India's agriculture growth dips in Q1 as heatwave stings crop output

Gross Value Added (GVA) growth in agriculture and allied activities in the first quarter of the 2024-25 financial year (Q1FY25) dipped to 2.7 per cent at constant prices from 4.2 per cent in Q1FY24 due to a drop in output of some crops following heatwave in the main growing months.

Low post-monsoon rains, which dried most of the reservoirs in several states across the country, also impacted the production of many crops.

At current prices, the growth was estimated at 8.5 per cent as against 4.1 per cent in Q1FY24 due to a spike in food inflation during the April to June months of FY25.

However, most experts feel that the pace of growth in the agriculture and allied activities GVA in the months to come will strongly pick up pace as the southwest monsoon in 2024 has been among the best in recent years.

The rainfall from June 1 to August 30 this year has been 7 per cent more than normal.

As a consequence, the acreage of kharif crops till August 23, 2024, was almost 2 per cent more than the same period last year.

A good southwest monsoon has also filled the reservoirs, which will aid in the planting of the forthcoming rabi crops.

“We are maintaining a full-year growth forecast for agriculture and allied activities at 3.5-4 per cent as the monsoon has been good so far.

"The first quarter has been below par due to a dip in production of ancillary crops and also allied activities as the heatwave in April to June took its toll,” Madan Sabnavis, Chief Economist, Bank of Baroda, told Business Standard.

Production of several rabi crops, particularly maize, cereals, and pulses, was lower than in 2023 due to the dry weather.

The southwest monsoon in the 2023 season ended with a deficit of 5.6 per cent, which categorized it as a “below normal” monsoon season.

Statistically, the June 1 to September 30 rainfall cumulatively across India was around 821 millimetres against a normal of 869 millimetres.

This also meant that the monsoon season in 2023 ended with rainfall equivalent to 94 per cent of the Long Period Average (LPA).

The IMD had predicted rains in 2023 to be around 96 per cent of LPA, with a model error of plus and minus 4 per cent.