Mumbai: The country's agriculture growth is likely to remain muted at 1 percent in FY'2015 largely due to strong statistical base-effect, rating agency Crisil said Monday.
Monsoons are currently 24 percent below the long period average, which is worse than the deficiency seen in fiscals 2009 or 2012. While 2009 turned out to be a drought year, rains recovered sharply in the latter half of the season in 2012.
"This year, we believe there is a higher probability of a turnaround - just like in 2012. This is consistent with the IMD forecast of rainfall deficiency reducing to less than 10 percent by the end of the season.
"But despite the recovery, we believe that agriculture growth will remain muted at 1 percent in fiscal 2015 as a strong statistical base-effect from last year's growth will kick in," the agency said in a report here.
Moreover, some damage to sowing has already taken place with pulses and coarse cereals likely to be the most severely impacted. The only saving grace is rice, which alone accounts for 70 percent of food grain production and has been less impacted due to better rains in the North East, it said.
Deficient rainfall has affected the sowing pattern. As of July 25, rice sowing was 16 percent below normal compared with 43 percent for coarse cereals, 33 percent for pulses and 17 percent of total oilseeds, Crisil said.
As July and August are the critical months for sowing, the weighted sowing deficiency as of August-end is a strong indicator of kharif foodgrain production in any year. In FY10 and FY12, as the weighted sowing deficiency improved by end of August, food grain output rose sharply, even managing to surpass the long-term average of 114.8 million tonne, it said.
This year, too, if rains pick up in the coming weeks, foodgrain output may not be severely impacted. But the high growth of last fiscal will mean the statistical Y-o-Y trend in farm output will be flat - just the way it was in 2012-13, when production recovered but agricultural growth came in at 1.4 percent following up on a 5 percent growth in 2011-12, Crisil said.
After a bumper agricultural growth last year, fiscal 2015 has been tepid. In June, IMD forecast a 33 percent probability of deficient monsoon and 38 percent chance of a sub-normal one, it added.
