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G. Chandrashekhar

Mumbai, July 2 If a poor 1.6 per cent rate of growth in the agricultural sector for 2008-09 is of serious concern, the situation betrays no sign of improvement this year which has witnessed delayed onset of southwest monsoon.

Although officially the monsoon has covered major parts of the country, the agricultural situation fails to inspire confidence. It may be too early to talk about output estimates or even crop acreages. But the progress of sowing so far has been tardy. A significant damage to kharif crops can be contained only if the monsoon behaves well in the next three months.

Krishi Bhawan is in a quandary. That it is still groping for direction is evidenced by the delay in the announcement of minimum support price for various crops. When the council of ministers was formed by mid-May, there was hope that MSP would be announced before the onset of monsoon, that is, before June 1; but we are now in July.

A tough challenge before the new government, ready to present its first Budget, is to ensure adequate availability of various food commodities and contain price rise. Timely and effective market intervention by releasing large buffer stocks of rice and wheat and ensuring delivery of grains and other foods under the public distribution system must be policymakers’ top priority.

It is not enough to supply wheat, rice and sugar. The food basket will not be complete without pulses (provide vegetable proteins) and edible oil (provide calories), the prices of which have begun to spurt.

The Economic Survey admits 2008-09 farm growth rate was 1.6 per cent. It was clear even as early as September/October2008 when kharif production of various crops was down significantly from the previous season. Crops affected included coarse cereals (down 3.5 million tonnes), pulses (down 1.4 mt), oilseeds (down 2.5 mt), sugarcane (down 60 mt) and cotton (down 1.5 million bales).

By no stretch of imagination could the rabi crops have made up for the kharif shortfall.

There is growing apprehension in the industry and trade circles that the ongoing kharif season may mirror the output levels of last season. This can potentially unleash speculative tendencies.

Instead of waiting for completion of sowing and clarity on crop size which may be available by mid-August, it may be advisable for the Government to begin planning measures to counter output shortfall in sensitive commodities such as pulses, sugar and cooking oil. The next four months are going to prove tough. Food inflation already at elevated levels has the potential to rise further. The poor would be the worst hit.

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