Farm sector growth dips marginally

In 2013-14, foodgrain production was estimated at a record 264.77 mn tonnes, around 3% more than the previous year

India’s farm sector growth in the first quarter of 2014-15 stood at 3.8 per cent, marginally lower than the four per cent during the corresponding period last year, mainly due to a base effect and slight slowing in the non-crop segment.

However, experts said agriculture growth might further falter in the subsequent quarters, as the southwest monsoon has not been satisfactory.

A GDP (gross domestic product) growth of 3.8 per cent in the April-June quarter was also on account of a bumper harvest of rice, wheat, oilseeds, coarse cereals and pulses in 2013-14, on the back of a good monsoon in 2013.

“I feel even if the agriculture GDP has grown by 3.8 per cent in the first quarter of 2014-15, though lower than four per cent during the same period in 2013-14, it is credible. This is because it shows that despite a high base of 2013-14 (when agriculture GDP grew by 4.7 per cent), the growth has not shown much sign of slackness,” said Ramesh Chand, director of the National Centre For Agricultural Economics and Policy Research (NCAP).

He said not much should be read into the first quarter numbers, as it is based on 2013-14 crop production data, a year when the monsoon was high.

In 2013-14, foodgrain production was estimated at a record 264.77 million tonnes, around three per cent more than the previous year.

“The same high production might not be maintained as kharif foodgrain output could drop by three-five million tonnes,” a senior government official said. Chand of NCAP said agriculture GDP in the second quarter of 2014-15 might even drop to less than two per cent.

The southwest monsoon in 2014 was 18 per cent less than normal till Thursday.

The India Meteorological Department (IMD), in its latest forecast, had scaled down its projections for the monsoon season to 87 per cent of the long period average (LPA), as against its June forecast of 93 per cent of LPA, due to poor rains in the first 45 days of the four-month season.

Both forecasts mean below-normal rain and come with a model error of plus or minus four per cent.

The Met office said the worst rainfall this year, bordering on drought, is expected in northwest India, comprising major foodgrain growing states of Punjab, Haryana, Uttar Pradesh and Rajasthan.

It said rainfall in northwest India is expected to be only 76 per cent of the LPA.

It classifies any rain shortage over 25 per cent of the LPA as drought. The forecast showed that monsoon deficit in northwest India is expected to be 24 per cent less than normal.