Higher price to help up to 12% growth in farm profits: Report

Even as lower crop output is estimated following uneven distribution of monsoon, the farm profit is expected to increase by up to 12 per cent in the kharif season 2019, due to higher prices, according to a report. "Farm profit from field crops is expected to increase 10-12 per cent in this kharif season because of expected higher prices and despite lower output," according to Crisil Research's Agriculture Report 2019.

After three years of healthy growth, kharif output this year is likely to decline by 3-5 per cent due to lower sowing, acreage and yields, which was impacted by uneven distribution of rains, the report said. Delayed onset of monsoon has already led to a sharp 6.4 per cent decline in paddy sowing as on August 22, 2018, it said.

Paddy accounts for over 30 per cent of kharif season acreage, it added. However, area under cotton and maize crops will be higher than the previous season following growth in prices, which encouraged farmers to sow these crops, the report said.

Floods in Maharashtra, Odisha and Andhra Pradesh and weak rains in West Bengal and the Marathwada region of Maharashtra are expected to affect productivity. Additionally, high-intensity rainfall in August is likely to increase pest attacks on maize and paddy further impacting farm output.

"The quick catch-up in southwest monsoon has meant excess rains in August in a few sub-regions. This has affected kharif crops, particularly paddy. But abundant rains have also improved chances of healthy rabi production because of recharging of groundwater resources and higher reservoir levels," Crisil chief economist Dharmakirti Joshi said..