New Delhi: The government needs to accord top priority to agriculture in the budget as a major shortfall in kharif production resulted in sluggish growth of farm sector in the second quarter this fiscal, Assocham said on Sunday.


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While the year-to-year agriculture GVA (Gross Value Addition) growth for the July-September quarter of 2017-18 dropped to 1.7 percent from 4.1 percent, measured on basic prices, the fall looks quite sharp at current prices from 10 percent to 3.7 percent.


It is attributed to a decline in food grains production by 2.8 percent in second quarter of the current fiscal from a handsome growth of 10.7 percent in the similar period of 2016-17.


The chamber observed that the shortfall in the second leg of the monsoon seems to have impacted the Kharif production.


"Besides, distress in prices of several agri-commodities would have also played a role in lower realisations as seen in the growth deceleration on the current prices," it said.


The chamber Secretary General D S Rawat said since more than half of the GVA in the farm sector is contributed by livestock, fishery and forestry, Finance Minister Arun Jaitley should particularly focus on these segments of the economy along with a major thrust on agriculture infrastructure like irrigation.


"With bulk of our population employed in the rural landscape, India's consumption led growth and investment cannot be realised unless the entire farm sector is pulled out of stress.


"Major part of India Inc is heavily dependent on rural demand which would remain subdued if immediate steps are not taken in the short term and medium term," Rawat said.


The chamber suggested that in the near term, farmers must be extended all help in the ongoing Rabi season and it must be ensured that adequate protection is given to them if market distortions creep in to their disadvantage.


"Timing is very important in agriculture and steps like import duty or export measures must be initiated well in time so that the benefits reach the farmers and are not pocketed by the intermediaries," it said.


According to Assocham, rural oriented companies in fertiliser, seeds, farm equipment, two-wheelers, FMCG, food processing would be vulnerable if the agriculture sector does not perform as well as other sectors.


"The argument that the lower growth in agriculture has come about on a high base of the previous year should not be a matter of consolation. If that situation is allowed, this show how there are serious issues with our farm productivity," the chamber said.