India’s farm sector growth in the third quarter of FY22 is pegged at 2.6 per cent at constant prices, down from 4.1 per cent during the same period last fiscal despite a bumper kharif harvest, and is largely due to the effect of a higher base.
The full year Gross Value Added for the sector as per the second advance estimate is now projected to be 3.3 per cent at constant prices as against 3.9 per cent in the first estimate, while growth at current prices for the full FY-22 is now expected to be 9.8 per cent as against 9.1 per cent in the first estimate.
Meanwhile, at current prices growth is projected to be 9.7 per cent in the October to December quarter of 2021-22 as against 8.8 per cent during the corresponding period.
Therefore, delivering an inflation impact of 7.1 percentage points higher than the 4.7 percentage points during the same period last fiscal
“The GVA for agriculture and allied activities in the third quarter is lower than last fiscal mainly due to base effect and could also be due to lower growth in the allied sector because production in the crop sector is projected to be robust in this season,” Madan Sabnavis Chief Economist at Bank of Baroda told Business Standard. The Allied sector has a share of close to 40 per cent in the total agriculture GVA, according to Sabnavis.
Agriculture and allied activities growth has been stuck at around 3-4 per cent for a long while there has not been a significant drop in the number of people dependent directly or indirectly on the sector.
Also, because of higher inflation, the terms of trade in agriculture have gone against farmers despite higher production.
On the production front, data from the latest second advance estimate show India is expected to harvest a record foodgrains production of 316.06 million tonnes (kharif+rabi) in 2021-22 season, which is 1.71 per cent more than last year.
The data also showed that total pulses production in 2021-22 is estimated to be 26.96 million tonnes, which is 5.77per cent more than last year, while total oilseeds production (which also includes oilseeds grown during the kharif season) is projected to be 37.14 million tonnes, which is 3.34 per cent more than last year.
Cotton production is estimated to be 34.06 million tonnes, which is 3.35 per cent less than last year, while sugarcane output is projected at 414.04 million tonnes which is 2.13 per cent more than last year