Agriculture growth slips to 4.5% on higher base

Agricultural growth in the January to March quarter of 2017-18 dipped, largely because of a high base, to 4.5 per cent as compared to 7.1 per cent in the same period last year.

Though the 4.5 per cent growth in agriculture and allied activities was the highest in the year, it wasn’t good enough to lift overall farm sector growth above 4 per cent in 2017-18.

In 2017-18, growth in agriculture and allied activities was estimated at 3.4 per cent as against 6.3 per cent clocked in 2016-17.

Experts say if the monsoon remains normal in 2018 too, India might see 4 per cent growth in agriculture and allied activities.

“The third advance estimates of foodgrain production were 279.51 million tonnes in 2017-18, higher than the second advance estimates of 277.49 million tonnes and the final estimates of 275.11 million tonnes during the agricultural year 2016-17,” an official statement said.

Meanwhile, the data showed at current prices, gross value added (GVA) in agriculture and allied activities in 2017-18 was estimated at 4.5 per cent, down from the 11.6 per cent recorded during 2016-17.

The sharp fall in GVA reflects the impact of inflation on farm goods. The inflation rate has fallen since 2014-15 owing to low farm-gate prices of oilseeds, pulses and cotton.

Falling farm-gate prices have been one of major challenges for the Central government in the last four years. Despite a bumper harvest, farmers haven’t been able to benefit from them.

The drop in prices of major oilseeds, pulses, and cash and horticulture crops has fuelled farmers’ agitation in several parts of the country in 2017.

Foodgrains production jumped owing to a largely normal monsoon in 2017.

The southwest monsoon in 2017 was 95 per cent of the Long Period Average (LPA), which was slightly below normal. Though the rains were deficient in around 20 per cent of the landmass, it was largely normal in a majority of the areas.

“The slump in quarter-four GVA numbers and also the full year figure for agriculture and allied activities are mainly due to a base effect. Despite that growth in agriculture in the range of 34 per cent is good,” said Madan Sabnavis, chief economist, CARE Ratings.