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Wednesday, Jul 14, 2004

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Drought threat?

A MONTH AND half into the four-month-long South-West monsoon cycle, moisture-stress is threatening to affect agricultural production in the ongoing kharif season in several parts of the country. July is usually the rainiest month and crucial for such kharif crops as paddy, coarse grains, cotton and oilseeds. But precipitation in the first half of July has been alarmingly inadequate. According to India Meteorological Department, as of July 7, 12 of the country's 36 meteorological sub-divisions got deficient rains. And if anything, the situation has worsened in the last few days. Parts of Rajasthan, Madhya Pradesh, Gujarat, Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu have received below-normal precipitation. Because of the lull in the monsoon the area planted with paddy, coarse cereals, oilseeds and sugarcane is lower than this time last year. In early-sown areas, germination, especially of oilseeds, is reported to be affected, necessitating replanting. Additional area coverage and replanting wherever necessary will depend on the revival of monsoon besides, of course, availability of short-duration seeds and fertilisers. It is a matter of relief that there are no reports of pest attack. The IMD is sanguine about the monsoon revival; there is understandable anxiety as much among the farming community as in government circles. Surely, it is premature to say all is lost and write off agricultural growth this year, but there is no denying the cause for concern.

On current reckoning, considerable deceleration from the high farm growth of last year looks imminent. Even if there are widespread rains, the adverse impact of the erratic monsoon so far can unleash inflation. It is time the Government started to implement its contingency plans, and not wait for the situation to worsen, as happened in 2002. Year before last, when the country suffered its worst drought in decades, the Agriculture Ministry, inexplicably, failed to acknowledge the situation and delayed initiating contingency measures by several days. The Centre needs to work with State governments to ensure availability of seeds for planting and fodder for cattle. Buffer-stocks should be put to most effective use. Equitable distribution of rice and wheat across the country and larger allocation for the public distribution system can contain inflation expectations. To meet the manifold rise in demand in the festival season ahead, besides private imports, edible oils may be imported on government account for supply through the PDS. Raw sugar imports (of 7-8 lakh tonnes) are sure to help tide over the shortage and rein in prices too.

The ideological leanings of the Government's coalition partners are well known. While monitoring the price situation and taking consumer-friendly measures, the Government should consciously resist the temptation or the political pressure to bring back controls or restrictions on commodity trade and markets. Contrary to claims, the economy is not exactly drought-proof. Unsteady farm output and unremunerative prices continue to be the bane of Indian agriculture. As lower farm growth can retard overall economic growth, policy-makers must ensure that hardships arising out of the exigent situation are mitigated.

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