Farm sector projected to grow at 5% in Q4

The agricultural and allied sector growth is officially projected at almost five per cent during the fourth quarter of the current financial year and could be revised higher, when the first provisional figures come in May-end.

Though agriculture growth at 4.98 per cent in the fourth quarter was lower than six per cent in the third quarter, it is still among the highest in recent times. During 2016-17, the agriculture and allied activities are expected to grow at 4.4 per cent, according to the recent data released by the Central Statistics Office (CSO)

However, with the final rabi estimates not out yet, the government seems to have adopted a cautious approach in the fourth quarter. A positive base effect, as compared to the negative 2.2 per cent in the third quarter of 2015-16, will also impact the 2016-17 January-March quarter. An uncertain weather during the harvest time might also have added to that. The gross domestic product (GDP) estimates for the third quarter did take into account the initial rabi harvest projections, which projected a bumper crop, but in the absence of the final estimates, the CSO seems to have played it safe.

“In the fourth quarter, even if the sector grows by five per cent, it is not bad, though it might be marginally lower than the third quarter growth of six per cent,” Madan Sabnavis, chief economist at CARE Ratings told Business Standard.

P K Joshi, South-Asia Head of the International Food Policy Research Institute, is more optimistic. He said both the fourth quarter estimates ,and also the final agriculture GDP numbers for 2016-17, are expected to be revised up, as rabi production is looking really good.

“Overall, I feel 2016-17 agricultural production will be over five per cent; higher than the CSO estimate of 4.4 per cent, while for the fourth quarter (January-March), my feeling is that growth will between 5.56.0 per cent,” Joshi said.

“I feel CSO might have been slightly cautious in estimating full-year agriculture GDP growth, as the situation on the ground is good, which will be positive for farmers as well,” Joshi said.

The Centre, in the second advance estimate for agriculture production, projected the 2016-17 (July-June) rabi harvest at 134.47 million tonnes, which includes an all-time high wheat production of 96.64 million tonnes.