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LATEST NEWS UPDATES | Doubling farm growth: Sufficient soil moisture+water=Great winter crop -Dharmakirti Joshi </title>
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-The Economic Times
That India has had an excellent monsoon is a given, as is the prognosis that it will more than double agricultural growth from the lowly 1.9% seen in the last fiscal year. The happy tidings on the farm..."/>
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That India has had an excellent monsoon is a given, as is the prognosis that it will more than double agricultural growth from the lowly 1.9% seen in the last fiscal year. The happy tidings on the farm..." />
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<h1 class="cat-box-title">Doubling farm growth: Sufficient soil moisture+water=Great winter crop -Dharmakirti Joshi</h1>
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Published on</span><span class="text-date"> Oct 24, 2013</span>
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<div align="justify">-The Economic Times</div><p align="justify"><br />That India has had an excellent monsoon is a given, as is the prognosis that it will more than double agricultural growth from the lowly 1.9% seen in the last fiscal year. The happy tidings on the farm front won't end there. The joy could actually multiply by the last quarter of this fiscal year because abundant rains will benefit the increasingly important winter rabi crop more than the monsoon-based kharif.</p><p align="justify">We are factoring in some setbacks to the ongoing kharif season. For example, poor rains in Bihar and the devastation caused by cyclone Phailin in Odisha will curb overall rice production. But this will be more than offset by other harvests. Actually, the real kicker to this year's farm GDP growth will come from excellent soil moisture and, more important, copious reservoirs of water.</p><p align="justify">At last count, reservoirs with an aggregate live storage of 133.5 billion cu mwere 86% of the total capacity and 18% above the average of the last 10 years. Even in the eastern region, which received deficient rain, reservoir levels are higher than last year's and well above the decadal average.</p><p align="justify">Trends reveal that rabi output increased significantly when storage was above 85%: such as in 2006-07, when it grew 8.1% and despite anaemic kharif growth at 0.6%, farm GDP grew by 4.2%. A similar story played out in 2011-12 when rabi output grew at 3.5% over a very high base of 8.3%. This, along with improved soil moisture that accompanies a healthy southwest monsoon, fulfils a critical condition for a great winter crop.</p><p align="justify">The share of rabi in overall production has now risen to half. The contribution of rabi rice to overall production has risen marginally to 13% in triennium ending (TE) 2012-13 - TE is used for comparing generally volatile agricultural production over time - from around 12% in 2003-04. The significance of the rabi season for the production of many other crops has increased far more over the last decade. Take the case of coarse cereals.</p><p align="justify">The contribution of rabi coarse cereals in cereal production has gone up to 24% from 19%. Almost a quarter of maize is grown during the rabi season now compared to 15% earlier. For jowar, the rabi crop has gone up by 11 percentage points, and for pulses, it has risen by 2 percentage points to 65%. To gauge the impact of deficient monsoon on agriculture, we use the index Deficient Rainfall Impact Parameter (DRIP).</p><p align="justify">It is a better indicator than percentage deviation of rainfall from normal as it captures both shock from the rainfall as well as the vulnerability of a region, measured as a percentage of unirrigated area. Ahigher DRIP indicates a greater impact of rainfall deficiency.</p><p align="justify">This year's value of the DRIP index, at 2, is the lowest in the last eight years, and using the correlation of DRIP with agricultural GDP, we predict a 4.5% growth in farm GDP this year. On the basis of this score, rice stands out as the worst impacted crop and Bihar as the most adversely impacted state, followed by West Bengal.</p><p align="justify">Even though sowing area under rice is 2.1% higher than last year, poor rainfall in Bihar will pull down its yield in that state and impact overall rice output. Almost 43% of cultivated area in Bihar is unirrigated and rains have been 30% below normal this year. That's where the bad news end. Even if rice output takes a hit this year, it would be a good opportunity to offload excess stocks.</p><p align="justify">The outlook for coarse cereals, pulses, oilseeds (soybean and groundnut) and cotton is much better this year, which will more than offset the setback to rice production. Companies with rural exposure could thank the rain gods for providing the offset to anaemic industrial and services growth. Some manufacturers - specifically agro-based ones - could witness a reduction in input costs.</p><p align="justify">An increase in rural income will also boost demand. We expect tractor sales to grow by 16% and two-wheeler sales to rise by 4-6% in 2013-14 backed by rural demand.</p><p align="justify">If agriculture surprises on the upside and grows at, say, 6% - it has done so in 2010-11 when it grew 7.9% in a bad monsoon year - then the overall GDP will grow to 5.2%. Anything more is difficult because farming does not have the heft to lift non-farm sectors, which now account for 86% of GDP and are facing strong headwinds.</p><p align="justify"><em>The writer is chief economist, Crisil. Co-authored with Anuj Agarwal, economic analyst with the analytical company</em></p>
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<br><a href="http://economictimes.indiatimes.com/opinion/comments-analysis/doubling-farm-growth-sufficient-soil-moisture-water-great-winter-crop/articleshow/24621678.cms" class="re" target="_blank">The Economic Times, 24 October, 2013, http://economictimes.indiatimes.com/opinion/comments-analysis/doubling-farm-growth-sufficient-soil-moisture-water-great-winter-crop/articleshow/24621678.cms</a><div class="clear"></div>
