Rural downturn

Rural India may well be faced with a triple whammy in the days to come: demonetisation, a poor North-East monsoon so far in south India and the likelihood of a mild winter impacting wheat and mustard yields in particular. So far, rabi sowing has been encouraging, with 32.7 million hectares having been covered so far this year, against 31.3 million hectares at this time in 2015. Wheat, pulses and oilseeds have led the increase. But it is important that demonetisation does not cause a poor agriculture year, negating the sanguine effects of a close-to-normal and largely well distributed South-West monsoon. For agriculture to achieve anywhere near the projected 4 per cent growth this fiscal, a lot needs to be done. To ensure that rabi operations proceed smoothly, cash flows must be restored on a priority basis. In order to lift farm sentiments and dispel the air of uncertainty, States should take a cue from Tamil Nadu and step in to procure horticulture produce, to begin with. The Pradhan Mantri Fasal Bima Yojana, based on about 80 per cent subsidised premiums, should be pushed for wheat and mustard, to guard against the possible caprices of weather. Rural India needs special attention now to offset the growth shock arising from small industry and services sectors.

Meanwhile, the persistent drought in large parts of southern India needs more policy focus than it has received so far. In Kerala and Karnataka, both the South-West and North-East monsoons have failed miserably. As a result, as many as 110 talukas in Karnataka have been declared drought-hit. Northern and southern interior Karnataka have reported a rainfall deficit of 76 per cent and 83 per cent respectively over normal levels in October and November, while the deficit in Kerala and coastal Karnataka has been above 60 per cent for these two months. Tamil Nadu too has seen a deficit of 69 per cent in this period. North Karnataka suffered kharif and rabi crop failure last year as well. The State government has sought to focus on saving livestock, while petitioning the Centre for crop loan waiver. The Centre and State governments should implement the new crop insurance policy on a war footing rather than seek to score political brownie points over the crisis.

A prolonged drought often manifests itself in conflicts over water. Here, there is little to suggest that State and local governments have learnt the right lessons from past experiences. While the political class is engaged in trying to cash in on popular sentiment, coherent policy responses are not readily visible, either to deal with agriculture, or the growing water crisis in urban areas. The lessons of the searing water shortage in Karnataka and Maharashtra earlier this year should not be forgotten. It is time to take a long-term view of cropping patterns and water use along the Cauvery basin. Agriculture needs immediate attention on a range of issues, going well beyond restoring transactional normalcy in the rural economy.

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