Farm sector unscathed by 2nd Covid wave
India’s agriculture sector, which employs nearly half the country’s working population, appears to have been unscathed during the second national wave of Covid infections, just as it was during the first outbreak in 2020. The resilience will, in all likelihood, keep the farm growth rate in positive territory, cushioning rural incomes, even as the pandemic weighs on the broader economy, analysts said.
Less stringent lockdowns, better rain, uninterrupted credit flow, and functioning rural supply lines for inputs such as fertilisers, kept farmers going, although rural India saw a surge in infections, several experts said.
The country is projected to produce a record 304 million tonne of foodgrains in 2020-21, 2.66% more than the previous year, according to the third of the four annual projections by the agricultural ministry released this week.
The share of rural districts in total new cases stood at 44.1% for in April 2021, lower than the previous peak of 55.2% in August 2020, according to district-level data on Covid-19 cases analysed by HT.
Although the main kharif or summer-sown season will start in June, with the arrival of the monsoon, official data shows total summer crops sown during April and May stood at 8.46 million hectares, rising 21% over last year’s 6.64 million hectares. The second wave of Covid-19 peaked during these months. April is also the month when farmers successfully harvested rabi crops such as wheat and pulses.
Two years of back-to-back normal monsoon (2019 and 2020) was key reason behind the record farm output. The India Meteorological Department (IMD) on April 16 again forecast normal rainfall during June-September monsoon at 98%. Rainfall between 94 and 106% is considered “normal”, according to IMD’s classification.
Researchers are beginning to study how the sector was holding strong despite the pandemic. “This sowing progress is promising, given that the second wave. This shows that for Indian agriculture, the preponderant variable still are good rains,” said KS Manu, a farm economist formerly with the Tamil Nadu Agricultural University. Nearly 60% of India’s net-sown area depends on rains because of lack of irrigation facilities.
In 2020, when India faced a recession, agriculture was the only sector to post positive growth. It grew 3.4% in the June 2020 quarter, when the overall economy shrunk 24.4%. When all-India growth returned to positive territory in the December 2020 quarter, expanding 0.4%, agriculture grew at 3.9%.
“In states such as Andhra Pradesh, Madhya Pradesh, Punjab and Rajasthan, higher output share of agriculture may cushion the second wave shock,” said DK Joshi, the chief economist of Crisil Ltd, a ratings firm.
Data cited by Joshi shows rural resilience may have also helped the manufacturing sector because about half of India’s manufacturing output comes from rural areas.
“The purchasing managers index for the manufacturing sector has remained above the 50 expansion mark despite recent regional lockdowns and restrictions,” he said.
To be sure, when the pandemic swept into India in 2020, it impacted agriculture marketing and prices, according to a study by Ramakumar, who is Nabard chair professor at Tata Institute of Social Sciences. “Farmers reeled under the impact of labour shortage, as agricultural operations suffered and costs of labour rose,” he wrote in a study published in January in the Review of Agrarian Studies.
However, labour shortage was quickly compensated by a rise in the number of women in the fields, meaning womenfolk in rural households stepped in to mitigate the labour crisis, says Alokesh Khandekar of the Consultative Group on International Agricultural Research, who is currently leading a study on the impact of Covid on agriculture.
Analysts say credit flow, or institutional farm loans, during the pandemic helped insulate the sector. “The government’s stimulus package was mostly credit-led rather than direct cash. The National Bank for Agriculture and Rural Development was allotted additional ₹30,000 crore of emergency capital to provide credit to 30 million small farmers,” said Ravi Prakash Shukla, Khandekar’s co-researcher.
TISS’s Ramakumar, however, found higher market disruptions in 2020, leading to lower produce being sold as compared to 2019, contrary to the government’s figures. Producers of perishables suffered permanent losses, his study states.
A robust monsoon is on the cards, and “agriculture output is therefore expected to be healthy,” Joshi said.
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