India’s rabi or winter sowing is powering on robustly despite the pandemic as above-normal seasonal rains have set the stage for the rapid planting of key crops, exceeding last year’s levels for this time of the year, official data shows.
The farm sector has emerged relatively unscathed from the pandemic due to higher subsidies and fewer Covid-related curbs even as millions of farmers were on protest against three farm laws, which were eventually repealed by the government on November 30. However, oversupply of labour in the hinterland, triggered by migration of millions of workers back to villages due to the closure of several sources of employment due to the pandemic, and the prices of produce, will still weigh on the farm economy, analysts said.
As on January 10, the total area sown under rabi crops is 65.2 million hectares, against 64.6 million hectares sown during the corresponding period of last year. The total area shows a marginal increase of nearly 600,000 hectares.
“Overall, there has been no impact of the pandemic on farm operations and total acreages are expected to exceed last year’s levels if current sowing trends holds,” said Abhishek Agrawal, an analyst with Comtrade.
Agriculture has chugged on unharmed by successive waves of coronavirus infections. In 2020-21, when India faced a rare recession due to the pandemic, agriculture was the only sector to post positive growth of about 3.1%. This helped keep farm incomes steady. Higher fertiliser subsidies, raised by ₹14,000 crore during the summer-sown season, kept farm growth up.
According to data from the India Meteorological Department, winter rainfall in the country stood at 8.1mm against normal of 2.4mm, which is a departure of (+) 237% during the period from January 1 to January 10.
“These rains have been beneficial for early sowing although they have been damaging for some crops in some southern states,” Agrawal said.
According to official advance estimates of GDP for 2021-22 released this week, the agriculture sector is estimated to grow at 3.9%, higher than the 3.6% expansion recorded in the previous financial year. The targeted growth rate for the farm sector is 4%. Overall, the country’s GDP is estimated to expand to 9.2%, lower than the Reserve Bank of India’s (RBI) December 2021 projection of 9.5%.
The farm sector is crucial to Asia’s third-largest economy because it employs the most people and spurs overall demand. For example, when farm output is strong, nearly half of all consumer goods, such as television sets, are sold in rural areas.
Good harvests help keeping a lid on inflation, but also tend to depress farmers’ incomes in a country where half the population depends on a farm-derived livelihood.
Lower inflation is key to the Reserve Bank’s holding of interest rates steady to boost growth, as the economy battles another Covid wave due to the highly transmissible Omicron variant.
The country’s retail inflation however rose sharply to 5.59% in December 2021 from 4.91% in November, pushed up by rising prices of manufactured items and food, data released by the government showed on Wednesday. Food inflation rose to 4.05% in December from 1.87% in November.
The latest sowing trends show a shift towards oilseeds, a scare commodity, from cereals. Rapeseed and mustard have been sown on 8.9 million hectares compared to 7.2 million hectares sown during the corresponding period last year, up 23%.
In recent months, prices of cooking oil, two-thirds of which is imported, had increased to record levels due to higher international prices.
The higher acreage in oilseeds has resulted in slightly lower acreage under wheat, whose net-sown area stands at 33.3 million hectare against last year’s 33.9 million hectare for this time of the year.
The area under pulses, another key commodity, stood at 15.6 million hectare compared to 15.7 million hectare.
“The farm sector has shown remarkable resilience because of two reasons. One, rural supply lines, especially of agricultural inputs, held steady despite the pandemic. Two, rains were plentiful during the 2021 monsoon,” said DK Joshi, chief economist of Crisil Ltd, a ratings agency.
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