India is set to post its highest ever food output with a likely production of 263.2 million tonne of food grain this year, agriculture minister Sharad Pawar has said.
The figure is about 4 million tonnes higher than the previous record of 259 million tonnes two years ago.
Nearly two-thirds of Indians depend on farm income.
The higher output could cool prices and boost rural earnings, with the farm sector growing at a robust 6%, two percentage points higher than the official target of 4%. Together, these trends represent a good bet for the government to fix the economy, its biggest worry, analysts say.
Food prices were higher by 13.68% in December 2013 as compared to the same period a year ago, down from a rise of 19.95% in November 2013.
A fall in food prices could come as a major respite for households as they form the largest chunk of monthly expenditure and affect the poor most. Vegetable prices have also fallen after the recent spike in onion prices, government data says.
The record harvest comes on the back of four consecutive normal monsoons and higher crop prices offered by the government in the form of minimum support prices.
Cropping patterns show farmers in many regions shifted to cash crops for higher income, signalling aspirational goals in the rural hinterland. Currently, rural consumers account for nearly half of all television sales, according to a Citibank analysis.
“If farms are happy (sic), then the biggest chunk of India will be happy,” said Rajiv Ahuja of Comtrade, a commodity market analyst.