Surinder Sud: Underestimating farm growth

FARM VIEW

Many have viewed the Central Statistical Organisation's (CSO's) projection of a positive 1.1 per cent growth in agriculture, forestry and the fisheries sector in 2004-05 with a degree of disbelief. But it need not be so for several reasons.

In fact, in all probability, this figure may be revised upwards if the current optimism among agronomists about a bumper rabi holds true.

Indeed, the scepticism about the agriculture sector growth numbers is rooted in deficient monsoon rainfall, which was interpreted as one of the worst droughts. But that was not the case.

Besides, the composition of the agriculture sector, too, has changed substantially and the loss in crop output alone cannot turn the overall growth numbers for the sector as a whole negative.

Now that precise information on the extent and distribution of rainfall is available, it is clear that the 2004 drought was neither the century's worst nor the most widespread, as was projected by the media. In fact, the 2002 drought was more severe and extensive and could, perhaps, qualify to be described as the worst in several decades.

In the 2004 monsoon, only about 18 per cent of the country faced rainfall paucity, against nearly one-third of the total area being in a similar situation in 2002. Besides, in 2004, the deficiency was confined largely to Rajasthan (western Rajasthan, in particular), parts of Maharashtra and Madhya Pradesh, and pockets in Andhra Pradesh and Tamil Nadu.

Though a part of the north-eastern region and Kerala also experienced low rainfall, it did not matter much because of their insubstantial contribution to the overall agricultural harvest. Of course, Punjab, Haryana and western Uttar Pradesh also faced poor monsoon, but then most of the land there is irrigated.

However, there is one similarity between the 2002 and 2004 rainfall patterns. The break in monsoon was most pronounced in July, the most crucial period for kharif crop sowing. However, here too the paucity was less in 2004 (minus 19 per cent) than in 2002 (minus 49 per cent).

Indeed, there have been some other factors that made the two droughts different in their overall impact. For one thing, the 2002 drought was preceded by three years of below-100 per cent monsoon rainfall. The total seasonal rainfall was 96 per cent in 1999, and 92 per cent each in 2000 and 2001.

In 2002, it turned out to be only 81 per cent, or 19 per cent below normal. On the other hand, 2004 was preceded by a year when the seasonal monsoon rainfall was 102 per cent of normal.

Moreover, there was excessive rainfall in most parts of the country around mid-June, blunting to some extent, the effect of a dry July. The 2004 season ended with a rainfall deficiency of a mere 13 per cent.

As a result, while the output of foodgrains, oilseeds and sugarcane dropped, that of crops that need less water "" like cotton and pulses "" rose sharply. In fact, cotton harvest was up by nearly 25 per cent.

Moreover, the break in the monsoon usually impacts the dryland crops the most and not so much those grown on irrigated fields. These dryland crops also have relatively low value and so don't affect GDP calculations as much.

This aside, the proportion of crop output in the agriculture GDP is gradually declining, thanks to a faster growth of sectors like livestock and fisheries. The livestock output now constitutes nearly one-fourth of the agricultural GDP and from fisheries around 18 to 20 per cent.

In fact, the farm sector growth data also includes forestry and the estimated output of the household backyards, which is not that dependent on monsoons.

No doubt that the livestock sector is vulnerable to the monsoon wrath but only if the break in the rainfall persists for a period long enough to dry up vegetation and pasture lands. Fortunately, this did not happen in 2004, except in western Rajasthan and some other pockets where the dry spell continued beyond July as well, resulting in fodder shortage.

Furthermore, the post-July revival of the monsoon and a good spell of rainfall towards the end of the monsoon season proved to be a boon for the kharif crops, which had managed to withstand the earlier dry spell.

What is even more significant is that it left some moisture in the soil to facilitate rabi crop planting as well. No wonder the output of rabi is anticipated to be appreciably higher than that of kharif this year.

In fact, the output of wheat, the major rabi crop, may turn out to be higher than the projected 73 million tonnes. In that case, the agricultural growth numbers may have to be revised upwards subsequently.