Growth in food grain production likely to be lower this year

New Delhi: Growth in food grain production is expected to be much lower this year in the country as less progress has been made in the sowing of summer (kharif) crops than last year, says a Nomura report.

According to the Japanese financial services major, the land area sown has fallen across all other crops: rice, pulses, coarse cereals, oilseeds and jute.

"Overall, with less than three weeks left in the monsoon season (June-September), the current crop sowing progress suggests growth in food grain production will be much lower this year," Nomura said.

The report noted that slow progress on crop sowing means that there could be downside risks to its agriculture GVA growth forecast.

"While there could be offsets such as higher horticulture output, higher yields or higher winter crop output, current evidence suggests there are downside risks to our agriculture GVA growth projection of 3.3 per cent in 2017-18 (year-end March 2018)," Nomura said.

According to the report, the drop in the sowing of summer crops is a result of two factors -- decline in prices and weather conditions. In the case of pulses, oilseeds and jute, the decline crop sowing was a response to low prices, it said adding WPI inflation in pulses, oilseeds and raw jute declined to (-) 33 per cent, (-) 14 per cent and (-) 35 per cent year-on-year respectively, in July 2017.

"Thus there is little incentive for farmers to plant these crops, as realisations are expected to be low a typical cobweb cycle response," the report said. The other major reason for decline in crop sown area is weather related.

"The spatial distribution of rains has been uneven with the Northwest and Southern regions receiving below normal rains, while floods have hurt standing crops in many other states," the report said.