The story behind India’s bumper crop year
On the back of a normal monsoon, production of foodgrains rose 8.7% y-o-y to cross 273 mn tonnes in 2016-17, surpassing the past record of 265 mn tonnes in 2013-14
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New Delhi: The year that went by marks a significant turnaround in India’s foodgrain economy. On the back of a normal monsoon, production of foodgrains rose 8.7% year-on-year to cross 273 million tonnes in 2016-17, surpassing the past record of 265 million tonnes (in 2013-14).
The latest estimates by the agriculture ministry released this week also shows that production of major crops like rice, wheat and pulses breached historical highs.
How did Indian farmers manage this feat? While normal rains in 2016 played a significant role aiding the rebound in production after consecutive years of drought (in 2014 and 2015), it is not the only reason.
Higher prices of crops like pulses and wheat in the previous years led to higher plantings. Farmers planted a record area under pulses in 2016-17 responding to price signals from the previous year when arhar (pigeon pea) prices touched Rs200 per kg in retail stores.
Higher prices of wheat and favourable moisture levels in late 2016 also pushed farmers to plant more area under wheat which touched a record 31.8 million hectares. The estimated production of 97.4 million tonnes imply that wheat yields are at record levels, surpassing 3 tonnes per hectare for the entire country.
On the flip side, a 37% year-on-year rise in pulses output—from 16.4 million tonnes in 2015-16 to 22.4 million tonnes in 2016-17—also led to wholesale prices dipping below government-announced minimum support prices for varieties like arhar and moong, affecting farm incomes.
The bumper crop year also had a silver lining. The fact that record production could be achieved despite an acute drought in nearly all of southern India, particularly Tamil Nadu and Karnataka, points to the increasing resilience of field crops to sub-par rains at a regional level.
Further, the robust production numbers shows that farmers managed well to plant and apply inputs like fertilisers and pesticides for their winter crops, despite the cash crunch following demonetisation of high-value currency in November last year.
Agriculture growth rate is estimated to revive to a high of 4.4% in 2016-17, after a dismal 0.8% growth in 2015-16 and a 0.3% contraction the year before. The challenge, however, is to maintain the growth momentum. More so, as the Centre is aiming to double real farm incomes by 2022.
So, again all eyes are on the June to September south-west monsoon this year. Will rains be normal and well distributed as predicted by the official forecaster? Will farmers cut area under pulses after the dip in wholesale prices?
The answers will trickle in as planting begins next month with the onset of monsoon.