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Finally, the guessing game is over! The Economic Survey has largely validated estimates of National Accounts Committee from two weeks ago. As analysts mine through the data, hopefully numbers will tell whether the economic growth rate during the outgoing year was saved by a sleight of hand, or an act of God.

It appears that the authors of the Agriculture section of the Survey have bought into the “highest-evers” narrative. Whether record grain output is also matched by record demand in a year of lockdown remains to be seen; however, a review of 11MFY21 trade performance indicates that it has certainly not translated into exportable surpluses, at least not yet. Thankfully, in his presser the FM shied away from echoing the claims of “unprecedented” output. Hopefully, continued signalling through strategic communication shall create room for imports later during the year if needed.

That the conversation is finally being pivoted towards “windfall profits for rural economy” is a welcome sign. In economics, large unexpected increases in supply and higher profits for producers rarely coincide. Especially in a sector where ‘low prices upon harvest’ and ‘lack of inventory holding power’ were common refrains until recently. As the Economic Affairs minister hinted, it is crucial that farm economics remains attractive for the average grower, but higher profits for producers often translate into loss of purchasing power for urban consumers.

Higher supplies, higher prices, even better profits, but lower demand hardly add up. If the reader is feeling particularly generous and seeks to make allowances, he (or she) may argue that ‘highest ever’ output does not mean self-sufficiency. Or that the combined effect of monetary and fiscal stimulus doled out last year have already turbo-charged demand, at least for agricultural commodities.

Whatever the case may be, a deeper look at the statistics shows that the improved output claim is backed by consumption of inputs. Urea offtake stands at highest ever, while surface water availability also improved over the previous year. Together, these two determinants may indicate that farm economy has staged a comeback.

Aggregate area under 17 important crops – as reported by The Survey – is only a percent shy of record cropped area of 19.8 million hectares, last achieved in FY15. That sets aside concerns of losing prime agricultural acres to urbanization and the scrouge of horizontally ever-expanding housing societies. But it also raises a dilemma for PTI’s agri czars.

If farmers have already brought maximum acreage under cultivation during the outgoing year, the only way to improve farm output during the remainder tenure will be to improve yield. And while the administration claims it is going to go after productivity improvement with all guns blazing, it is easier said than done.

If the recent debacle over early Kharif water releases between Punjab and Sindh is any guide, the reprieve from freak swings in irrigation availability may not last long. Considering the bleak forecasts of long-term effects of climate change, the damning performance of the cropping segment during FY19 may only be a preview for what awaits. In case productivity fails to match up with expectations due to water stress or other vagaries of the weather, the country will be hard pressed to find additional acres to keep agriculture’s growth momentum going.