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    India sees deficient rainfall; experts assess impact on agri output

    economy | IST

    India sees deficient rainfall; experts assess impact on agri output

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    Rainfall has been below normal this year. The all-India deficiency is 9 percent but that is only on an average basis. States like Gujarat, Rajasthan, Punjab, Kerala, and Odisha have been classified as deficient in the range of 29 percent to 59 percent. Will agricultural output be lower? Will rural demand be hurt? Sachchidanand Shukla, chief economist of Mahindra Group, and R Nagaraj, visiting professor at Centre for Development Studies, Trivandrum, discussed this further.

    Rainfall has been below normal this year. The all-India deficiency is 9 percent but that is only on an average basis. States like Gujarat, Rajasthan, Punjab, Kerala, and Odisha have been classified as deficient in the range of 29 percent to 59 percent. Even more worrying is that the monsoon is weakening in the month of August, which is a very crucial month in terms of water requirement for the crops. According to the India Meteorological Department (IMD), for Gujarat and Jammu and Kashmir (J&K), the deficiency is almost 100 percent while for states like Kerala, Rajasthan, Punjab, Haryana, West UP, Chattishgarh, MP, Odisha, the deficiency ranges from minus 30 percent to minus 60 percent. A lot of these states have special significance in terms of agricultural output and what is worrisome is the impact on the crops due to deficient rainfall.
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    As per CRISIL, deficiency of rainfall in Gujarat is about 47 percent and the state accounts for 4.6 percent of the crops; and the important crops are oilseeds and cotton. The other important state is Odisha, very serious at 31 percent but it accounts for only 2.8 percent and the crop is sunflower. Finally, Punjab, the deficiency is at 20 percent, it is a big cropping area and the crop impacted is rice.
    In terms of reservoir levels that will affect rabi crop, in the north, the deficiency is serious, 47 percent compared to the ten-year average of 72 percent. Overall impact – CRISIL says there are some positives and some negatives. Positives – current year’s sowing may be lower than last year’s but it is much higher than the five-year average, especially for important crops like pulses and oilseeds. Sowing is very good, the government has lowered the import duty on oilseeds, and so even if there is deficiency in Gujarat, it is getting compensated.
    Rabi is a little too early to worry – 10 states have reservoir levels below their 10-year average and they account for about 46 percent of the total crop area.
    Will agricultural output be lower? Will rural demand be hurt? Sachchidanand Shukla, chief economist of Mahindra Group, and R Nagaraj, visiting professor at Centre for Development Studies, Trivandrum, discussed this further.
    “When we put everything together, we don’t see any cause for pressing the panic button or any cause for alarm but certainly we need to be cautious,” said Shukla.
    “One thing which is very important is that the averages hide a lot of details that one needs to look at. The recovery or the growth part is uneven and it is accentuating the K-shape recovery we are seeing in the other parts of the economy,” he added.
    “We think that the gross domestic product (GDP) growth in agriculture is going to be around 3 percent on an average but it will hide more than it will reveal. There are significant regional and state level variations. From a food grain output perspective and agriculture-GDP perspective, we don’t see too much of a problem at the aggregate level. So far, we do believe that the rest of the year will remain normal,” Shukla mentioned.
    “I do worry about agricultural output. As per the Skymet’s report, there is a 60 percent chance of below normal rainfall. Though, IMD has predicated on August 11 that rainfall will be normal but it will be highly uneven as far as distribution is concerned. Going by the kharif sowing season – it is a good indicator of the output which is expected – it is less as of August 11 by 1-2 percentage points across the country,” said Nagaraj.
    For the entire discussion, watch the accompanying video.
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