Govt confident of higher GVA for agriculture sector in 2017-18

New Delhi: Following the release of the advance estimate of Gross Domestic Product (GDP) and Gross Value Added (GVA) for the country's economy in 2017-18, the Ministry of Agriculture and Farmers' Welfare (MoAFW) on Sunday said that the agriculture sector is expected to register a much higher GVA for the aforementioned time period, which will be reflected in the final estimate figures.

As per data released by the Central Statistics Office (CSO) earlier in the week, the GVA of 'Agriculture, Forestry and Fishing' index for the year 2017-18 was estimated at 2.1 per cent, compared to 4.9 per cent in the preceding year.

To this, the ministry, who had a quick deliberation on the growth rate for this sector, said the lower coverage of the area by August 2017 on account of the delayed onset of monsoons caused a poor reflection compared to the actual positive field situation by December. The estimate also indicated that despite a lower share of crop sector in the GVA computation of agriculture, based on August 2017 status the growth rate still worked out to 2.1 per cent.

"This is a manifestation of higher growth rates in livestock and fishery sectors, the other two components. As seen thus, even by August 2017 the estimated production of livestock and fishery was very positive and by December, crop the dominant sector has bounced back. If this amended and actual field situation is taken into account in the computation of the GVA for Agriculture sector as a whole, its growth rate can be estimated to be much higher than the Advance Estimate of 2.1 per cent", the ministry noted.

With regards to Kharif crops, the ministry noted that the area coverage under different crops in Kharif as of August, 2017 was below that of the previous year on account of delay in onset of monsoons in some parts of the country. However, good rainfall thereafter helped the Ministry in increasing the area coverage in accordance with Kharif targets.

"Despite the delay in onset of monsoons and relatively poorer rainfall compared to the previous year, the area coverage under Kharif finally rose to 106.55 million against the five-year average of 105.86 million", the ministry noted.

In case of horticulture, which also forms a part of the crop sector, a similar positive trend was seen in respect of both area coverage and production as of December 2017. The area coverage as per first advance estimate under fruits and vegetables stood at 24.92 million, as against the previous year final of 24.85 million. Concomitantly, the horticulture output as per first advance estimate was 305.4 million tonnes compared to 300.6 million tonnes in the previous year (2016-17).

Since crop sector inclusive of foodgrains, oilseeds, commercial crops and horticulture account for more than 60 per cent in the weight of the economic activity, namely, 'Agriculture, Forestry and Fishing', the value in respect of crops is bound to influence overall GVA estimate for the sector, either positively or negatively. It is, hence logical, that the computation based on area coverage under crops as in August 2017 had a negative impact on the advance estimate for the overall agriculture sector, the ministry noted.

"The GVA estimate is bound to get corrected upwards, if increased area coverage by December 2017 and concomitant production estimate in case of foodgrains, oilseeds and commercial crops, in particular, are taken into account. These three accounts for the higher percentage of the share than horticulture in the GVA computation. And horticulture is showing a higher productivity estimate", it said.

In terms of Rabi, the ministry said it was optimistic about achieving a high growth rate due to improvement in the performance of Rabi sector, in addition to good Kharif.

"As on January 5, 2018, the area coverage under Rabi is 58.6 million, which is a very good progress. Considering that the Rabi sowing continues up to the first week of February, the total area under crops and resultant production will be very good", the ministry claimed.

Further, the ministry expects to consolidate the record production achieved during the year 2016-17, by focusing on realising higher productivity. The credit made available for the year 2017-18 is as high as Rs 10 lakh crore, compared to Rs 9 lakh crore in the year 2016-17. Also, state governments have been pursued to enhance the availability of credit to the farmers, which is a critical input for achieving higher productivity.

"Considering that crop segment constitutes a dominant component of the GVA computation, its performance is very critical. However, with inelasticity of land where there exists little scope for increase in the average coverage, productivity enhancement assumes importance. Crops in particular and agriculture, in general, are highly dependent on monsoons and the overall status of weather. Even small variations in weather tend to influence agriculture adversely, as seen for example, in the area coverage by August 2017. The ministry has, therefore, been focusing on achieving higher productivity in all the segments including crops".