A report reveals that because of India’s diversity, Coronavirus pandemic will have a negligible effect on Agriculture. Experts estimate that the agriculture sector will witness a 2.5% growth in FY 2020-21.
Agriculture Sector to See Growth
The recent report released by the Crisil rating agency shows that agriculture will witness a growth of 2.5% in FY21. It further said that the increase in agriculture and allied activities depends on bumper production. However, Horticulture is likely to bear the brunt of the pandemic. Mostly due to perishable products as wholesale prices already declined in April despite a sharp reduction in its supply. Also, other sets of dynamics, such as the locust attack and a normal monsoon will affect agriculture growth.
Share of Crops and Livestock in GVA
Gross value added (GVA) in the nation’s agriculture, and allied sectors grew 4% in FY20. The sector’s average growth in the past six years was about 3.2%. While agriculture crops contribute 30% to GVA, horticulture accounts for 29.2% of it. Despite making an immense contribution, agriculture crops remain the most volatile sub-sector as it showed a negative performance last year.
That apart, livestock with only 26.6% share has a crucial role in driving the agricultural GVA growth when crops take hit. The report explained that Milk production, which has a 66.2% share in livestock output, will do well as demand from households has not declined despite pandemic. Also, demand from hotels and restaurants will pick up gradually with lifting restrictions. Moreover, the requirement is met by converting liquid milk into powder form.
Impact of the Hit on Livestock Sector
On the other side, meat, eggs, fisheries, and aquaculture will see a prolonged impact as the demand for non-vegetarian food has declined amid the pandemic. However, agriculture will remain resilient to this fall as this sector has a 33.8% share in livestock output. Further, the report has identified locust attacks on crops as a risk factor. It explained that the attack was not a problem for harvested rabi crops. However, it turned out a real mess for the standing horticulture crops.
In all, the overall agriculture sector will stay resilient amid the pandemic. Economic stimulus package by the government further helped the agriculture sector sustain growth.