The CLSA Research Team did a tour of MP, UP and Chattisgarh and here is the ground reality about the Agriculture sector in these states.
In Madhya Pradesh, the area under sowing this year has declined by 20-50% in different regions thanks to poor monsoons. Further yields are expected to decline significantly. A villager mentioned a 50% drop in his farm – may be exaggerated but reflects the expectations and the mood.
In Uttar Pradesh the crop is expected to be decent. The only worry that we heard about was the mild winters which will likely result in lower yields than normal. In West Bengal the potato crop has been damaged (the state accounts for 25% of India’s production).
With Uttar Pradesh, Punjab and Haryana (c.68% in aggregate) being the major producers of wheat, poor crop in Madhya Pradesh (c.9%) is unlikely to have a major adverse impact on wheat production in the country. However, Madhya Pradesh accounts for c.21% of oil seeds production in the country and the poor crop will likely have a significant impact on the same. Overall the picture is clearly mixed with risks to the downside.