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Droughts Not Only Considered Grave Risk for Agriculture but Also for Industry, Government Finances

India's agriculture has become more resilient to monsoon-related shocks on the back of wider irrigation coverage, better quality seeds and timely weather related information

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droughts, water crisis
Poor rains in July will worsen the prevailing drought-like situation in the country. Wikimedia Commons

Weak monsoons — long known as a nightmare for farmers — is no longer just considered a grave risk for agriculture but also for India Inc as well as government finances. In recent years, while farmers have been protected by various government interventions, it is India Inc that has felt the direct impact of below-average rainfall. The Indian economy, reeling under a consumption slowdown owing to farm distress, stagnant wages and high interest costs, will be hit hard by such a weather phenomenon.

“India’s agriculture has become more resilient to monsoon-related shocks on the back of wider irrigation coverage, better quality seeds and timely weather related information. However, a monsoon shock may still cause a drop in agricultural income which could be minimised by government policy intervention,” said India Ratings and Research (Fitch Group) Director and Principal Economist Sunil Kumar Sinha.

“But in hindsight, FMCG and automobile sectors which look for their incremental growth from the rural sector will get impacted, especially at a time when agrarian distress is already pronounced, visible and impacting consumption demand.”

droughts
In recent years, while farmers have been protected by various government interventions, it is India Inc that has felt the direct impact of below-average rainfall. Pixabay

According to Skymet CEO Yogesh Patil, though crops like cotton and pulses will suffer from a poor monsoon and the demand-supply gap will aid in lifting farm output prices, nevertheless, industries as diverse as banking, petroleum (diesel), FMCG, automobiles will suffer from it.

“Consecutive below normal monsoon will result in lower loan disbursal, strained loan recoveries and rising NPAs (non-performing assets) and it will definitely put strain on major rural sector lending banks and NBFCs,” Patil told IANS. “Diesel consumption will also take a hit in such a scenario of below-average monsoon.”

Besides inducing a slowdown in demand, the weather phenomenon can also change the composition of the government’s budgetary commitments — as funds earmarked for capital expenditure might be diverted to implement schemes to protect farm incomes.

“Even the government’s fiscal management might get affected as more resources will be required to support the farm sector,” Sinha said. In any case, the need for comprehensive fiscal support measures will grow louder as a slowdown has become evident in sectors such as automobile, FMCG and aviation.

droughts
India’s agriculture has become more resilient to monsoon-related shocks on the back of wider irrigation coverage, better quality seeds and timely weather related information. Wikimedia Commons

The automobile sector has been impacted the hardest and a weak monsoon might accentuate this slowdown. Off-take data for May paints a grim picture with domestic passenger car sales down 26.03 per cent to 147,546 units.

ALSO READ: UN: 5.4 Million Face Food Shortage in Somalia Due to Climate-Related Droughts

In the commercial vehicle segment which is a key indicator of economic activity, domestic sales were down by 10.02 per cent to 68,847 units last month. Similarly, overall sales of two-wheelers, which include scooters, motorcycles and mopeds, edged lower by 6.73 per cent to 1,726,206 units. Consequently, slipping demand has forced OEMs (original equipment manufacturers) to curtail production thus stalling hiring levels and wages.

“Automobile sector, just like any other consumer driven sector, is highly dependent on rural demand and in turn monsoons, as it is the most important factor which determines the rural spend for the entire year,” said Grant Thornton India Partner Sridhar V. (IANS)

Next Story

Widespread Agricultural Distress: Hyderabad Social Entrepreneur Uses Big Data To Change Farmers’ Lives

The app, which provides all farming-related information and communication in Telugu on a single platform, is significantly reducing the time and cost of cultivation for a farmer in real time.

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crops
The startup, which can sustain for next six months on its own, is receiving proposals from different investment companies and Naveen says he will go with whoever is close to his idea. Pixabay

At a time of widespread agricultural distress caused by successive droughts, unremunerative farming and debt-trapped rural economies, a young man with his mobile app is showing how change can be brought in the life of farmers at the grassroot level.

