Cloudy forecast

India's foodgrain output is expected to touch 250.42 million tonnes (mt) in 2011-12 – the first time it has ever crossed the 250-mt mark and also more than the previous year's 244.78 mt. The rise has, however, been entirely on account of the two fine cereals: Rice (from 95.98 mt to 102.75 mt) and wheat (86.87 mt to 88.31 mt). On the other hand, coarse cereals and pulses production have fallen below the record levels of 2010-11, with the same holding for oilseeds, too. It is thus a mixed bag, though still broadly in line with the ‘turnaround' in the fortunes of the country's farm sector from around 2005-06. These seven years have seen production of most crops – whether cereals, pulses, oilseeds, cotton and sugarcane, or even vegetables, fruits, milk and other animal products – register significant increases, compared with the perceptible stagnation during the preceding period from 1998-99 to 2004-05. This, in combination with higher prices and terms of trade turning more favourable for farmers, has gone some way in boosting rural incomes and helping the cause of consumption in general.

But all this could be a story of the past, as Indian agriculture seems headed for a difficult and challenging phase now. The main pressure points are fertilisers, diesel and labour, the costs of which have already gone up – and are set to rise even more, with a cash-strapped government likely to whittle down subsidies and labour shortages becoming increasingly widespread and structural in nature. Responding to them requires designing innovative mechanisation solutions, introducing customised fertiliser products delivering nitrogen or phosphorous more efficiently to plants, and promoting water- and energy-saving agronomic practices. These would not be as easy as simply raising minimum support prices. It calls for shifting government resources from consumption to investment and agricultural research, besides creating a policy environment inducing agri-corporates to engage in similar activity on their own, or through collaborations with state-owned institutes and universities.

A more immediate concern, though, relates to the monsoon. In 2010, the country received surplus south-west monsoon rains because of ‘La Nina' conditions associated with copious precipitation in the sub-continent. But an extended La Nina has also translated into a severe winter, so much so that temperatures are slated to rule below normal right through May. The problem that might arise is if it suppresses convection or the process of cloud-building. The resulting less-than-optimum heating of the land surface – coupled with a ‘negative Indian Ocean Dipole' phenomenon that sucks up even the limited convection away from the mainland – may hurt this time's monsoon prospects, according to a leading Japanese forecaster. That, if it turns out to be true, could reverse the current trend of low food inflation. The government should be alive to this possibility, even if the ample public grain stocks offer a silver lining of sorts.

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