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Normal Rains Expected in India, Boosts Harvest Prospects

27 April 2012

INDIA - India is expected to have a normal monsoon for the third consecutive year, boosting prospects of good harvests and higher rural incomes.

"This year, monsoon as a whole is most likely to be normal which largely means normal farm production," said Earth Sciences minister Vilasrao Deshmukh, reports the Economic Times.

Monsoon rains irrigate 65 per cent of farms in the world's second-biggest producer of rice, wheat, sugar and cotton. The farm sector accounts for about 15 per cent of India's nearly $2-trillion economy and provides livelihood to over 58 per cent of the population.

"A good monsoon is a lifeline for Indian farmers and the country's food security. It impacts the economy because agriculture and rural incomes are linked to processing, manufacturing and fast moving consumer goods industry," said National Centre for Agricultural Economics and Policy Research, principal scientist, Pratap Singh Birthal.

According to the Economic Times, a bumper harvest this summer will allow farmers to increase incomes at a time when the rising cost of cultivation and general inflation is eating into their profits. Half of India's farm output comes from crops planted during the first half of the June-September season.

Summer rain also influences winter food crops such as wheat and rapeseed which are grown in irrigated areas which use water in reservoirs dependent on monsoon rains. Distribution of the rains across key arable regions is also a major factor in farm production.

"On assumption of normal monsoon, the production of summer crops like paddy, cotton, groundnut etc will be higher. The monsoon, especially in the paddy producing areas is likely to be even," said minister of state for Earth Sciences Dr Ashwini Kumar. IMD will issue update forecast in June 2012 as a part of the second stage forecast.

Agriculture Minister Sharad Pawar said earlier this week that India is headed for record production of major cash crops such as rice, cotton, sugarcane and wheat, according to the third advance estimates.

However, good farm production may not reign consumer food price inflation, which rose to a five-month high of 9.94 per cent in March. Protein-rich foods such as meat, eggs, milk and poultry, along with fruits and vegetables have seen the strongest rise in prices over the last two years due to rising demand and supply-side constraints.

"The floor prices of food items are increasing every year making food costly. Good production doesn't always mean low food cost in the regime of high minimum support prices announced by the government. High produce will have positive impact on farmers'income but it may not bring down the prices," said Madan Sabnavis, chief economist, CARE Ratings.

The forecast of a normal monsoon is expected to boost sales of farm inputs such as seeds, tractors and fertilisers and bring cheer to FMCG and durables manufacturers. Rural consumption contributes to half of India's total private consumption.

TheCropSite News Desk

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