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LATEST NEWS UPDATES | Doubling farm growth: Sufficient soil moisture+water=Great winter crop -Dharmakirti Joshi </title>
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<h1 class="cat-box-title">Doubling farm growth: Sufficient soil moisture+water=Great winter crop -Dharmakirti Joshi</h1>
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Published on</span><span class="text-date"> Oct 24, 2013</span>
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<div align="justify">-The Economic Times</div><p align="justify"><br />That India has had an excellent monsoon is a given, as is the prognosis that it will more than double agricultural growth from the lowly 1.9% seen in the last fiscal year. The happy tidings on the farm front won't end there. The joy could actually multiply by the last quarter of this fiscal year because abundant rains will benefit the increasingly important winter rabi crop more than the monsoon-based kharif.</p><p align="justify">We are factoring in some setbacks to the ongoing kharif season. For example, poor rains in Bihar and the devastation caused by cyclone Phailin in Odisha will curb overall rice production. But this will be more than offset by other harvests. Actually, the real kicker to this year's farm GDP growth will come from excellent soil moisture and, more important, copious reservoirs of water.</p><p align="justify">At last count, reservoirs with an aggregate live storage of 133.5 billion cu mwere 86% of the total capacity and 18% above the average of the last 10 years. Even in the eastern region, which received deficient rain, reservoir levels are higher than last year's and well above the decadal average.</p><p align="justify">Trends reveal that rabi output increased significantly when storage was above 85%: such as in 2006-07, when it grew 8.1% and despite anaemic kharif growth at 0.6%, farm GDP grew by 4.2%. A similar story played out in 2011-12 when rabi output grew at 3.5% over a very high base of 8.3%. This, along with improved soil moisture that accompanies a healthy southwest monsoon, fulfils a critical condition for a great winter crop.</p><p align="justify">The share of rabi in overall production has now risen to half. The contribution of rabi rice to overall production has risen marginally to 13% in triennium ending (TE) 2012-13 - TE is used for comparing generally volatile agricultural production over time - from around 12% in 2003-04. The significance of the rabi season for the production of many other crops has increased far more over the last decade. Take the case of coarse cereals.</p><p align="justify">The contribution of rabi coarse cereals in cereal production has gone up to 24% from 19%. Almost a quarter of maize is grown during the rabi season now compared to 15% earlier. For jowar, the rabi crop has gone up by 11 percentage points, and for pulses, it has risen by 2 percentage points to 65%. To gauge the impact of deficient monsoon on agriculture, we use the index Deficient Rainfall Impact Parameter (DRIP).</p><p align="justify">It is a better indicator than percentage deviation of rainfall from normal as it captures both shock from the rainfall as well as the vulnerability of a region, measured as a percentage of unirrigated area. Ahigher DRIP indicates a greater impact of rainfall deficiency.</p><p align="justify">This year's value of the DRIP index, at 2, is the lowest in the last eight years, and using the correlation of DRIP with agricultural GDP, we predict a 4.5% growth in farm GDP this year. On the basis of this score, rice stands out as the worst impacted crop and Bihar as the most adversely impacted state, followed by West Bengal.</p><p align="justify">Even though sowing area under rice is 2.1% higher than last year, poor rainfall in Bihar will pull down its yield in that state and impact overall rice output. Almost 43% of cultivated area in Bihar is unirrigated and rains have been 30% below normal this year. That's where the bad news end. Even if rice output takes a hit this year, it would be a good opportunity to offload excess stocks.</p><p align="justify">The outlook for coarse cereals, pulses, oilseeds (soybean and groundnut) and cotton is much better this year, which will more than offset the setback to rice production. Companies with rural exposure could thank the rain gods for providing the offset to anaemic industrial and services growth. Some manufacturers - specifically agro-based ones - could witness a reduction in input costs.</p><p align="justify">An increase in rural income will also boost demand. We expect tractor sales to grow by 16% and two-wheeler sales to rise by 4-6% in 2013-14 backed by rural demand.</p><p align="justify">If agriculture surprises on the upside and grows at, say, 6% - it has done so in 2010-11 when it grew 7.9% in a bad monsoon year - then the overall GDP will grow to 5.2%. Anything more is difficult because farming does not have the heft to lift non-farm sectors, which now account for 86% of GDP and are facing strong headwinds.</p><p align="justify"><em>The writer is chief economist, Crisil. Co-authored with Anuj Agarwal, economic analyst with the analytical company</em></p>
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<br><a href="http://economictimes.indiatimes.com/opinion/comments-analysis/doubling-farm-growth-sufficient-soil-moisture-water-great-winter-crop/articleshow/24621678.cms" class="re" target="_blank">The Economic Times, 24 October, 2013, http://economictimes.indiatimes.com/opinion/comments-analysis/doubling-farm-growth-sufficient-soil-moisture-water-great-winter-crop/articleshow/24621678.cms</a><div class="clear"></div>
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LATEST NEWS UPDATES | Doubling farm growth: Sufficient soil moisture+water=Great winter crop -Dharmakirti Joshi </title>
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That India has had an excellent monsoon is a given, as is the prognosis that it will more than double agricultural growth from the lowly 1.9% seen in the last fiscal year. The happy tidings on the farm..."/>
