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India’s farm sector dependence on monsoon declining, says RBI paper

Informist, Thursday, Aug 17, 2023

 

NEW DELHI – The dependence of Indian farm sector on rainfall during the southwest monsoon season for sowing crops has declined in recent years amid an improvement in irrigation infrastructure in India, according to a Reserve Bank of India staff paper.

 

“Furthermore, the impact (of southwest monsoon rainfall) is found relatively less pronounced in periods with more irrigation vis-a-vis less irrigation, indicating irrigation mitigates the adverse consequences of monsoon deficiency on agricultural production,” the RBI paper titled “Agriculture’s Dependency on Monsoon Rainfall in India” said. 

 

According to the RBI paper, with an improvement in irrigation facilities and infrastructure, the relationship between rainfall deviation and production of crops does not appear to be direct. 

 

The paper attributed its views to a host of central bank officials and said it does not necessarily reflect the views of the RBI.

 

Data compiled by RBI staff showed that several states in India recorded expansion in rice production even during years of deficient rainfall and similarly, there have been several instances when precipitation was in surplus, and yet production of the staple declined. However, in less irrigated states, rice production declined during the majority of times when rainfall was deficient, according to the paper. 

 

“This trend suggests that higher irrigation coverage can contain the impact of rainfall deficiency to some extent,” RBI staff said in the paper. 

 

In case of production of coarse grains, several states with lower irrigation coverage posted a decline during large number of times when rainfall was deficient, data compiled by the central bank’s staff showed.   

 

“However, for the more irrigated states, coarse grains production has continued to decline over the years, notwithstanding deficient and surplus rainfalls possibly owing to substitution of crops,” the paper noted. 

 

While states remain vulnerable to rainfall volatility, they have built irrigation facilities to mitigate some of their dependence on precipitation during the country’s monsoon season, the paper added.

 

Over the last three decades, among 17 major Indian states, nine had over 50% of their net sown area irrigated compared with only three during 1990, according to the paper.  

 

“Enhanced public spending on irrigation, therefore, can provide more strength to domestic agricultural production against the monsoon vagaries,” RBI staff paper said.  End

 

Reported by Sayantan Sarkar

Edited by Akul Nishant Akhoury

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

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© Informist Media Pvt. Ltd. 2023. All rights reserved.

Source: Cogencis

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