Govt predicts 3% agri growth in FY 2020-21
India’s farm-sector is poised to grow at least 3% in 2020-21 on the back of robust output and prices, despite the coronavirus pandemic, helping the country escape a potential recession, a top official of the state-run think-tank Niti Aayog said Wednesday.
“In this kind of a situation, will agriculture be the sector to rescue the Indian economy? I will share some projections,” Niti Aayog member Ramesh Chand, flanked by Union agriculture minister Narendra Singh Tomar, said in a webcast.
Chand, a farm economist, said indicators show that “the farm sector will grow at least 3%”. This farm growth will contribute at least “0.5% or a little more” to India’s overall gross domestic product (GDP) growth, he said, helping to stave off a recession. In 2019-20, the farm sector grew 3.7%, according to Central Statistic Office.
Despite these robust projections, the ongoing lockdown, set to run until May 3, has pressured farmers. The announcement of a nationwide curfew caught farmers by surprise on March 24. During its the initial days, labour shortage and shut markets led farmers to dump new harvest, especially perishables items. Of the 2069 nationally important agricultural wholesale markets in the country, less than 500 were functioning during the first weeks of the lockdown. Within agriculture, restrictions have especially hurt the animal husbandry sector, which accounts for 5% of the country’s GDP. Rumours that chicken were a carrier of the novel coronavirus tanked poultry sales. “With restaurants and hotels shut, there has been at least 25% drop in demand for various farm commodities. Many eastern states, such as Bihar and Jharkhand, aren’t allowing ice cream sales. This has caused a surplus of milk, prompting dairies to offer lower prices to dairy farmers,” said Siraj Hussain, a senior visiting fellow at the New Delhi-based Indian Council for Research on International Economic Relations.
Chand’s presentation, however, struck a positive note.
“Many countries are expected to post zero or negative growth. For India also, there are many estimates. But the support from Indian agriculture to the economy is going to be very strong,” Chand said.
The International Monetary Fund earlier this month slashed its 2010-21 growth projection for India to 1.9% from 5.8% estimated in January. Barclays said it saw 0% growth, while the World Bank cut India’s growth forecast to 1.5-2.8% from 6.1% earlier.
Chand said ground-level indicators point to a robust farm sector. A normal monsoon will see a “strong resurgence” of the agriculture sector, aside from encouraging prices and acreage trends.
The India Meteorological Department had forecast a normal June-to-September monsoon, critical for summer crops because 60% of India’s net sown land doesn’t have access to irrigation and nearly half of Indians depend on a farm-based income.
Summer sowing is up 38%, Chand said, while fertiliser “offtake” or sales were 5% higher in April from a year ago. Water levels in the country’s main reservoirs were 40-60% higher than the last 10 years’ average, he said.
“(Wholesale) prices of various commodities are higher than last year and the prices of vegetables are significantly higher,” Chand said.
Tomar said despite a universal lockdown, the agriculture has seen “minimal disruptions” because the government had exempted all farming-related activities.
“I think agriculture would perhaps be the only sector which will contribute to India’s GDP growth in FY21. Therefore, agriculture and food processing should receive high priority from the government,” said Siraj Hussain, a senior visiting fellow at the New Delhi-based Indian Council for Research on International Economic Relations.
According to Hussain, although the Centre had issued orders on 27 March and 30 March to ease restrictions on agriculture and related activities, in “many places the orders were not implemented by district magistrates and the local police”.