January 20, 2021

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Early and Plentiful Harvest on Its Way!!

Neha Kundu August 28, 2020 3 min read

Indian economy is hugely dependent on agriculture with nearly 60% of the population still dependent on farming and allied activities. The attempts of turning India into an industrialized nation don’t seem to show results as people are still living off from farms. Speaking of farms, Indian agriculture is still dependent on monsoon which is a huge determinant of the harvest of crops and subsequently a determinant of the farmers’ earnings. Owing to several factors, early and good harvest is expected this year. Rainfall pattern, sowing data, and the labor movement, these all suggest that farmers can expect good and early harvest this year.

 

Weather and Rainfall Pattern Affecting This Year’s Harvest

The weather and rainfall pattern this year is very unusual and even beneficial for farming. Rain showers are followed by some sunny days and then rain showers show up again. This is ideal for farming according to many farmers from the state of Uttar Pradesh in particular. Bright sunshine, rain showers, and clean air due to falling levels of pollution have added up to yield healthy crops this year, which has been desolate otherwise.

Rains have evenly blessed some parts of the Indian subcontinent. However, some parts of Bihar, Assam, Gujarat, Telangana, and Andhra have been hit by floods. Looking at India as a whole, the chances of good harvest are fair this year. But whether or not this will enhance the income of farmers depends on the market conditions and prices of various commodities.

Excess of production can even depress the prices but with smart planning, this case can be avoided. In fact, well-thought policies can help in the revival of the economy using this year’s agricultural harvest as an aid. Two major reforms are undertaken for the same.

These are:

  1. Deregulation of several commodities that were under the Essential Commodities Act
  2. The second is allowing direct trade

Ashok Dalwai, CEO of National Rainfed Area Authority (NRAA) under the Ministry of Agriculture and Farmer’s Welfare, claims that they are also finding other ways to double the incomes of farmers by 2022-23.

 

Sowing Data and Labour Movement Affecting This Year’s Harvest

Earlier this year, around April, there was an acute shortage of laborers for agriculture and various other industries. The major reason for this was that laborers were forced to migrate to their homelands. It is due to the global outbreak of the pandemic which led to a shortage of work for them. But this reverse migration led to the availability of labor in the villages which is a good sign for the agriculture industry.

Furthermore, the availability of cheap labor in the villages led to early Kharif sowing, at the ideal time. This is also responsible for the expected early and good harvest this year. All these factors, when coupled together, will be blessing the collapsing economy with an early and plentiful harvest.

Expected Effect of This Year’s Harvest on GDP

According to RBI’s survey carried out in the first week of August, professional forecasters expect GDP to shrink by 5.8% in 2020–21. But on the other hand, agriculture and allied activities are expected to expand by 3.4%. “In nominal GDP terms, this implies that the agriculture sector could expand by 13%, compared with a contraction of about 2% which we estimate for the overall economy,” analysts Rahul Bajoria and Shreya Sodhani said.

 

Major Challenges

As mentioned earlier, one of the challenges as a result of a good harvest is the surplus or excess production. Prices are expected to decrease as a result of this. “We don’t have the ability to store. We don’t have a system,’’ says Madan Sabnavis, chief economist at CARE Ratings. To support this statement, a few months back, several states reported farmers dumping their produce by the wayside after wholesale prices on occasion crashed to as low as `Rs. 100 per quintal.’

To add to the problem, restaurants, hotels, catering services, etc. are also shut down in large numbers. This has also decreased the demand for agricultural produce. This is another issue that needs to be dealt with. Surplus produce is of no use if there is no demand or proper storage facilities for storing it for future use.

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