With the agricultural sector growing 4.5% in the first quarter of fiscal 22 and a record food grain production of 150.5 million tonnes (mt) during the kharif season, the hard work of farmers, the skill scientists and near normal monsoons have yielded positive results Back
How important is the production of food grains?
Agriculture and related activities in FY21 contributed 20.2% to India’s GVA. The production of food grains being the main source of livelihood for nearly 55% of the population, also contributes to the supply base of agro-industries such as cotton, sugar, vegetable oil, tea, etc. . It provides market support to agro-dependent industries such as fertilizers, tractors etc. India is among the top 15 exporters of agricultural products in the world. The agricultural sector helps create jobs, leads to poverty alleviation and reduction of inequalities by providing income and livelihoods.
How was the release of the kharif this time?
India’s agricultural sector posted robust growth of 3.4% in FY21 and 4.5% in Q1FY22, and exports of agricultural and related products increased by 21.8% in April-August . With a target of 307.3 tonnes of food grain production for FY22, the first anticipated production estimates for major Kharif crops for FY22 show a record food grain production of 150.5 tonnes, or 7 , 8 tonnes more than the average production of food grains over the past five years (fiscal year 17- FY21). The production of kharif rice in FY22 was 9.21 tonnes higher than in the previous five years. Rice exports grew by 13.7%, while processed food products grew by 41.9% in April-August.
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What are the main reasons for the increase in production?
A near-normal monsoon, irrigation, aggressive implementation of MGNREGA, availability of crop insurance, uninterrupted supply of fertilizer and efficient sowing activities are some of the main reasons. While June-August saw a deviation (-9.22%) from normal precipitation, the forecast is that September will be above 110% of the long-term average of 170mm.
What do the latest estimates show?
A resurgent rural economy will help isolate the Indian economy and put the country back on the path to economic recovery. Improved rural prospects will stimulate consumer demand for consumer goods, light motor vehicles, telecommunications products, etc. Increased income in the hands of the rural population will lead to increased consumption, leading to increased production levels and higher capacity utilization. In terms of inflation, increased production of food grains will help reduce consumer price inflation.
Can the consolidation of the rural economy take place?
The consolidation of the rural economy can be achieved through structural reforms, especially without hesitation on the implementation of agricultural reform laws. Strengthening of rural supply chains such as cold chains and refrigerated transport, construction of storage facilities, promotion of agro-industries such as food processing industries, etc. will help build momentum, leading to increased investment and production.
Jagadish Shettigar and Pooja Misra are faculty members of BIMTECH.
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