Rural distress looms: dip in crop prices, remittances; rising Covid cases -Aanchal Magazine, Sunny Verma and Anil Sasi

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published Published on Sep 13, 2020   modified Modified on Sep 13, 2020

-The Indian Express

While the over 3% agriculture growth in the first quarter factored in strong Rabi procurement, with high-price realisations getting reflected in the output numbers, fresh data from mandis indicate a slide in the prices of the intercrop produce — horticulture, milk and poultry etc.

The rural sector may have held out the only sliver of hope amid the broader collapse in the first-quarter GDP numbers but there are fresh pointers to a brewing crisis in the hinterland that could stall growth in the coming quarters.

There are at least three key stress points. While the over 3% agriculture growth in the first quarter factored in strong Rabi procurement, with high-price realisations getting reflected in the output numbers, fresh data from mandis indicate a slide in the prices of the intercrop produce — horticulture, milk and poultry etc.

With most migrants having returned home, another important source of rural demand, remittances from urban India — money migrants sent home — is little more than a trickle. This, for states such as Bihar, is critical given that it makes up nearly 35 per cent of the state GDP and is a significant income support for a bulk of the non-farm families.

On top of this double blow, comes Covid itself. With the disease burden rapidly moving from urban centres to the hinterland as the harsh lockdown unwinds, its social and public health implications — most of rural India is ill-equipped for critical care — will be felt in economic activity.

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The Indian Express, 13 September, 2020, https://indianexpress.com/article/india/covid-crisis-rural-sector-crop-prices-gdp-slowdown-6593826/


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