Now, winter crop sowing area sees decline, could dent rural economy
Sowing of winter or rabi crops, an indicator of the pace of farm activities, is down by nearly 5% compared to last year, although the gap is sufficiently large in some individual crops, suggesting fresh weaknesses in the rural sector, analysts say.
While all major crops continue to see a decline in their total acreage this winter, there are large gaps in urad or black gram (-9%), coarse cereals or millets (-17.3), groundnut (-28%), safflower (-53%), and sunflower (-29.5%). The acreage of wheat, the main winter staple that is generally stable, is down marginally at -1.5%, official sowing data from the agriculture ministry up to December 21 shows.
India’s agriculture is precariously poised. Overall normal rains last year and higher output have pushed prices further down, stoking farmer protests.
A smaller winter crop could affect other sectors of the economy since steady rural output and incomes are necessary to prop up demand for manufactured goods.
One reason for the lower acreages is that several states have witnessed continuing localised droughts, while poor prices of farm produce, the main reason for the current agrarian distress, may have influenced sowing decisions.
The room left for a catch-up in sowing is small since December-end accounts for more than 90% of total winter sowing.
Analysts from Crisil Ltd said their data suggest sowing has been down by up to 5% in Rajasthan, Haryana, West Bengal, Gujarat, Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu. Some of these states are currently battling a rural distress. The biggest shortfall for coarse cereals is in Maharashtra and Karnataka, while pulses have seen the biggest fall in Maharashtra. Karnataka and Haryana have seen large declines in area under oilseeds.
“Predictably, lower water availability has pulled down rabi acreage in 2018… This is of concern, because the rabi crop accounts for 40% of India’s agricultural produce in both volume and value terms,” said Hetal Gandhi, the director of Crisil Ltd.
While pockets in Karnataka, Maharashtra and Gujarat have been hit by continuing dry spells, the northeast (winter) monsoon has been 49% below normal as on December 12.
The northeast monsoon is critical for Tamil Nadu, Puducherry, Rayalaseema and coastal Andhra Pradesh, and Kerala, said prof K Mani of the Tamil Nadu Agricultural University.
“Distress in the rural economy could impact growth in agri-linked sectors… with the rabi season showing clear signs of weakness, rural India’s contribution has come under a cloud. Unless the sowing situation improves in the next few weeks, there could be a trickle-down effect on the sectors being driven by rural India,” Gandhi said.
A dent in the rural economy affects other sectors because about 54% of the country’s private consumption (of various manufactured items) comes from the hinterlands. For instance, nearly half of all motorcycles are sold in the rural India when rural incomes are steady.
It also has significant political ramifications. Part reason for the Bharatiya Janata Party’s loss in the Hindi heartland states of Rajasthan, Madhya Pradesh and Chhattisgarh that went to the polls recently was agrarian distress.