Rural economy: Record sowing points to good harvest

NEW DELHI: Plentiful rains and a rural stimulus have led to frenzied planting of kharif, or summer-sown crops, this year, as acreages of four key crops surpassed their five-year averages for this time of the year, a welcome record amid the county’s economic crisis. If this results in a bountiful harvest (as it is expected to), the result could be a boost for the rural economy -and more demand for everything from consumer products to mobile phones to motorcycles.

Buoyed by robust showers from May onwards, farmers sprinted into action, planting crops in 58.6 million hectares until July 12, compared to 40.2 million hectare last year, a 45% jump, according to data from the farm ministry. In all, the respective areas under pulses, coarse cereals, oilseeds, and cotton are currently the highest in five years pointing to a bumper harvest. The five-year average represents the normal sowing area.

A good monsoon is critical because 60% of the country’s farmlands don’t have access to irrigation and almost half of all Indians depend on a farm-based livelihood. And a good harvest keeps prices low and stokes demand for manufactured items, spurring factory output.

The monsoon has been either “normal” or “excess” in 26 states, according to the India Meteorological Department. Countrywide, the rains have been surplus by 14%. One hundred and twenty-one nationally monitored reservoirs -- critical for power, drinking and irrigation -- currently have twice as much water as last year (171 billion cubic metres on July 9), official data showed.

Better farm output will cushion the impact of a widely expected recession, as the Covid-19 pandemic roils economic activity. The World Bank on June 8 forecast India’s economy will shrink 3.2% in 2020-21. The farm sector, by contrast, is poised to grow 3%, government think-tank Niti Aayog said in April. Farmers have sown paddy on 12 million hectares, up 25% from last year. The area under cotton stands at 10.4 million hectares, compared to last year’s 7.7 million. Oilseeds are at 13.9 million hectares, against 7.5 million last year. Pulses acreage is at a record 6.4 million hectares, sharply higher than 2.4 million hectares in 2019. One hectare equals 2.5 acre.

“Farmers were able to sow crops faster this year due to good pre-monsoon showers ; the fact that the rural economy was kept outside the [Covid-19] lockdown helped. Farm incomes are critical for revival of consumption demand,” said KS Mani, an economist with the Tamil Nadu Agricultural University.

In June, 4.2 million farmers received about ~73,500 crore in cash, from prices the government paid for crops. Fertilizer sales were 73% higher year-onyear in May.

In April, nearly 80 million farmers also received a fresh instalment of ~2,000 each as cash transfer under the PM KISAN programme, totalling ~17,000 crore.