Agriculture, which provides gainful employment to 60% of India’s population, appears poised for another good year of production as a host of tailwinds converge. But will these lift farm incomes?
As things stand, a pile-up of inventory and carry-over of stock following above-normal production of food grains and pulses between 2016 and 2018 have weighed on prices and eroded profitability of farmers. And theannouncement of farm loan waivers in some states and demand for waivers in several others have moderated growth of agriculture credit and kept non-performing asset levels high.
But government measures such as allowing exports of pulses, and hike in import duty of edible oil – apart from the proposed price deficiency payments – are expected to improve profitability. The Union Budget for this fiscalhas mandated MSPs at 1.5 times the cost of production, along with a raft of measures to fire up the rural economy. Effective implementation and close coordination with states – given agriculture is a state subject - would be critical, though.
Prospects of a third straight year of normal monsoon, with the Indian Meteorological Department ruling out an El Nino (associated with weak summer monsoon) event in 2018, augurs well for agricultural production.
Besides, opportunities such as expiry of patents and increase in acceptance of hybrid seeds are seen boosting demand for pesticides and seeds across agriculture segments. Prospects for micro-irrigation too look bright.
In the context, CRISIL Research has brought out the agriculture report, 2018, which offers sharp insights on the emerging market dynamics, state- and crop-wise profitability, government policies and profitability across keyagricultural inputs. It also factors advancements in technology such as vertical farming, which uses hydroponics in greenhouses, as a viable option for horticulture in urban areas.
The key topics covered in the report are:
Agricultural lending: state-wise opportunity and risk evaluation (top 15 states)
Role of non-banking finance companies and microfinance units in agriculture financing
Agricultural insurance market: structure and coverage
Key agricultural input segments: forecast and trends
Financial and operational benchmarking of ~250 companies
Tools to rank states and crops on expected profitability in 2018
Over 1,200 data tables across key inputs covering state- and district-level assessment
Continuous update on key data points such as rainfall, net sown area and mandi prices
Monthly dashboard providing updates on key parameters