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ECONOMICS & POLITICS/TRACTOR INDUSTRY

Indian Agriculture and TractorIndustry Update: July 2012

Posted onJuly 30, 2012byBHUWANCHANDLeave a comment

I ndian Agr icul ture and Tractor I ndustry Update: Jul y 2012

Overview of current Demand & Supply side factors indicates a moderate growth (8-10%) scenario for 2012-13 tractormarket in India.

TheAgriculture sectorinIndiastill has tremendous growth potential but the monsoon 2012 has been lower than normalin the key contributing Tractor Market (UP,Gujarat, Rajasthan, MP, Haryana, Punjab), triggering concern on drought3333like situation in some states.

Govt.support for Agriculture sector in terms of significant increase inMSPscontinue

Growth of non-agri usage may improve as the Govt. is expected to focuses on Infrastructure development as key area torevive theEconomic Growthin India.

The policy paralysis and visible lack of governance is as much, if not a bigger, reason for this gloomy outlook as thedeficient monsoon.

Demand SideFactors Agriculture Sector: Deficient monsoon: A big cause of concern

Major crop output to fall by 0.5% in 2012-13: CMIE

Major crop production is projected to decline in 2012-13 by 0.5%, owing to a fall in output of non-foodcrops like soyabean, cotton and rapeseed, theCentre for Monitoring Indian Economy(CMIE) said in itsmonthly report.

Cotton production is expected to fall by 7.8% to 32.2 million bales in 2012-13 even though the acreage roseby over 12% to 29.3 lakh hectares by June.

We expect the cultivation to slow down and settle at level lower than last year. Hence, a fall in acreage isexpected to limit production in 2012-13, it said.

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Kharif cultivation of foodgrains and oilseeds has been sluggish due to delayed rains.

Weak precipitation has dampened the Central governments efforts and kharif sowing have been undertakenon a mere 127 lakh hectares by June 29, lower by 12% year-on-year, it said.

The Prime Ministers Office has sounded an alert over a deficient monsoon

Directing ministries to help states facing drought-like situations by operationalizing contingency plans todistribute seeds, augment fodder and power and deal with drinking water shortages.

Food min ister K V Thomas indi cated that drought is impending in M aharashtra, Guj arat, Karnataka

and western Raj asthan.

PMO is monitoring the progress of the kharif season on a weekly basis. There is a reduction of eightmillion hectares in crop area sown compared to last year, the release says.

Thomas feels rice production will not be majorly impacted. Food grain production and sugarcane willremain more or less the same. The problem is with pulses and oilseeds. These are the two crops, where

production will come down, he said.

Sowing of coarse grains like millet, jowar and ragi is short by 30 lakh hectares compared to normal andthis is unlikely to be made up.

There are concerns over the paddy crop in Haryana, Punjab and UP

AlthoughIndian Meteorological Departmentwhich predicted a normal monsoon this year allows for a4% plus-minus error in its predictions, PMO has spelt out this year rainfall is likely to be at the lowerend of the range or around 92% of LPA

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