The Hindu Business Line : Monsoon effect

The south-west monsoon has officially begun to withdraw from Rajasthan and northwest parts of the country, albeit after an extended run in peninsular India, where it has been one of the most satisfactory in recent years. The all-India area weighted rainfall till the last week of September was 5 per cent above normal with 30 of the 36 meteorological sub-divisions recording normal to excess rainfall — an improvement over last year. Soil moisture conditions in most part s of the country are satisfactory. The Agriculture Ministry’s preliminary estimate of kharif 2007 crops is a mixed picture, though. Overall, the major kharif crops have performed well; but farm production is hardly bumper. If anything, at 80 million tonnes and 345 million tonnes, rice and sugarcane output respectively is unchanged from last year, while oilseeds and pulses have merely rebounded from last year’s decline.

On the positive side is a record maize (13.07 million tonnes) and cotton (30 million bales) output. Yet that does not seem to be enough. Rising incomes and demographic pressures are expanding consumption demand and causing supplies to tighten. Firm prices are a natural corollary, and global price trends point in the same direction. Contrary to popular belief, the high prices of a number of agricultural commodities in the past year failed to increase production substantially. Once again, this underlines the little appreciated fact that under Indian cultivation conditions, the supply response to prices is generally weak. The average Indian farmer faces far too many risks and uncertainties in his calling, and higher market prices alone cannot influence farm output markedly.

Importantly, the oncoming rabi season may prove worrisome. Soil moisture conditions are less than ideal in the north. Moisture deficiency in the main grain and oilseed growing regions of Punjab, Haryana and Uttar Pradesh means production prospects will depend on winter rains and favourable temperatures, especially for wheat. The whole of Rajasthan, Western Madhya Pradesh as also parts of Maharashtra and Andhra Pradesh could also be prone to some moisture stress in the rabi season. Competition for acreage among fine cereals (wheat), oilseeds (rapeseed/mustard) and pulses could get worse. As farmers favour the crop they are comfortable with in terms of agronomic practices and price expectation, an early announcement of the minimum support price for rabi crops will be of help in optimising the cropping pattern. With global grains and oilseeds markets ruling firm, reliance on high-priced imports may prove counter-productive. Therefore effective monitoring of input supplies is necessary to keep inflation under control.

Related Stories:
Deficit rainfall in North, northwest
Kharif foodgrain output pegged at 112.24 mt
Grains output estimated at record 216.13 m tonnes

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