A welter of problems may be in store for the country
These are testing times for the Narendra Modi government in the farm and food sector: the south-west (June-September) monsoon is delayed, deficient and weak; kharif sowing, much of which is rain-fed, is lagging by over 17 per cent over last year; rising food prices are pushing up inflation and pulling down growth. Right now the prices of only perishable food items are showing a rising trend, but soon essential commodities such as pulses and edible oils, in which the chronic shortfall in supplies is met from imports, will feel the impact. Hoarding for speculation, if unchecked, will play the Devil.
What makes it worse for the government is that some of the states like Maharashtra, Punjab and Haryana that will remain deficient even if monsoon covers the entire country, are slated for Assembly elections in October. Delhi, which may also face elections this year, may not be significant in terms of agriculture output, but it is the opinion maker for any price hike in perishables and essentials. Mr. Modi’s home state of Gujarat will also take a hit this year impacting output of oilseeds and cotton. Other areas that are estimated to face drought partially or wholly are Jammu and Kashmir, Uttar Pradesh, Rajasthan, Madhya Pradesh, Odisha, Andhra Pradesh, Karnataka, Tamil Nadu and Lakshadweep.
July is crucial for sowing, but if the SW monsoon remains sluggish and scanty, then problems like availability of drinking water, fodder for livestock and migration of people from affected areas may build up. Irrigated states will require higher use of power and delve deeper for ground water involving subsidy for diesel. If a drought develops then farmers would require rescheduling of credit returns or even a waiver as Union Minister Venkiah Naidu is demanding for Andhra Pradesh and Telangana farmers.
Indications of delayed and below-normal monsoon and the likely El Nino effect in the kharif months of August and September came in April itself. In fact last year too kharif sowing was delayed but after that came the deluge and the Himalayan tragedy in which several thousand people lost their lives. But in the country there were good rains in rabi as a result of which the country is expecting a record foodgrains production of 262 million tonnes this year.
In fact, the overflowing granaries on the back of good monsoons in the last five years, is the silver lining for the government. The foodgrains stock in the central pool was 28.2 million tonnes of rice and 41.6 million tonnes of wheat on June 1. This total stock of 69.8 million tonnes is against the total buffer requirement of 31.9 million tonnes on July 1.
Though monsoon is for now 45 per cent deficient all over, its progress and intensity is a major concern. In recent times the drought of 2002-03 was one of the worst when 21 sub-divisions got scanty rainfall and foodgrains production fell by a whopping 38 million tonnes. Then in 2004-05, 13 sub-divisions got scanty rainfall during kharif resulting in production loss of over 14 million tonnes compared to the previous year. The previous UPA government had a lucky run with the monsoon till 2009-10 when the rain was delayed and unevenly distributed but later the deficit was made up as the monsoon was withdrawing.
Fuel driven inflation
In fact, despite high foodgrains output in 2009-10 and the previous 2008-09 (with high foodgrains output of 234 mt) inflation galloped to 12.8 per cent mostly on account of high fuel and food prices. The UPA government never got the better of inflation during its entire second term despite the country’s farmers recording high foodgrain output from 2008-09 onwards, with farm growth averaging at 3.6 per cent in the 11th Plan. The third advance estimates for 2013-14 have put foodgrain output for this year at an all-time high of 264.38 million tonnes.
The challenge for the new government in this deficient monsoon year, therefore, is to ensure that inflation is contained and income generating opportunities are created in rural areas where employment in farming and allied activities is as high as 58.2 per cent.
The government is planning a Prime Minister’s Rural Irrigation Scheme and a Crop Income Insurance for Farmers. But these are long term plans. In the immediate, the need is really to crack down on hoarders and to impress upon states to move fast with Contingency Plans, to make available credit, seeds, fertilizers and above all, extension services to farmers.
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