The Hindu Business Line : The fallout of moisture stress

As the 2007 southwest monsoon prepares to enter the withdrawal phase, 29 of the 36 meteorological sub-divisions have received excess to normal rainfall, while seven are in deficit. This is considerably better than the situation this time last year, but the temporal and spatial distribution of the rainfall leaves something to be desired. Several agriculturally important regions have had below-normal precipitation; and there is apprehension some others too would come into th e deficit category if one more round of heavy rainfall does not materialise soon.

The all-India area weighted data suggest the precipitation surplus has been shrinking. As of August 22 the rainfall surplus stood at just 3 per cent (actual rainfall 669.6 mm compared with normal of 652.1 mm) versus 5 per cent earlier. Eastern and western Uttar Pradesh, east Madhya Pradesh, Punjab, Haryana, Chhattisgarh and Rajasthan have all reported deficient rainfall. The next 2-3 weeks will be critical as many crops reach the maturation stage. Moisture-stress could potentially affect the already low yields. Given the acreage sown and extent of floods in many regions, it would be a surprise if the next harvest is a bumper one. If anything, Kharif 2007 may be no better than that of 2006. Worse, inadequate sub-soil moisture at the end of southwest monsoon can potentially hurt Rabi crop prospects too.

New Delhi needs quickly to take cognisance of the emerging scenario. Tightening crop availability will soon begin to drive the market higher, although harvest pressure on prices may be felt for a short period. The government knows only too well that the combination of stagnant farm output of important Kharif crops such as rice, coarse cereals, oilseeds and pulses, on the one hand, and rising demand for food (driven by income growth and demographic pressure) on the other, is a sure recipe for food-related inflation. The country’s poor can ill afford to stomach food-inflation any more. Importantly, the government has exhausted most of the supply-management and inflation-control instruments in its armoury. In sensitive commodities, exports have been banned, imports have been fully thrown open and tariffs considerably reduced, in many cases to zero. Any further tinkering with interest rates will draw howls of protest from the industry and services sectors. Policymakers will find their degrees of freedom to rein in inflation curtailed. Strengthening supplies of essential food items through the public distribution system and inclusion of pulses and edible oil in the PDS brook no delay. It would also prove to be politically expedient in the present climate of uncertain politics

Related Stories:
Rain surplus shrinks as weak monsoon looms large
Weakened flows pare rain surplus to 5%

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