The current monsoon season, delivering rainfall 2% above the national average, is poised to significantly bolster agricultural output, with projections indicating a 5% growth for the fiscal year. This marks a substantial rebound from the 1.4% growth recorded in FY24, driven by favourable weather conditions and early sowing practices.
The NITI Aayog spokesperson highlighted that the improved rainfall, which is crucial for the kharif crop season, is expected to enhance farm productivity and ease commodity prices, particularly for pulses which have seen elevated levels in recent months. This growth comes after a challenging period where agriculture output had stagnated following seven years of robust growth exceeding 5% annually. Particularly, the inflation in pulses, exceeding 16% in June, highlights the necessity for robust agricultural policies to balance market stability.
The spokesperson, also a former director at the National Institute of Agricultural Economics and Policy Research (NIAP), emphasised that while the 2023-24 fiscal year experienced a growth rate of just 1.4%, the lower base effect from the previous year suggests that FY25 could see an improvement to over 5%. Early indicators from the kharif season support this optimistic outlook. Looking ahead, maintaining an average growth rate of 5% annually over the next decade is deemed essential for sustainable economic development.
However, variability in agricultural output due to factors such as unpredictable weather patterns, market fluctuations, and policy shifts is anticipated. The kharif season, spanning from June to October, significantly influences farmers’ incomes and overall economic performance. Rainfall data from June 1 to July 26 shows a 2% surplus over normal levels, though some regions are experiencing minor deficits. The forecast suggests that these deficits will be offset in August, with projections indicating continued La Niña activity that could enhance rainfall.
The spokesperson noted that this year’s earlier sowing has expanded the cultivation areas for crops like tur and soybean, which, coupled with a prolonged growing period, is expected to yield higher production. To mitigate any potential price collapse due to increased output, government intervention will be crucial. Strengthening schemes such as PM-AASHA, designed to ensure fair prices for farmers’ produce, will be vital in stabilising the market. Consumer food price index (CFPI) inflation, which spiked to 9.36% in June, up from 8.69% in May and 4.55% in June 2023, underscores the urgent need for effective price control mechanisms.