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<h1 class="cat-box-title">Doubling farm growth: Sufficient soil moisture+water=Great winter crop -Dharmakirti Joshi</h1>
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Published on</span><span class="text-date"> Oct 24, 2013</span>
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<div align="justify">-The Economic Times</div><p align="justify"><br />That India has had an excellent monsoon is a given, as is the prognosis that it will more than double agricultural growth from the lowly 1.9% seen in the last fiscal year. The happy tidings on the farm front won't end there. The joy could actually multiply by the last quarter of this fiscal year because abundant rains will benefit the increasingly important winter rabi crop more than the monsoon-based kharif.</p><p align="justify">We are factoring in some setbacks to the ongoing kharif season. For example, poor rains in Bihar and the devastation caused by cyclone Phailin in Odisha will curb overall rice production. But this will be more than offset by other harvests. Actually, the real kicker to this year's farm GDP growth will come from excellent soil moisture and, more important, copious reservoirs of water.</p><p align="justify">At last count, reservoirs with an aggregate live storage of 133.5 billion cu mwere 86% of the total capacity and 18% above the average of the last 10 years. Even in the eastern region, which received deficient rain, reservoir levels are higher than last year's and well above the decadal average.</p><p align="justify">Trends reveal that rabi output increased significantly when storage was above 85%: such as in 2006-07, when it grew 8.1% and despite anaemic kharif growth at 0.6%, farm GDP grew by 4.2%. A similar story played out in 2011-12 when rabi output grew at 3.5% over a very high base of 8.3%. This, along with improved soil moisture that accompanies a healthy southwest monsoon, fulfils a critical condition for a great winter crop.</p><p align="justify">The share of rabi in overall production has now risen to half. The contribution of rabi rice to overall production has risen marginally to 13% in triennium ending (TE) 2012-13 - TE is used for comparing generally volatile agricultural production over time - from around 12% in 2003-04. The significance of the rabi season for the production of many other crops has increased far more over the last decade. Take the case of coarse cereals.</p><p align="justify">The contribution of rabi coarse cereals in cereal production has gone up to 24% from 19%. Almost a quarter of maize is grown during the rabi season now compared to 15% earlier. For jowar, the rabi crop has gone up by 11 percentage points, and for pulses, it has risen by 2 percentage points to 65%. To gauge the impact of deficient monsoon on agriculture, we use the index Deficient Rainfall Impact Parameter (DRIP).</p><p align="justify">It is a better indicator than percentage deviation of rainfall from normal as it captures both shock from the rainfall as well as the vulnerability of a region, measured as a percentage of unirrigated area. Ahigher DRIP indicates a greater impact of rainfall deficiency.</p><p align="justify">This year's value of the DRIP index, at 2, is the lowest in the last eight years, and using the correlation of DRIP with agricultural GDP, we predict a 4.5% growth in farm GDP this year. On the basis of this score, rice stands out as the worst impacted crop and Bihar as the most adversely impacted state, followed by West Bengal.</p><p align="justify">Even though sowing area under rice is 2.1% higher than last year, poor rainfall in Bihar will pull down its yield in that state and impact overall rice output. Almost 43% of cultivated area in Bihar is unirrigated and rains have been 30% below normal this year. That's where the bad news end. Even if rice output takes a hit this year, it would be a good opportunity to offload excess stocks.</p><p align="justify">The outlook for coarse cereals, pulses, oilseeds (soybean and groundnut) and cotton is much better this year, which will more than offset the setback to rice production. Companies with rural exposure could thank the rain gods for providing the offset to anaemic industrial and services growth. Some manufacturers - specifically agro-based ones - could witness a reduction in input costs.</p><p align="justify">An increase in rural income will also boost demand. We expect tractor sales to grow by 16% and two-wheeler sales to rise by 4-6% in 2013-14 backed by rural demand.</p><p align="justify">If agriculture surprises on the upside and grows at, say, 6% - it has done so in 2010-11 when it grew 7.9% in a bad monsoon year - then the overall GDP will grow to 5.2%. Anything more is difficult because farming does not have the heft to lift non-farm sectors, which now account for 86% of GDP and are facing strong headwinds.</p><p align="justify"><em>The writer is chief economist, Crisil. Co-authored with Anuj Agarwal, economic analyst with the analytical company</em></p>
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<br><a href="http://economictimes.indiatimes.com/opinion/comments-analysis/doubling-farm-growth-sufficient-soil-moisture-water-great-winter-crop/articleshow/24621678.cms" class="re" target="_blank">The Economic Times, 24 October, 2013, http://economictimes.indiatimes.com/opinion/comments-analysis/doubling-farm-growth-sufficient-soil-moisture-water-great-winter-crop/articleshow/24621678.cms</a><div class="clear"></div>
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Published on Oct 24, 2013
Modified on Oct 24, 2013
-The Economic Times
That India has had an excellent monsoon is a given, as is the prognosis that it will more than double agricultural growth from the lowly 1.9% seen in the last fiscal year. The happy tidings on the farm front won't end there. The joy could actually multiply by the last quarter of this fiscal year because abundant rains will benefit the increasingly important winter rabi crop more than the monsoon-based kharif.
