India received the record monsoon in 25 years, set to boost agricultural yields. Specifically, it is estimated that wheat production will reach a new high in 2020. This would aid in reaching the annual record produce for second consecutive year.
Record Monsoon in 25 years
The nation’s monsoon rainfall during the months of June-September was at 10% above average. Further, the downpour continued through the months of October and November, thereby increasing the water table. In addition, the water levels in the country’s reservoirs increased to 86% against 61% in 2018. Accordingly, the government highlighted that this is a new high compared to the usual 64% average in the last 10 years. Wheat production likely to hit a new high in Rabi crop harvest season of 2020.
Effects of Record Monsoon
Industrial officials suggested that record monsoon is all set to expand the cultivator’s land under the winter-sown crops. Alongside, to improve the yields of the same. Gyanendra Singh, director of the Indian Institute of Wheat and Barley research added that it is obvious to expect a yield more than the previous year. India produced a record 102.19 million tonnes of wheat in 2019, which is 99.87 million tonnes in 2018. Additionally, wheat stocks stand at 37.4 million tonnes as of November 1, which is 13% higher than the previous year. High wheat production in 2020 would also be due to government’s increase in MSP.
MSP Effect
For the second consecutive year, India raised the MSP by 4.6% to Rs 19,250 per tonne. Government buying from local farmers at elevated MSP certainly increases the benefits and attracts farmers to sow more wheat. However, this will has a negative impact on foreign trade as Indian wheat remains noncompetitive internationally.
According to the data released by the government, India exported 226 tonnes of wheat in 2018 and 255 tonnes in 2019. Compared to the 6.5 million tonnes of export in 2012-13. The combination of high production, minimal export and high wheat stocks at FCI might urge the government to increase exports.
Wheat output likely to hit new high after record monsoon and farmers in India would benefit significantly.