In 2016, V. Naveen Kumar, who had no personal knowledge of agriculture, was so moved by the suicide of a farmer in a village in his native Warangal district of Telangana that for the next three months he ran around like a man possessed, meeting farmers to understand their problems. He interacted with agri-entrepreneurs and other stakeholders to find if there is a way he can bring some change in the lives of the financially besieged farmers.

Today, over 1.24 lakh farmers in Telugu-speaking states of Telangana and Andhra Pradesh use his mobile app NaPanta to avail a host of services, all free of cost. And this MBA degree holder is satisfied that he is contributing his mite to bring some change in the way they practise agriculture.

NaPanta, which was started in June 2017, saw, surprisingly, thousands of farmers download the app. The launch of the pocket-friendly Reliance Jio and the boom in use of WhatsApp brought more people on the platform.

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While the information on app will clear regular doubts of farmers, for specific doubts a farmer can ask questions to a panel which includes agriculture scientist and experts.
Pixabay

The app, which provides all farming-related information and communication in Telugu on a single platform, is significantly reducing the time and cost of cultivation for a farmer in real time.

“I am confident that if farmers follow my platform, they will be able to save 20 per cent on expenditure and get 10 per cent extra yield. We can make 30 per cent difference,” V. Naveen Kumar, Founder and Managing Director, NaPanta, told IANS.

While the country has many apps to help farmers, there is no single app covering the entire gamut of agriculture activity ranging from selection of crops to locate the market offering highest price for their produce. From advisory services and weather information to market prices and e-commerce, the digital platform offers the comprehensive agri eco-system.

The app has tools like crop expenditure (which helps farmers track their expenses in an organized manner), crop protection, weekly agro advisory, agri forum, market price, agri e-commerce, crop insurance, weather, food processing technologies, and soil testing information.

A farmer can also buy or rent an agri-equipment as per the requirements of his crop cycle and can also sell his produce for the highest price without any middleman.

The app also allows farmers to access real-time and dynamic information pertaining to daily market prices of 300 agri-commodities across over 3,500 markets, along with three-year price trend.

Currently available in Telugu and English, NaPanta App provides complete pest and disease management details, covering 90 crops and with suggestions about 3,000 pesticide products.

Naveen Kumar, who earlier worked as a Credit Relationship Manager in ICICI Bank and later as Credit Risk Manager with HDFC Bank before co-founding apnaloanbazaar.com, a retail loan distribution services portal, says he is trying to build core competence among the farmers.

According to him, for all their requirements, small and marginal farmers depend on third parties like distributors of the companies.

“With no knowledge of agriculture practices and requirements of a particular farmer, they try to push their products for some extra profit and as a result the farmers either suffer crop losses or end up incurring huge expenditure.”

With agriculture extension officers of the government more focused on clerical related activities rather than extending actual help, he believes there is a huge gap between farmers and the government initiated activity.

“Farming is not depending on a single advisory. It is a combination of various services. We identified all that a farmer needs in day to day life and ensured that he has easy access to the advisory so that whenever he gets a doubt, he can get it cleared then and there,” he said.

Naveen said several states including Maharashtra and Tamil Nadu were showing interest in the platform. The app will be available in Hindi and Tamil in June-July this year. “If everything goes well in next 3 to 5 years, we will have our presence in 7-9 states,” said Naveen, who heads a five-member team.

While the information on app will clear regular doubts of farmers, for specific doubts a farmer can ask questions to a panel which includes agriculture scientist and experts.

NaPanta, an incubatee of International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) also gets the institute’s help in business activity, reaching the farmers and engagement with agri-input companies.

farmers

“With no knowledge of agriculture practices and requirements of a particular farmer, they try to push their products for some extra profit and as a result the farmers either suffer crop losses or end up incurring huge expenditure.” Pixabay

The startup, which can sustain for next six months on its own, is receiving proposals from different investment companies and Naveen says he will go with whoever is close to his idea.

With huge amount of data being generated on the digital platform, Naveen embarked on building big-data architecture with crowd-sourcing information. It is building database with information on major crops in a particular area, major insects which affect a crop, cropping system, sequential cropping model, pesticides and where the farmers sell their produce.

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He is confident that this data will be a goldmine in the coming years.

“This kind of crowd-sourcing information is not available in the agriculture sector in India. We are getting information from actual farmers and not third parties.” (IANS)