A combination of factors — from a tricky monsoon to farmers shifting to alternative crops — has resulted in a 35.46 lakh hectares (lh) lower kharif paddy sowing in India this year compared with last year, and there are visible signs of the rice trade pressing the panic button.
The Indian kharif paddy situation has been compounded by developments in Bangladesh, where the Sheikh Hasina Wazed government has banned exports of all varieties of rice and buyers there trying to lay their hands on available stocks in India.
However, trade experts and exporters say there is no cause for worry since the country always carries over at least 30 per cent of the production to the next season. A lower production could at the most cut this carryover, they said.
35 lh drop in area
According to the Ministry of Agriculture and Farmers Welfare, sowing of paddy as of July 29 has been completed on 231.59 lh against 267.05 lh a year ago. The 35 lh drop is on account of the acreage being lower in Andhra Pradesh (by 0.5 lh), Assam (1.40 lh), Bihar (5.61 lh), Chhattisgarh (2.37 lh), Jharkhand (4.72 lh), Odisha (2.60 lh), Telangana (4.06 lh), Uttar Pradesh (6.68 lh) and Bengal (10.6 lh).
This is because the spread of monsoon across the country has been uneven this year, leaving States such as Uttar Pradesh, West Bengal, Bihar, Jharkhand and Chattisgarh largely rainfall deficient. But some States such as Andhra Pradesh and Telangana have been affected due to floods.
On July 29, Agriculture Secretary Manoj Ahuja held a meeting with senior officials of his Ministry and took stock of the sowing situation, particularly the dip in paddy acreage. Ahuja held the meeting as the Centre did not release paddy sowing data the previous week, fearing a near 19 per cent drop in the area might trigger a panic in the market.
Since the Secretary was convinced that the acreage — down 13 per cent by then — could be made up in the coming weeks, he approved the release of the weekly sowing update, sources in the Ministry said.
Premium rice rates up
The Rice Exporters Association of India (TREA) President BV Krishna Rao said prices of premium rice have increased by over 30 per cent with varieties such as Sona Masuri being exported from Karnataka to Bangladesh.
“The common variety has remained untouched. But buyers abroad, mainly Bangladesh, are stocking up premium varieties,” he said.
According to trade analyst S Chandrasekaran, at least 79 lh under paddy are at risk. “Taking into consideration the State-wise average yield, the production risk is over 19 million tonnes (mt),” he said.
Kharif rice output share
There could be some improvement in the coverage but at least 10 mt of rice production is at risk, Chandrasekaran said. He said crop diversification, particularly to cotton, lack of water for irrigation and some States like Tamil Nadu encouraging diversification from the cereal have also lowered paddy acreage this year.
A record 111.04 mt of rice was produced during the last kharif season with rabi harvest making up the rest to total a new high output of 129.66 mt, Ministry of Agriculture data show. In 2020, kharif output was 105.21 mt, while the overall production was 124.37 mt.
Over the last five years, kharif rice production has averaged 86 per cent of the total production. Kharif output has been showing phenomenal growth, while rabi harvest was lower during 2021-22 at 18.62 mt against 19.16 mt a year ago.
UP, a major concern
Agriculture Ministry officials say Uttar Pradesh, the second-largest producer after West Bengal, is the main concern. UP had fixed a kharif sowing target of 59 lakh hectares (lh) and it is short by 12 lh so far.
“The nursery area is almost the same level as a year ago, which indicates transplanting will take place any time once rainfall improves,” sources in the Ministry said. The situation is grim in Jharkhand as half of nurseries have dried up due to lack of rains.
Chandrasekaran said 80 per cent of the area under paddy in Uttar Pradesh is irrigated and eastern UP — which accounts for 50 per cent of the area under the cereal — has reported oly 25 per cent coverage.
In West Bengal, the quantity of normal rainfall is high, so there is no such concern if the monsoon is deficient by up to 25 per cent at the district level. Officials also said the increase in area in Madhya Pradesh will offset the loss in the area in Odisha and Jharkhand.
