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AGRICULTURE

CSO releases GDP, GVA advance estimates for ’17-18; Agriculture GVA up
Tuesday, 09 January, 2018, 08 : 00 AM [IST]
Our Bureau, New Delhi
The Central Statistics Office (CSO) released the Advance Estimates (AEs) of the gross domestic product (GDP) and the gross value added (GVA) for India’s economy for the year 2017-18. Moreover, GVAs for various sectors of the economy, including agriculture, have been increased. The GVA of agriculture, forestry and fishing for the year 2017-18 has been estimated at 2.1 per cent, compared to 4.9 per cent in the preceeding year (2016-17).

The ministry of agriculture and farmers’ welfare (MoAFW) has had a quick deliberation on the growth rate for the agriculture sector to strategise on ensuring that the year 2017-18 ends up with a much higher growth rate. 

The components of the economic activity (agriculture, forestry and fishing) and their respective approximate GVA shares are as below:
    • Crops:60 per cent
    • Livestock: 20 per cent
    • Forestry and logging: 8.5 per cent
    • Fishing and aquaculture: 5.5 per cent

Further, the crop sector includes both agriculture and horticulture, of which foodgrains are predominant.

The AEs released by CSO were based on the data on crop coverage and estimated production shared by the Directorate of Economics and Statistics (DES), MoAFW.

DES shared data on area coverage and production for the Kharif 2017-18 in respect of foodgrains, oilseeds and commercial crops, based on their compilation by the month of August 2017. These estimates by DES are largely estimates by state governments.

In respect of horticultural crops, another important component of the crop sector, the data relating to area coverage and production estimates was shared by the horticulture advisor, ministry of agriculture, with CSO.

It would help to know that the area coverage under different crops in Kharif as of August 2017 was below that of the previous year on account of the delay in the onset of monsoons in some parts of the country.

However, good rainfall thereafter helped the ministry to increase the area coverage in accordance with kharif targets. Despite the delay in the onset of monsoons and relatively poorer rainfall vis-à-vis the previous year, the area coverage under kharif finally rose to 106.55 million hectare (ha) against the five-year average of 105.86 million ha. 

In case of horticulture, similar positive trend in respect of both area coverage and production is seen as of December 2017. The area coverage as per the first AE under fruits and vegetables stood at 24.92 million ha, as against the previous year’s final of 24.85 million ha. Concomitantly, the horticultural output as per the first AE was 305.4 million tonne (MT) compared to 300.6MT in the previous year (2016-17). 

Since the crop sector, inclusive of foodgrains, oilseeds, commercial crops and horticulture, accounts for over 60 per cent in the weightage of the economic activity, namely agriculture, forestry and fishing, the value in respect of crops is bound to influence the overall sectoral GVA estimate either positively or negatively.

It is hence logical that the computation based on area coverage under crops as in August 2017 had a negative impact on the AE for the overall agriculture sector.

The GVA estimate is bound to get corrected upwards, if the increased area coverage by December 2017 and concomitant production estimate in case of foodgrains, oilseeds and commercial crops, in particular, are taken into account.  These three account for a higher percentage of the share than horticulture in the GVA computation. And horticulture is showing a higher productivity estimate.

The agriculture ministry was of the opinion that the lower coverage of area by August 2017 on account of the delayed onset of monsoons has caused a poor reflection compared to the actual positive field situation by December 2017.

The estimate also indicate that despite a lower or negative share of the crop sector in the GVA computation of agriculture, based on the August 2017 status, the growth rate still worked out to 2.1 per cent.

This was a manifestation of the higher growth rates in the livestock and fishery sectors, the other two components.

As seen thus, even by August 2017, the estimated production of livestock and fishery were very positive and by December, crops, the dominant sector, bounced back.

If this amended and actual field situation are taken into account in computation of the GVA for the agriculture sector as a whole, its growth rate can be estimated to be much higher than the AE of 2.1 per cent.

The ministry was optimistic about achieving a high growth rate because Rabi 2017 showed a very good performance in addition to a good Kharif 2017.

The area coverage under Rabi recently was 58.6 million ha, which was a very good progress. Considering that Rabi sowing continues upto the first week of February, the total area under crops, and the resultant production, will be very good.

In totality, the crop segment in 2017-18 is expected to compare more favourably than the five-year average of area coverage.

Further, the ministry expected to consolidate the record production achieved during the year 2016-17, by focusing on realising higher productivity.

The credit made available for the year 2017-18 is as high as Rs 10 lakh crore compared to Rs 9 lakh crore in the year 2016-17.

The ministry has been pursuing all the state governments to enhance the availability of credit to the farmers, which is a critical input for achieving higher productivity.

It is also important to note that the AE for the year 2017-18 comes on the back of a very robust GVA of 4.9 per cent in the previous year.

Considering that crop segment constitutes a dominant component of the GVA computation, its performance is very critical.

However, with the inelasticity of land, where there exists little scope for increase in the average coverage, productivity enhancement assumes importance.

Crops in particular, and agriculture in general, are highly dependent on the monsoons and the overall status of the weather.

Even small variations in weather tend to influence agriculture adversely, as seen for example, in the area coverage by August 2017.

The ministry has, therefore, been focusing on achieving higher productivity in all the segments, including crops.

It is confident that its initiatives, including soil health card, the National Food Security Mission (NFSM), the Mission for Integrated Development of Horticulture (MIDH), Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), Pradhan Mantri Fasal Bima Yojana (PMFBY), the electronic National Agricultural Market (e-NAM), a higher credit basket and management of all other inputs, including fertilisers, besides a robust PMFBY for crop risk cover, will help in achieving higher productivity.

Many states have already made requests for the procurement of Kharif produce, inclusive of pulses and oilseeds.

The requests have come from various states, namely Gujarat, Maharashtra, Uttar Pradesh, Karnataka, Andhra Pradesh, etc.

The Ministry has already approved procurement proposals worth 22 lakh MT. This far exceeds the last year’s procurement.

In addition, Madhya Pradesh is undertaking its own operations under Bhavantar Bhugtan Yojana.

Further, requests for tur (arhar) procurements will start pouring in from Karnataka, Telangana, etc., where the crop growth is highly robust and high productivity is expected.

Such high demands from the states for procurement was indicative of the high productivity being realised during Kharif 2017.

The agriculture sector can, therefore, be expected to register a much higher GVA for the year 2017-18, when the final estimate figures are released.
 
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