’Farm output to grow at least 3% despite lower rice harvest’

Growth rate of agriculture in Punjab now is less than 2% while it is 8% in Madhya Pradesh and it is more than 5% in Andhra, says Ramesh Chand, Member, NITI Aayog

Gireesh Chandra Prasad
Updated21 Sep 2022
NITI Aayog member Ramesh Chand.
NITI Aayog member Ramesh Chand.

Rainfall deficit in the North-east could lead to lower production of rice, while erratic monsoons elsewhere could impact some vegetables. However, overall growth in agriculture output in FY23 is expected to come in at 3% or more, compensated by other crops and shoring up rural consumption, NITI Aayog member Ramesh Chand said. Farm output accounts for about 20% of the economy. Edited excerpts from an interview.

Policy makers are banking on the monsoon for relief in inflation. What’s the trend?

This year monsoon has seen a different type of aberration. If you look at the total quantity of rainfall, it is more than the long-time average. That will give the impression that it is all well. But there are three dimensions of monsoon, all of which are very important. One is the total quantity of the rainfall. Second is the date of arrival. If monsoon comes too late, even if the total quantity is normal or more than normal, it can have an adverse impact. The third is its distribution over the monsoon period and across country. This year, the across-the-country distribution has been very erratic. In eastern India, which is expected to receive more rain than the rest of the country, received very little rainfall this time. A small deficiency in eastern India is desirable because even during normal rainfall, floods occur. But this year, the deficiency exceeds 60%—that is the kind of situation. That is the area, which is the rice bowl of India. That is the area naturally suited for rice cultivation—we grow rice in Andhra Pradesh, Telangana, Punjab and Haryana mainly with irrigation. 

Secondly, vegetables are very sensitive to prolonged shortage and also to excess rainfall. We have seen both this time. Therefore, though the overall picture of rainfall seems as if we have normal rainfall, these two dimensions, especially the spatial distribution has been very erratic this time. Because of that, I expect at least on rice, adverse effect. The total rice production this year will be lower than last year. The extent of reduction will depend on a lot of factors. The estimate is about 6-10 million tonnes less this year than last year’s 130 million tonnes. In the case of potato and onion, inflation is softening, but in the case of tomato, we find that prices are still quite high. Generally, inflation in vegetables captures these three crops which are treated as representative vegetables.

Will these concerns impact rural consumption?

I do not see any setback to overall growth of the agriculture sector. As we have seen reduction in area in some crops, we are also seeing increase in area in other crops and yield in some states may be better also. As far as overall growth of agriculture is concerned—crops account for only slightly more than half of agriculture and allied activities with the rest comprising livestock and fishery. These are big sectors and they are normally not affected by monsoon the way crops are. As of now, I do not have any indication to say that agriculture growth will go below 3%. If we have some news on rice, then there is some positive news on cotton. Overall agriculture growth story is intact.

NITI Aayog has stated that crop diversification is a key focus area. What are the key goals?

Crop diversification involves many things. One is that, we want to diversify agriculture to increase the income of farmers. The kind of crops we have in mind are high value crops. Three or four states which have higher productivity than Punjab are seeing agriculture growing at a higher rate than in Punjab because they have diversified to high value crops. The growth rate of agriculture in Punjab now is less than 2% while it is 8% in Madhya Pradesh and it is more than 5% in Andhra Pradesh. The second dimension is nutrition. For a more balanced diet, besides vegetables and livestock products, there should be more protein—legumes and pulses and millets. 

Is high use of groundwater for rice and sugarcane a matter of concern?

It is a serious concern. That is why NITI Aayog has emphasized that you should move to agro-climatic regional planning. The choice of crop in a particular region should fit with its natural resource endowments. In areas which are water deficit, which get less rainfall, we should discourage rice and sugarcane. We have huge surplus production in these commodities. Our domestic demand for rice is about 110 million tonne. Last year we produced 130 million tonnes. In the case of sugarcane also, we have a surplus of 5-7 million tonnes. That is also the reason we are not able to dispose of the entire production of sugarcane and we are now diverting part of sugarcane juice for ethanol production.

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