We often hear reports and news regarding production outlook, sowing acreage and actual production status of Kharif or Rabi season crops and the headlines are generally on the trending list.
This year too we are aware about India experiencing another bumper harvest season of the Kharif crops, following improvement in the distribution of monsoon rain during the last fortnight of August, and meticulous efforts of the government in increasing the land area under sowing. Even there are reports of rise in planted area of Rabi Crop so far, versus last year’s corresponding period. But ever wondered the impact seen on the Agricultural Sector and our economy?
First of all let us understand the benefits of a bumper crop season. A good harvest is helpful for the government to replenish its granaries for the Public Distribution System and reduce the issues of hunger and malnutrition. Another benefit is that it enhances the export possibilities due to rise in the Supply availability as the possibility of domestic supplies to remain above the total consumption improves. This also makes the country self sufficient and lowers or eliminates the necessity to import.
Rising export prospects and lower imports in turn is beneficial in adding the dollar reserves therefore boosting the nation’s economy on the whole. It also benefits the end users since they are able to get the food products at affordable prices and able to reduce their food expenses. The food inflation is also under control because of rise in food grain production.
But there is other side of the coin as well i.e. with the increased supply of crops (like oilseeds. cereals and pulses) are procured by the government, the fall in prices can never be ruled out, which is generally dependent on the forces of demand and supply. As a result this increases the possibility of affecting the farm income adversely. All in all it poses a challenge for the government to maintain the food prices at levels that can ensure farmers getting their due profits, and not depriving consumers of the benefits of a bumper harvest at the same time.
Another challenging issue for the government is that a very small proportion of the produce is procured by government agencies and major quantity is purchased by the private players. In our country the prevalent system of selling the produce is such that the intermediary gains are generally larger than the producer and the consumer. After harvesting, the crop goes out of the hand of the primary producer (farmer) and is largely manipulated by the intermediary bodies or players. Under this situation the primary producer or farmer gets low prices, while consumers often have to pay high rates ultimately affecting the producer and consumer adversely.
This year we had a better Kharif harvest versus previous season while Rabi seeding area remains above last year till now. So despite rise in export prospects and better chances of increasing our GDP from the Agriculture sector the Government also has a challenging task of managing the food prices at desirable levels so as to maintain a healthy income for the farmers in 2021.
