3.7% in 2013-14.
In the third quarter of 2014-15, agriculture production contracted by 0.4% as against 3.8% growth in the corresponding period of the previous year. However, in the January to March quarter of 2014-15, the latest data showed that there is slight uptick in growth to 0.37%.
“This is very marginal rise and might be due to the impact of expected good wheat production,” D K Joshi, chief economist CRISIL told Business Standard.
An increase in vegetable and fruit production in 2014-15 is also expected to have a positive impact on Q4 numbers.
Wheat output in 2015 is expected to be around 100 million tonne on the back of benign weather despite a small drop in acreage. Production in 2013-14 was estimated to be around 96 million tonne.
Head of Karnal-based Directorate of wheat research recently told Business Standard that output might be around 100 million tonne, if weather remains favourable in the months of February and March. The light rains are expected to help matters.
In the case of vegetable and fruits, production is expected to be around 280 million tonne this year, as against 269 million tonne, which effectively means that it would surpass India’s total foodgrains production for the third year in succession.
However, despite that marginal improvement in Q4, overall growth in agriculture and allied sector is estimated to be around 2.6 percentage points less than the 2013-14, as kharif foodgrains, oilseeds and cotton output is estimated to be less as per government’s first advanced estimate.
Foodgrains production in 2014-15 (June to July) is expected to be around 120.27 million tonne, around 9 million tonne less than last year, while that of oilseeds is expected to be around 19.66 million tonne, around 2.74 million tonne less than last year.
| Growth in Agriculture and Allied Activities | ||||
|
Year
| Q1 | Q2 | Q3 | Q4 |
| 2014-15 | 3.5 | 2 | -0.4 | 0.37 |
| 2013-14 | 2.7 | 3.6 | 3.8 | 4.36 |
| Source: MOSPI | ||||
Cotton output this year is also expected to be around 34.62 million bales, down from 36.59 million bales last year. (1 bale = 170 kilograms).
On top of this, the production scenario is not expected to improve by much for crops other than wheat in the rabi season as well because of drop in acreage.
Acreage of all rabi crops is expected to be around 3-4 million tonne less than last year's over 60 million hectares. The main reason for the fall has been less than expected sowing of rabi pulses and mustard seed, the main oilseed grown during the rabi season.
“Though actual fall in production might not be much significant, but when its value addition is taken as is the case with current GDP, the fall is big,” another analyst said.
