Agricultural sector growth slows down to 3%, show new estimates

Agricultural sector growth slows down to 3%, show new estimates


The Central Statistics Office (CSO) has recently made an upward revision to the growth to be experienced by the agrarian economy in the present crop year (viz. from July, 2017 to June, 2018). The growth in real Gross Value Added (GVA) by the agrarian sector as a whole is expected to be 3.0 percent in 2017-18 as per the second advance estimates of national income for 2017-18, which was released by the Ministry of Statistics & Programme Implementation (MoSPI) on 28th February, 2018.

The first advance estimates of national income for 2017-18 (released on 5th January, 2018), however, had predicted that the real GVA by the agrarian sector is likely to increase by 2.1 percent. It must be noted that GVA is the difference between GDP and net indirect taxes.  

As compared to other sectors of the economy, the growth to be experienced by ‘agriculture, forestry and fishing’ sector is likely to be the slowest in the present crop year (excluding ‘mining & quarrying’ sector), as per the recent estimates. Please consult chart-1 for details.

Chart 1 Growth of Agricultural GVA
 
Source: Press Note on Second Advance Estimates of National Income 2017-18 and Quarterly Estimates of GDP for the 3rd Quarter (Q3) of 2017-18, released on 28 February, 2018, CSO, MoSPI, please click here to access 
 
Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, CSO, MoSPI, please click here to access

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The press release of MoSPI dated 5 January, 2018 had stated that the growth in real GVA by the ‘agriculture, forestry and fishing’ sector is likely to fall from 4.9 percent to 2.1 percent between 2016-17 and 2017-18 viz. a decline by 2.8 percentage points. The press release dated 28 February, 2018, however, mentions that the growth in real GVA by the agrarian sector is expected to decline from 6.3 percent to 3.0 percent between the last two crop year viz. a decline by 3.3 percentage points.
 
While replying (on 9th March, 2018) to a unstarred question (no. 1642) by Shri D Kupendra Reddy in the Rajya Sabha, the Minister of State in the Ministry of Agriculture and Farmers Welfare Shri Gajendra Singh Shekhawat said that since 2016-17 saw a record production of food grains and the base year 2015-16 (for calculating growth of GVA 2016-17) was a drought year, the GVA in agriculture and allied sector recorded a high growth during 2016-17. However, despite a better agricultural output, which was estimated for 2017-18, the growth in GVA is moderate due to the high output in the base year, viz. 2016-17. Please click here to know more.

In its recent press note, the MoSPI has clearly mentioned that as per the information furnished by the Department of Agriculture and Cooperation (DAC), the growth in production of food grains during the agriculture year 2017-18 is expected to be 0.9 percent as compared to 9.4 percent in the previous agriculture year. It also says that crops including fruits and vegetables account for nearly 59.0 percent of gross domestic product (GDP) in ‘agriculture, forestry and fishing’ sector. Approximately 41.0 percent of GVA of this sector is derived from livestock products, forestry and fisheries, which is likely to exhibit a combined growth of roughly 5.1 percent in the present crop year.

Production of various crops in 2017-18

The second advance estimates by the Ministry of Agriculture & Farmers Welfare pertaining to crop production in 2017-18 indicates that total rice production is likely to grow by 1.2 percent between 2016-17 and 2017-18 to reach 111.0 million tonnes. Please check table-1.

Similarly, total pulses production is anticipated to rise by 3.5 percent between 2016-17 and 2017-18 to reach 23.9 million tonnes. Despite a rise in production of pulses, it has been reported by farmers that their market prices have become lower than the minimum support prices that was announced by the government.  

Coarse cereals output is likely to rise by 3.8 percent between 2016-17 and 2017-18 but oilseeds production is expected to dip by 4.5 percent between these two years.

Wheat production is expected to drop from 98.5 million tonnes to 97.1 million tonnes between 2016-17 and 2017-18 viz. a fall of -1.4 percent.

Total foodgrain production is likely to increase by a meagre 0.9 percent between 2016-17 and 2017-18 i.e. from 275.1 million tonnes to 277.5 million tonnes.

Table 1: Production of various kharif and rabi crops (in million tonnes)
 
Table 1 Production of various crops 
 
Source: Second Advance Estimates of Production of Foodgrains for 2017-18, released on 27 February, 2018, Ministry of Agriculture & Farmers Welfare, please click here to access
 
Note: Foodgrain production has been calculated by summing up production of rice, wheat, pulses and coarse cereals only

It is worth noting that a report entitled 2017 Southwest Monsoon End of Season Report by the India Meteorological Department (IMD) says that the monthly rainfalls over the country as a whole were more than the long period average (LPA) during first two months of the monsoon season (104 percent of LPA in June and 102 percent of LPA in July) and were less than LPA during the last two months of the season (87 percent of LPA in August and 88 percent of LPA in September).
 
According to the 2016 Southwest Monsoon End of Season Report by IMD, the monthly south west monsoon rainfalls over the country as a whole was 89 percent of LPA in June, 107 percent of LPA in July, 91 percent of LPA in August and 97 percent of LPA in September.  


References:

Press Note on Second Advance Estimates of National Income 2017-18 and Quarterly Estimates of GDP for the 3rd Quarter (Q3) of 2017-18, released on 28 February, 2018, Central Statistics Office, Ministry of Statistics & Programme Implementation, please click here to access
 
Second Advance Estimates of Production of Foodgrains for 2017-18, released on 27 February, 2018, Ministry of Agriculture & Farmers Welfare, please click here to access
 
Press Note on First Advance Estimates of National Income 2017-18, released on 5 January, 2018, CSO, MoSPI, please click here to access
  
Minimum Support Prices (MSP) and bonus for kharif crops of 2017-18 season, Ministry of Agriculture & Farmers Welfare please click here to access

2017 Southwest Monsoon End of Season Report, IMD, please click here to access
 
2016 Southwest Monsoon end of season report, IMD, please click here to access
 
Agriculture ministry differs with CSO over estimated growth of farm sector, News alert from Inclusive Media for Change dated 9 January, 2018, please click here to access 

Poor south west monsoon rainfall sours hope for good foodgrain output, News alert from Inclusive Media for Change, dated 10 November, 2017, please click here to access
 
Cropping seasons of India- Kharif & Rabi, Arthapedia, please click here to read more
 
Agri, allied sectors to see moderate growth of 3% this fiscal, The Times of India, 9 March, 2018, please click here to access 
 
Farmer bodies announce public audit of MSP system -Sayantan Bera, Livemint.com, 7 March, 2018, please click here to access 

GDP numbers have brought cheer, but Indian economy needs a more even path to growth -Radhika Pandey, Amey Sapre and Pramod Sinha, ThePrint.in, 2 March, 2018, please click here to access 
 
National Income in India: What's really growing? -CP Chandrasekhar and Jayati Ghosh, Macroscan.org, 28 February, 2018, please click here to access 
 
 
Image Courtesy: Inclusive Media for Change/ Himanshu Joshi



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