Due to a weak monsoon, the agricultural sector suffers, and reservoir levels are dropping

India’s agricultural industry has suffered as a result of a southwest monsoon that was unpredictable and less intense than average for an El Nino year.

Due to the fact that more than half of the country’s farmland relies on the rains for agricultural production, this led to both damage to standing crops as well as a decrease in the area seeded beneath important crops this year, such as pulses and oilseeds. In order to cover the gap and keep costs in control, it may now be necessary to turn to costlier imports, which might lead to more problems.

Due to insufficient precipitation, the area used for growing pulses has decreased by over 9%, while the area used for growing sunflowers has decreased by as much as 65%. In comparison to the same time last year, the area planted with pulses like urad, moong, and arhar has decreased by 5.41 lakh hectares. Similar to this, 3.16 lakh hectares less land was planted with oilseeds.

This year, it is estimated that 8.68 lakh hectares of cropland in several states have been impacted by flooding or severe rain. The kharif crop harvest has started, and over the next several weeks, it will become obvious how much productivity has been lost overall.

The monsoon began later than expected in June, with surplus rain in July, a shortfall in August, and then, in certain regions of the nation, such as Punjab and Haryana, excess rain in September that damaged the standing crop. This led to a dramatic rise in vegetable costs, particularly for tomatoes and onions, which sped up inflation and strained family budgets.

Since demand for tractors sold by businesses like Mahindra & Mahindra and two-wheelers marketed by auto majors like Hero MotoCorp and Bajaj has decreased, the erosion of farmers’ incomes has had a cascading effect on industry as well, which is reflected in the declining monthly sales numbers in recent months.

The number of tractors being purchased has been steadily declining. According to data gathered on the government’s VAHAN site, there were only 49,007 registrations of agricultural tractors in September 2023, down from 68,431 in August and 84,473 in July.

Concern has been raised about the increasing cost of commodities such rice, wheat, lentils, and spices. According to the most recent data on retail inflation, although food inflation decreased to 6.56 percent in September as a result of lower prices for vegetables and cooking oil, the cost of pulses increased by 16.38 percent and the cost of spices by 23.06 percent over the same period. Cereal costs increased by 10.95 percent.

Wheat and non-basmati rice exports were prohibited by the government as another measure to control prices. Export restrictions on onions have resulted in farmer protests since their profits have decreased. Additionally, import taxes on pulses and edible oil have been decreased in order to lower the cost of these in-demand goods.

The quantity of water now accessible in the nation’s reservoirs across states is a major issue impacting on the agriculture industry going ahead.

The southwest monsoon contributes over 80% of India’s annual rainfall, which also fills the nation’s reservoirs for irrigation purposes the following growing season. Due to this year’s inadequate rainfall, it is estimated that the water storage in the reservoirs is only around 75% of what it was last year. This might have an effect on agricultural production during the next rabi season.