In Bengal, the next 5-7 days will be crucial and if the rainfall situation does not improve, then it might impact the production of kharif paddy, Sovandeb Chattopadhyay, State Agriculture Minister, said.
West Bengal produces close to 15-16 mt of paddy each year across three seasons — aus, aman and boro. Kharif paddy (aman) accounts for nearly 70 per cent of the State’s total production.
“Low rainfall has had some impact on sowing. We are waiting to see how it pans out. Bankura has got some rainfall in the last three days but Nadia and Murshidabad are lagging behind,” said Chattopadhyay.
Chandrasekaran said south Bengal has been primarily affected. “Agriculture officials say there could be a huge drop in the acreage since Nadia, Hooghly, Murshidabad, Birbhum and East Burdman have been affected.
According to Anjani Dubey, Deputy chief engineer, DVC, the corporation had released close to 56,000-acre feet of water as on July 26 to support kharif sowing. DVC had plans to release close to 70,000-acre feet of water between July 22 and July 27.
“The water level has come down, if there is no rainfall then it will be difficult to release more water from the dam,” Dubey said.
Analyst Chandrasekaran said releasing water for irrigation from DVC could affect drinking water supply. “The problem for Bengal is that by the third week of July, 70-80 per cent of sowing will be complete. That the area is lagging is a pointer that it will be hard to make up,” he said.
Rains hit Telangana hopes
In Telangana, unprecedented rains have caused extensive damage to paddy nurseries and early crop across the State. The State received almost double the rainfall (680 mm against the normal of 340 mm) in June and July.
During the normal season, the State grows paddy on 20-25 lh of the total cropped area of 56.6 lh. Despite this, the State expects to exceed the normal area under paddy.
“There might be a shift towards to cotton, which witnessed all-time high prices last year, but the shift will happen from maize and redgram farmers, leaving the paddy area untouched,” said S Malla Reddy, Vice-President of All-India Kisan Sabha (AIKS).
Chandrasekaran said the damage to paddy in terms of tonnage in Telangana is a minimum of 0.5 mt with Nizamabad, Karim Nagar and Medak being badly affected. “Acreage in Khammam will likely be 78,000 hectares lower due to various reasons including farmers shifting to other crops,” he said.
Farmers are shifting from paddy in Telangana to crops such as cotton in view of good prices last year for the fibre crop. The spat between Centre and State government has resulted in negative sentiment among farmers, though paddy could be relatively insulated.
In Andhra Pradesh, copious rains across all 26 districts have resulted in the State being on target in paddy coverage. The State plans to cover 6.6 lh under paddy this year, some 40,000 hectares above normal.
In Karnataka, the progress of paddy transplantation for the 2022-23 kharif season has been sluggish. So far, 2.45 lh have been covered against 2.82 lh a year ago. The State is targeting to cover 10.62 lh against the normal acreage of 9.24 lh.
Chandrasekaran said paddy has been affected due to floods in Konaseema, East and West Godavari, Adilabad and Udupi regions in South India. “The normal area under paddy is 396 lh. Can another 160 lh be covered within a month? That is the big question and it is unlikely,” he said.
“Currently, 18 per cent of kharif rice production is at risk. This does not include the damage caused due to floods. But the Centre should not worry since rice production will still be ample to meet demand,” he said.
TREA’s Krishna Rao said a lower production will only result in the government saving on costs to store and carry over the foodgrain. “The problem could be the availability of premium variety rice, but that can be handled,” he said.
This is part of a series of Kharif Outlook reports that will appearing in these columns starting today. Tomorrow: Monsoon prospects
(With inputs from Prabhudatta Mishra, New Delhi; Shobha Roy, Kolkata; KV Kurmanath, Hyderabad; Vishwanath Kulkarni, Bengaluru; and Subramani Ra Mancombu, Chennai)