We are factoring in some setbacks to the ongoing kharif season. For example, poor rains in Bihar and the devastation caused by cyclone Phailin in Odisha will curb overall rice production. But this will be more than offset by other harvests. Actually, the real kicker to this year's farm GDP growth will come from excellent soil moisture and, more important, copious reservoirs of water.
At last count, reservoirs with an aggregate live storage of 133.5 billion cu mwere 86% of the total capacity and 18% above the average of the last 10 years. Even in the eastern region, which received deficient rain, reservoir levels are higher than last year's and well above the decadal average.
Trends reveal that rabi output increased significantly when storage was above 85%: such as in 2006-07, when it grew 8.1% and despite anaemic kharif growth at 0.6%, farm GDP grew by 4.2%. A similar story played out in 2011-12 when rabi output grew at 3.5% over a very high base of 8.3%. This, along with improved soil moisture that accompanies a healthy southwest monsoon, fulfils a critical condition for a great winter crop.
The share of rabi in overall production has now risen to half. The contribution of rabi rice to overall production has risen marginally to 13% in triennium ending (TE) 2012-13 - TE is used for comparing generally volatile agricultural production over time - from around 12% in 2003-04. The significance of the rabi season for the production of many other crops has increased far more over the last decade. Take the case of coarse cereals.
The contribution of rabi coarse cereals in cereal production has gone up to 24% from 19%. Almost a quarter of maize is grown during the rabi season now compared to 15% earlier. For jowar, the rabi crop has gone up by 11 percentage points, and for pulses, it has risen by 2 percentage points to 65%. To gauge the impact of deficient monsoon on agriculture, we use the index Deficient Rainfall Impact Parameter (DRIP).
It is a better indicator than percentage deviation of rainfall from normal as it captures both shock from the rainfall as well as the vulnerability of a region, measured as a percentage of unirrigated area. Ahigher DRIP indicates a greater impact of rainfall deficiency.
This year's value of the DRIP index, at 2, is the lowest in the last eight years, and using the correlation of DRIP with agricultural GDP, we predict a 4.5% growth in farm GDP this year. On the basis of this score, rice stands out as the worst impacted crop and Bihar as the most adversely impacted state, followed by West Bengal.
Even though sowing area under rice is 2.1% higher than last year, poor rainfall in Bihar will pull down its yield in that state and impact overall rice output. Almost 43% of cultivated area in Bihar is unirrigated and rains have been 30% below normal this year. That's where the bad news end. Even if rice output takes a hit this year, it would be a good opportunity to offload excess stocks.
The outlook for coarse cereals, pulses, oilseeds (soybean and groundnut) and cotton is much better this year, which will more than offset the setback to rice production. Companies with rural exposure could thank the rain gods for providing the offset to anaemic industrial and services growth. Some manufacturers - specifically agro-based ones - could witness a reduction in input costs.
An increase in rural income will also boost demand. We expect tractor sales to grow by 16% and two-wheeler sales to rise by 4-6% in 2013-14 backed by rural demand.
If agriculture surprises on the upside and grows at, say, 6% - it has done so in 2010-11 when it grew 7.9% in a bad monsoon year - then the overall GDP will grow to 5.2%. Anything more is difficult because farming does not have the heft to lift non-farm sectors, which now account for 86% of GDP and are facing strong headwinds.
The writer is chief economist, Crisil. Co-authored with Anuj Agarwal, economic analyst with the analytical company
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