As per the report, advancement in sowing has led to buoyant demand for agricultural inputs in the first quarter of this fiscal, albeit on a low base
At a time when Indian economy faces its worst crisis due to coronavirus-led lockdown, "above normal" monsoon is likely to provide some respite to agriculture sector, which contributes nearly 17 per cent of India's GDP and provides jobs to around 50 per cent of population. A report by CRISIL Research on Wednesday said that monsoon rains were 7 per cent above average this year, so far the best in five years, which led to 5.7 per cent year-on-year jump in sowing of crops.
As per the report, advancement in sowing has led to buoyant demand for agricultural inputs in the first quarter of this fiscal, albeit on a low base. June saw a 44 per cent jump in sowing over a low base of 2019, when a 19 per cent deficient monsoon had delayed kharif sowing. Though sowing growth has tapered with the kharif season's progress, but it is still expected to be 4-5 per cent higher on-year for the full season, it said.
"This year, southwest monsoon has covered majority of Indian states 12 days ahead of normal. Early arrival and good spatial and temporal distribution of rainfall advanced sowing across crops and states," Crisil said in its report.
The report said that increase in crop acreage and higher productivity will lead to a bumper kharif crop output, up 5-7 per cent on year-on-year basis.
CRISIL, in its last report in August, had forecasted a 2-3 per cent rise in sown area on-year at around 109 million hectares for kharif season 2020. It expected productivity to rise by 2-3 per cent over a low base of 2019, given the adequate water availability for critical growth stages. It estimated kharif output to rise 5-6 per cent on-year to a record, which would put downward pressure on prices of various commodities.
Meanwhile, prices and profitability of vegetables are also likely to drop over a high base of 2019.
According to CRISIL, effective implementation of central and state government schemes will further support farmer incomes.
By Chitranjan Kumar