ICRA Estimates Increase In Agriulture GVA Based On Surplus Monsoon, Kharif Sowing

Above-normal monsoon rains that helped farmers sow more crops this Kharif season bode well for agriculture, and are likely to improve gross value addition (GVA) in the sector.

Rating agency ICRA in its latest report 'Southwest Monsoon 2024 - Update', asserted that the GVA growth of agriculture, forestry, and fishing will improve to 3.2 per cent in the current financial year 2024-25 from 1.4 per cent in 2023-24.

However, rural demand, ICRA said, is likely to witness a meaningful recovery in the second half of 2024-25 due to visibility around the Kharif crop output and farm cash flows.

Traditionally, Indian agriculture (especially the Kharif area/output) is heavily reliant on the progression of monsoon rainfall.

After a weak start in June 2024 (11 per cent below Long Period Average), monsoon rainfall at the all-India level picked up in July 2024 (9 per cent above Long Period Average) and gained further momentum in August 2024 (16 per cent above Long Period Average).

Overall, the cumulative rainfall was 7 per cent above Long Period Average by the end of August 2024, which is considered to be above normal, as per the IMD's classification.

Benefitting from surplus rains since July 2024, cumulative Kharif sowing has risen by 2.2 per cent as per latest update. Based on these trends, ICRA estimates the overall sowing to exceed the 2024 area by 1.0-2.0 per cent by the end of the season. India's kharif crop sowing is progressing steadily, with farmers planting crops across 1,096.65 lakh hectares so far, as against 1,072.94 lakh hectares from last year.

Commodity-wise, paddy, pulses, oilseeds, millets, and sugarcane sowing remained higher year-on-year. Sowing for cotton and jute/mesta has, on the other side, been on the lower side. Data showed that in the pulse basket, barring uradbean, arhar, moong, kulthi, and moth bean are on the positive side.

In the 2023 Kharif season, the total area under cultivation across the country was 1,107.15 lakh hectares. The normal kharif area between 2018-19 and 2022-23 has been 1,096 lakh hectares.

India has three cropping seasons -- Summer, Kharif, and Rabi. Crops sown during June-July and dependent on monsoon rains are harvested in October-November are Kharif. Crops that are sown during October and November and the produce harvested from January depending on maturity are Rabi. Crops produced between Rabi and Kharif are Summer crops.

The pan-India reservoir storage has risen swiftly from 20 per cent of live capacity at full reservoir level (FRL) at end-June 2024 to 80 per cent at end-August 2024, aided by excess rainfall.

"This will boost the prospects for the upcoming rabi crop season and support the timely onset of sowing," rating agency ICRA said. (ANI)