IAS Gyan

Daily News Analysis

Explained: In farm promise, some concerns

3rd August, 2020 Economy


  • To say agriculture is roaring may be an exaggeration, but it is definitely one sector where things are closest to business-as-usual in today’s Covid-ravaged Indian economy.
  • Farmers have in the current kharif (monsoon) season so far planted 13.9% more area compared to last year’s coverage at this time. Moreover, acreages are higher in all major crops, barring jute.
  • The increased plantings have been largely due to a normal southwest monsoon, with the all-India area-weighted rainfall during June-July, at 453.3 mm, marginally above the long-period average of 452.2 mm for these two months.
  • A second indicator of agricultural operations going on unhindered is sale of fertilisers to farmers. July marked the ninth consecutive month of it registering double-digit growth.


Sources of uncertainty


The first one is from the monsoon itself.

  • The country received 17.6% above-normal rains in June. However, July reported a 9.9% deficit, with this widening to 19.2% in the second half of the month.
  • The India Meteorological Department has forecast rainfall during August-September to be 104% of long-period average with a model error of ± 8%.
  • The prediction assumes “neutral” ENSO (El Nino) and Indian Ocean Dipole conditions continuing during the remaining part of the monsoon season.


The second threat is from desert locusts.

  • The UN Food and Agriculture Organization have warned that the breeding of these insects is under way along both sides of the Indo-Pakistan border.
  • The problem would arise when the immature winged adults resulting from this breeding form swarms that can feed on the growing kharif crop.


The final pressure point is from milk, India’s largest “crop” both by volume and value.

  • As a crop that is harvested and sold daily, it is a source of supplementary income as well as liquidity for most farmers.
  • The crash in milk prices by Rs 10 per liter or more since the March 25 lockdown will certainly impact rural incomes.
  • Out of the country’s estimated 50 crores liters of daily production, 12-12.5 crores liters is handled by organised cooperative and private sector dairies. A Rs 10/liter price fall even on this means an income loss of Rs 120-125 crores per day.
  • The losses could mount with the start of buffalo calvings and milk production rising in the natural course as temperatures dip along with improved fodder availability.