The Hindu Business Line : Rabi prospects

EVEN AS THE kharif harvest gathers momentum, it is clear that actual output of several crops — rice, coarse grain, pulses, and oilseeds — will not only fall considerably below the target but also short of the kharif 2003 output. Going by the recent statement of the Agriculture Secretary, the Government is sanguine that the rabi production, especially of foodgrains — planting for which would begin next month, after completion of the ongoing harvest — would be so good as to make up for the kharif losses. Hope is a positive attitude and optimism a virtue. Policymakers often make statements laced with hope and optimism with the intention of sending out signals. There is possibly some belief that forecast of a higher output next season would help check speculative tendencies, given the sensitive nature of the agricultural commodity markets and the unabated pressure on the price front (inflation being stubbornly above 7.5 per cent). However, optimism cannot for long mask the ground reality.

According to India Meteorological Department, the South-West monsoon has ended with a 13 per cent deficiency in rainfall as at the end of September (All-India area weighted rainfall 777.3 mm actual against 889.3 mm normal). Regions that have received less-than-satisfactory rains include Punjab, Haryana, West Rajasthan, West and East Uttar Pradesh, East Madhya Pradesh, Vidarbha (Maharashtra), Telengana (Andhra Pradesh) and Kerala; many crucial for a good summer harvest. The Government has promised that a decision on the minimum support price (MSP) for various rabi crops would be announced before planting so that farmers can take an informed decision on what to grow. The last several years, the government failed to follow the basic principle of announcing the MSP before the planting season, denying farmers an opportunity to evaluate crop options.

By announcing MSP well in time, this Government would not be doing farmers a favour, it would only be doing a duty it ought to have always been doing. The Centre is keen that crop diversification happens from surplus fine cereals to deficit oilseeds. Whether MSP alone can encourage an acreage shift is debatable. Generally, under Indian conditions, higher prices do not automatically translate into higher production. The ability of farmers to raise productivity and thereby production is limited. Input supplies and marketing infrastructure have to be strengthened. Equally important is capacity building among farmers. If they have to benefit from the government's price signals and from the market, a mechanism to ensure delivery of information is required.

Without sounding alarmist, it must be stated that agricultural production growth in 2004-05 is likely to be subdued as a result of which import requirement of essential food items such as pulses, edible oil and sugar is expected to increase. Soft international prices of many commodities are bound to keep the lid on domestic prices. While that may be good news for consumers, it will not be for farmers. When the decline in output is not accompanied by higher gate prices, farm incomes will be hit.

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