Impact of Foodgrain Output in India

What is the issue?

• India’s foodgrain production in the current kharif season might equal if not surpass last year’s record output.
• This will give strong support to the economic growth in the current financial year besides mitigating inflationary pressure on food items.

What is happening?

• According to data released by the ministry of agriculture, 791 lakh hectares have already been sown, up 3% from last year.
• According to the IMD, the cumulative rainfall received so far across the country has been 104% of the benchmark long period average.
• This well-distributed monsoon rains have indeed helped farming.
• Only a few regions in south India like south interior Karnataka and all of Kerala have reported deficient rains.
• Also, standing oilseed crops in Saurashtra, Kutch and North Gujarat regions were partly destroyed by heavy rains.
• So, there are concerns over these crops, the robust harvest of which is critical to reducing India’s edible oil import bill.
• The cropping area under pulses might shrink this year following a sharp fall in their prices in the last few months.
• Agriculture experts say the good rains together with the hike in the MSP for pulses may have motivated farmers to sow more.
• Higher acreage means food inflation would remain in check, giving the RBI sufficient assurance when it decides to cut policy rates later this year.
• If the prices do not recover sufficiently, owing to agri-marketing stress, it could dent farm incomes.
• It will not only add to more demands for loan waivers but also depress rural consumption.

Source: The Indian Express