Farm growth in Sept quarter muted at 1.7 % on high base, kharif fall

December 01
02:49 2017

Agriculture and allied activities grew at a slower pace in the second quarter of 2017-18 as compared to the same period last year, and also sequentially, due to the impact of a high base and drop in kharif grain production.

Some experts said July-September or Q2 was anyway a lean period for farming, coming between two harvests.

The fall puts into question the hope of agriculture seeing four-plus per cent growth in 2017-18. It’s also a reversal of the trend from the first quarter, when agricultural Gross Domestic Product (GDP) at constant prices was higher than that in current prices, pointing to adverse terms of trade.

Farm sector growth in 2017-18, many experts felt, would be 2.5-3 per cent.

The data showed that in the second quarter, agricultural GDP at constant prices grew 1.7 per cent; in current prices it rose 3.7 per cent. Sequentially, at constant prices, agriculture and allied activities have grown by 1.7 per cent as against 2.3 per cent in the first quarter (April to June) of 2017-18.

It was officially stated that production of foodgrain during the kharif season declined by 2.8 per cent, as compared to growth of 10.7 per cent during the same period in 2016-17.

Around 52.5 percent of Gross Value Added in the sector is based on livestock products, forestry and fisheries, which saw combined growth of 3.8 per cent in Q2. In Q1, the growth was 3.4 per cent.

Foodgrain production in the 2017-18 kharif is expected to be 134.67 million tonnes. This is 2.8 per cent less than the fourth estimate of last year but only 0.3 per cent less than the first estimate of 2016-17.

The total output dropped because of uneven rain in some parts and a shift in acreage in a few crops, particularly soybean, pulses and coarse cereals. A clearer picture is expected in the second and third estimates.

The 2017 southwest monsoon season ended with an overall shortfall of five per cent from the normal. In meteorological terms, ‘below normal’ at 95 per cent of the Long Period Average (LPA) as against the India Meteorological Department (IMD) forecast earlier of normalcy at 98 per cent of the LPA, with a model error of plus or minus four per cent. IMD’s forecast went slightly wrong as the monsoon went for an extended break in August, after being fairly normal before that.

Ashok Gulati, agriculture expert and Infosys Chair professor for agriculture at the Indian Council for Research on International Economic Relations, said the drop in was largely due to the high base of last year. “But, overall growth in agri GDP is going to be around two per cent, perhaps the lowest since reforms started. This worries me because expectations have been raised towards doubling the income of farmers but reality is turning out to be worse than the UPA period (earlier government) performance,” he said.

He estimated full-year agriculture growth in 2017-18 at 2.5 per cent.

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