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Kharif Output is Expected To Be Healthy.

As last year was a bumper year in terms of acreage and output, the summer crop output is expected to be “healthy”, despite the government estimating a lower kharif production due to uneven distribution of rains.

Crisil report said that, as compared to last year, sowing as of September 29, was lower for foodgrain and oilseeds amd also the projected decline in kharif production is due to a sharp increase in both the sowing area and production of most crops last year.

The government’s first advance estimates suggest kharif production could be 7.7 per cent lower for oilseeds and as much as 2.8 per cent lower on-year for foodgrain.

The flip side to a good monsoon and a bumper crop of last year is that prices for most foodgrain have fallen and consequently reduced farmers’ profits.

The report said that, for pulses and oilseeds, prices fell even below their minimum support prices and cost of cultivation, resulting in a loss on the margins, and for several crops, prices and profit margins have continued to decline in recent months.

Crisil noted, “we estimate that if other states also announce loan waiver schemes the way UP, Maharashtra, Karnataka, and Punjab did, the collective cost to the exchequer would be about Rs 2.5 trillion- or 0.5 per cent of GDP, assuming the waiver gets equally staggered over the next three years.”

“Stocks of rice and pulses with government should buffer this impact,” the report said.


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