The Hindu Business Line : Monsoon stress

With the output of pulses and oilseeds likely to be hit by an aberrant monsoon, it would be a tragedy if politics overrides the imperatives of the agricultural economy.

With all the political parties busy preparing for the impending vote of confidence in Parliament, there is a danger that a self-absorbed government may ignore the greater crisis brewing beyond New Delhi and across the country. It has nothing to do with politics, and everything to do with agricultural production, food inflation and livelihood in rural areas. The aberrant behaviour of the south-west monsoon over the last four weeks has led to a steady deterioration in the ou tlook for the impending 2008 kharif harvest. Revival of the monsoon may arrest a further slide but not repair the damage completely.

Two major food crops — pulses and oilseeds — are facing serious moisture stress conditions, especially in regions south of the Vindhyas. These are precisely the two crops perennially in short supply, necessitating large-scale imports. Importantly, the consumption demand for edible oil and pulses expands manifold during August-October because of a series of festivals. It is imperative that policymakers ensure there is no shortage of these two essential food items over the next 3-4 months. A visible dent in edible oil prices can be made only through large-scale import of refined palmolein, the cheapest refined oil in the world market today. The Customs duty (7.5 per cent) on refined oils deserves to be withdrawn, at least as a temporary measure, to support consumers and curb speculation over the availability and price of cooking oils during the festival period. As for pulses, the world market is already facing tight supplies. One can well imagine the effect on prices when India, the world’s largest producer, consumer and importer, begins to seek larger quantities.

There are phyto-sanitary clearance issues that need to be sorted out to ensure smoother inflow of pulses into the country. The State parastatals that enjoy a 15 per cent subsidy on pulses imports should be made accountable for their performance and their inventories closely monitored to prevent over-stocking. It is unclear why the Centre is still fighting shy of strengthening the Public Distribution System (PDS) by including edible oils and pulses. It is cruel joke on the poor that the government supplies a less essential food such as sugar through PDS, but not cooking oil and pulses. Wheat and rice buffer stocks with Food Corporation of India are a source of strength and must be deployed effectively. Sugarcane and cotton are two other crops whose harvest is expected to be sharply lower. Sugar prices have a strong upside risk in the new season beginning October. The impressive run cotton has had in recent years may be stalled in the ensuing season with lower output and negligible export surplus. The cotton textiles industry may need support. It would be a tragedy if politics overrides the imperatives of the agricultural economy and the poor.

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