India's real agriculture Gross value added (GVA) growth is projected to rise 1.1 percent in 2015-16, despite below-normal monsoon last year, says a Nomura report.
According to the Japanese financial services major, the ongoing diversification in the agriculture sector has reduced volatility in agriculture output and farm incomes.
The composition of Indian agriculture continues to change and from a largely foodgrain (rice and wheat) dominated sector, the importance of other core and ancillary activities, such as horticulture and livestock, has risen.
A reduced dependence upon foodgrain output over time is one of the main reasons why volatility in agricultural GDP growth has moderated, the report said.
"Indeed, despite below-normal monsoon rainfall in 2015, real agriculture GVA growth is projected to rise 1.1 percent in FY16," Nomura said, adding that "diversification has smoothened farm income cycles and supported higher farm incomes over time".
Horticulture crops, which include fruits, vegetables, flowers, spices and other plantation crops, have become particularly important.
"We estimate that output growth in horticulture has outpaced foodgrain, and resulted in a share increase to 52.8 percent in financial year 2015-16 from 46.7 percent in financial year 2005-06, while the share of foodgrain has fallen to 47.2 percent from 53.3 percent," the report said.
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