Farm sector to grow by 2.6% in FY09

NEW DELHI: The slump in agricultural growth during the third quarter exaggerates the slowdown in the sector which may grow at 2.6% this fiscal, according to a report by global financial firm Goldman Sachs. ���Although we expect agricultural growth to be 2.6% Y-o-Y in 2008-09 ��� lower than the 4.9% in 2007-08 ��� we think the third quarter agricultural data exaggerates the extent of slowdown,��� the report said.

The growth of the agriculture, forestry and fishing sectors fell to 2.2% in the third quarter of this fiscal compared to 6.9% in the year-ago period. Goldman���s projection about the farm sector���s growth in 2008-09 coincides with the estimate of a 2.6% expansion rate by the central statistical organisation (CSO).

However, the reason behind the exaggeration in the dip in the farm sector growth seems to be a high base of 6.9% in the comparable period last fiscal, Goldman said.

While releasing the growth figures, CSO attributed the fall in the production of coarse cereals, pulses, cotton, oilseeds and sugarcane during the kharif season of 2008-09 as mentioned in the second advance estimate to the slump in the farm sector performance, even as rice output saw some growth.

Agriculture secretary T Nanda Kumar said: ���We are sticking to the 2.6% growth rate projected by the CSO for the entire 2008-09 fiscal as of now.��� The study by Goldman said an expected upward revision of the data in the final output estimate might augur well for the growth rate.

Generally, advance estimates are revised upwards as various crops are harvested. In the past three years, the third quarter agricultural GDP has undergone substantial increases when final estimates have become available, the report pointed out.

Commenting on the dismal growth of the sector, Planning Commission member Abhijit Sen had said the final estimate for 2007-08 was revised sharply upwards from the second estimate, hinting at a possible rise in output in the final estimate this year too.

The report said a comparative crop tally with the year-ago period looks less discouraging and the advance estimates too point to a promising winter wheat crop.

���The kharif crop, which is harvested in the quarter ending December, shows that the production of the major crop ��� rice ��� has risen greatly, raising the total foodgrain production, despite falling output of pulses and coarse cereals,��� it said, adding that oilseeds and sugarcane production contracted, but less than that reflected in the third quarter GDP data.

The rabi crop, which is harvested in the January-March quarter, is showing a 6.3% Y-o-Y expansion in foodgrain output advance estimate compared to the advance estimate of last year led partly by the wheat crop. Releasing the second advance estimates for 2008-09, the agriculture ministry has pegged wheat production in India, the second-largest producer in the world, at 77.78 million tonnes this year.

The production of major coarse cereals has been projected lower by the centre at 33.13 million tonnes this year compared to 36.86 million tonnes in 2007-08. The output of pulses is expected to fall to 14.25 million tonnes from 14.76 million tonnes. Oilseeds production is projected to dip by about 13% to 25.96 million tonnes from 29.76 million tonnes last year.

Similarly, sugarcane production is projected to go down significantly to 290.45 million tonnes from 348.19 million tonnes in the review period.