Rural demand is expected to get a boost of around Rs 11,000 crore from the record kharif harvest, coupled with the hike in Minimum Support Price (MSP), according to a report.
The report was prepared by credit rating agency Care Ratings. The agriculture ministry projects a good crop in the estimates for the kharif season at over 150 million tonnes. In addition, the government had also earlier increased the MSP of all kharif crops by 1-5%. Tur, urad, groundnut, jowar, and bajra are set in the upper end of these new prices. Moreover, the normal monsoons will also aid the farmers.
The report show that the overall production of crops would be higher this year. However, there would be shortfalls in some like oilseeds, cotton and some of the coarse cereals whose area under cultivation shrank.
The agriculture ministry on Tuesday released the first advance estimates of production of major kharif crops for 2021-22. The total food grain production is estimated to reach a new high of 150.50 million tonnes (mt). However, oilseed production is estimated at 2.33 million tonnes. This is lower than its target of 26 mt and last year’s 24.03 mt.
Madan Sabnavis, Chief Economist at Care Ratings said that the net disposable income for farmers this season is expected to be higher by Rs 10,700 crore. This is an increase of up 5.3%, mainly due to both higher production as well as higher prices. Furthermore, he added that it may touch Rs 2,10,099 crore from Rs 1,99,357 crore in 2020. Net gross income will be Rs 5.65 lakh crore, from Rs 5.36 lakh crore in 2020, with the ratio of net income to total income being 37%.