Lopsided growth in rabi cultivation

by Mitika Malhotra

Area under rabi cultivation expanded by 5.6 per cent year-on-year to 17.8 million hectares as on 11 November 2022. The increase has raised hope for this season’s rabi crop coverage to exceed the record acreage witnessed in the 2021-22 season. But, early data shows that the rabi crop coverage is highly skewed, even among key agrarian states.

The 5.6 per cent year-on-year increase seen by the week ending 11 November 2022 comes over a 4.2 per cent decline in acreage during the corresponding period last year. Last season, it was only in the closing weeks that the sowing activity gathered momentum, ultimately pushing the season’s rabi acreage up by 1.5 per cent y-o-y to a record-high of 70 million hectares. We expect that the magnitude of growth seen till 11 November will shrink in the coming weeks. Also, the growth in area under cultivation seen this year has been driven almost entirely by a single state - Rajasthan. Gujarat, Tamil Nadu and Uttar Pradesh have also seen a modest increase in area under rabi cultivation. However, rabi cultivation is lagging in some key agrarian states such as Haryana, Karnataka, Madhya Pradesh, Maharashtra and Punjab.

Area under rabi cultivation in Rajasthan rose by 31.4 per cent y-o-y to 5.7 million hectares by 11 November 2022. Farmers in the state commenced rabi sowing activity early and have already brought 73.5 per cent of the normal area sown under cultivation. This proportion stood at 57.7 per cent during the corresponding period last year, when the state saw record area brought under rabi cultivation. Area sown under all three major rabi crops wheat, gram and rapeseed & mustard has increased y-o-y in the state.

Rajasthan is the largest cultivator of rapeseed & mustard in the country. Area under cultivation of rapeseed & mustard in Rajasthan grew by 20.8 per cent y-o-y to 3.3 million hectares by 11 November 2022. In 2021-22, the state had seen record cultivation of the oilseed in the rabi sowing season at 5.7 million hectares. We had expected area under cultivation of rapeseed & mustard in Rajasthan to shrink in the current season. However, looking at the current trend in sowings data area under rapeseed & mustard cultivation is likely to remain at levels similar to last year. Owing to the increase in Rajasthan, area under rapeseed & mustard cultivation at the all-India level expanded by 14.9 per cent to 5.5 million hectares. This was over 87 per cent of the season’s normal area sown usually covered with rapeseed & mustard.

Area under cultivation of wheat and gram has also increased. However, the growth in acreage seen in both these crops comes over a low base. Area under wheat cultivation rose by 9.8 per cent to 4.5 million hectares. This increase comes over a decline of 10.5 per cent during the corresponding period last year. Moreover, the growth in wheat acreage is driven entirely by Rajasthan and Uttar Pradesh. Sowings of wheat in key producing states of Haryana, Madhya Pradesh and Punjab is lower than last year. The gap in area under cultivation in Haryana was large with a year-on-year deficit of 19.4 per cent. The shortfall in Madhya Pradesh and Punjab was smaller with a y-o-y fall of 3.7 per cent and 3.5 per cent, respectively. Harvesting of the kharif rice crop was delayed in these states by a fortnight due to excess rains during the last week of September. We can expect rabi sowing activity to pick up in the subsequent two weeks in these states.

We expect area under wheat cultivation to increase over last year in the current rabi season. Wheat acreage fell by nearly one per cent in 2021-22. A shortfall in wheat availability in the domestic and global markets last year led prices to spiral since November 2021. Wheat price in the domestic market stood at record-levels at Rs. 2,458 per quintal during the week ending 12 November 2022. Remunerative prices, along with good soil moisture levels due to excess rains in the last week of September is expected to benefit wheat cultivation.

Gram acreage has increased by one per cent year-on-year to four million hectares by 11 November 2022. The growth seen in gram acreage is entirely led by Rajasthan and Karnataka - the largest cultivators of the pulse. On the other hand, area under gram cultivation in Madhya Pradesh fell by 25.3 per cent y-o-y. The magnitude of fall in the state is likely to narrow down in the coming weeks. However, gram cultivation is likely to remain lower than last year in most states as farmers are expected to shift to cultivation of wheat given the remunerative price of the crop.

Sowings in the ongoing rabi season are likely to remain similar to last year’s record acreage of 70 million hectares. We expect the skewness seen in the crop coverage in the week ending 11 November to correct in the coming weeks as all factors that could influence sowing activity are conducive. Excess showers in the last week of September 2022 have helped improve soil moisture levels in key agrarian states. The government has doubled the fertiliser subsidy to Rs. 518.8 billion from the budgeted Rs. 210 billion for the ongoing rabi season to partly offset the recent spurt in prices. Reservoir levels are healthy at 87.3 per cent of live storage capacity as on 10 November 2022. This is much higher than the average live storage of 73.5 per cent during the corresponding period. Lastly, commodity prices for most rabi crops are elevated and this should incentivise farmers to undertake rabi cultivation.