Agri Business

Kharif Outlook: Farmers may opt for soyabean, groundnut instead of cotton

Our Commodities Desk June 3 | Updated on June 03, 2021

Question over pulses acreage linger; MSP, rainfall could decide growers crop choice

“I will cultivate soyabean this year. Prices for it are ruling at over ₹7,000 a quintal and I will go for it,” says Sunil Mukhati, a farmer near Indore in Madhya Pradesh.

“But it is not the case with all my co-farmers. Some of them plan to grow corn and some pulses (moong or green gram),” he says, adding “their soyabean crop was affected last year by rain and fungal attack”.

Jagdishbhai Patel, a farmer from Morbi district in Gujarat, is reducing his cotton cultivation area by half. He will sow groundnut seeds on the other half of the area he used for cotton last year.

“For the last two years, I have been growing cotton on almost the entire 20 acres I own. But we are fed up of the pink bollworm issue in cotton so this year, I will have groundnut on half of my land,” says Patel.

“Farmers in the Sangli area in Maharashtra could shift to soyabean from turmeric since the bean prices are very good now. We see an increase in soyabean area that could be at the cost of turmeric,” says Sunil Patel, a turmeric supplier from Sangli.

“We are seeing many farmers buying Basmati paddy seeds in our area. Preparations are on to grow paddy and shift from sugarcane in these parts of Punjab,” says Amritsar-based Suresh Singh Chauhan, General Manager - Agri-Business, AMDD Foods Pvt Ltd in Punjab.

This year, factors such as prices realised by farmers during the previous cropping season, timely arrival of rainfall, declaration of minimum support price (MSP) and the availability of inputs such as seeds among other factors will play a role in deciding the Kharif cropping pattern.

The Agriculture Ministry has taken steps to promote planting of pulses and oilseeds crops more than ever before this year. For this, the Agriculture Ministry has embarked on an ambitious plan to distribute seed kits of high-yielding crops of pulses and oilseeds free of cost to farmers in many States. It also has a similar plan for expanding the coverage of oilseeds.

Factors for crop choice

According to BV Mehta, Executive Director, Solvent Extractors Association of India (SEA), farmers could be in a dilemma in picking their choice of crop during the current Kharif season.

“Farmers may favour crops such as groundnut, soyabean and castor to some extent this year. If the farmer finds cotton more lucrative, then he may go for it. One thing that has to be kept in mind is that ultimately the area has to come at the cost of other crops,” he cautions.

The oilseeds trade expects an increase in area as soyabean and groundnut had fetched better returns for the farmers last year. Groundnut and cotton may compete for the area in Gujarat, while pulses may face competition in parts of Maharashtra from soyabean.

The Soyabean Oil Processors Association expects an increase in the area of 5-7 per cent, says DN Pathak, Executive Director of the oil trade body in Indore.

Agri-commodity Researcher Rahul Chouhan of IGrain India say that while more farmers will go for groundnut in Gujarat, farmers in Madhya Pradesh, Maharashtra, Karnataka and Rajasthan will increase soyabean acreage.

“In Madhya Pradesh, farmers may replace paddy, urad and maize in some areas to grow soyabean, while in Maharashtra some area under cotton and pulses can make way for growing soyabean, in Rajasthan bajra, pulses and paddy, in Telangana cotton, maize and pulses and in Karnataka pulses and cotton,” said Rekha Mishra, Vice President at GramCover, a composite insurance broking firm focused on insurance product design and tech enabled distribution for rural India.

“There is certainly a chance that the area under soyabean will go up this season. Firstly, soil moisture levels are good in most soyabean-growing States making early sowing possible and more importantly, soyabean has been commanding good prices in the market,” Mishra said.

Telangana may shift to cotton, pulses

In Telangana, Chief Minister K Chandrashekar Rao is personally urging farmers to shift from paddy to other crops such as cotton and tur (arhar/pigeonpea). This is a shift from the State’s last year experimentation policy of regulating the cropping system. It has done away with it this year.

“A section of farmers will shift to cotton this year. This can be attributed to the problems that they faced in the procurement process. A large number of farmers suffered losses as the harvested produce was damaged in the incessant rains that lashed the State during May,” a Telangana Rythu Sangham leader said.The Telangana government wants farmers to grow more cotton and red gram in view of the huge demand for them. Also, after the State produced 30 million tonnes of paddy, it sees lack of demand for it from neighbouring States such as Tamil Nadu and Kerala.

Last year, cotton was cultivated on 62 lakh hectares (lh) in Telangana. This year, the State hopes to increase it to 80 lh. In a way, it will help offset the losses in the cotton area in States such as Gujarat and Maharashtra. The area under cotton last year was around 130 lh.

In Gujarat, a larger number of farmers are looking to plant more groundnut than cotton. The reason: pink bollworm and huge labour cost.

Not only that, groundnut fetched better prices than cotton, which also caused losses to farmers in terms of lower yield following damages due to the pest attacks

In Maharashtra, a majority of the farmers in Marathwada and Vidarbha could opt for soyabean. A network of Farmer Producer Companies (FPCs) is playing a major role in the choices farmers are making this Kharif season. Last season, they played a major role in connecting farmers to the market and many FPCs directly procured from farmers at a higher rate compared to the minimum support price (MSP).

The Centre had fixed the MSP of tur at ₹6,000 a quintal last year, but in Maharashtra it traded at over ₹9,000 in the open market. Tur was cultivated on 12.36 lakh hectares in the State last year and this year, it is expected to increase.

FPCs had played a major role in cotton and soyabean markets too. “Storing and transport is one of the major problems cotton farmers face. But FPC procured a good amount of cotton, especially in remote areas of Vidarbha and Marathwada. More farmers will prefer cotton over soyabean this season,” said H K Pathan, a farmer.

He added that the availability of soyabean seeds and the quality of seeds is one of the major problems farmers have been facing for the last couple of years.

In Gujarat, the choice of groundnut is evident from the higher rates for groundnut seeds, which is hovering around ₹2,400-2,500 per 20 kg bag, up 20 per cent from last year.

Farmers say that the high cost of groundnut seeds is a barrier to increase the area under groundnut further. Last kharif season, cotton was sown on 22.79 lh in Gujarat out of the total cultivated area of 87.24 lh. Groundnut acreage was 20.65 lakh hectares.

SEA’s Mehta sees a 5-10 per cent increase in area for groundnut, soyabean and castor during the current kharif season.

Pulses imports

Will the current high price for soyabean have any impact on sowing? “The price went up due to different international reasons. That may not be the case this year. But definitely they would be getting a higher price than the MSP,” says Mehta.

In States such as Telangana and Andhra Pradesh, farmers are complaining that quality seeds are not available in the market and some seed producers are asking farmers to give in writing that they will not blame them for bad quality or late germination.

As far as pulses acreage is concerned, the Government’s recent policy to allow imports of tur, moong and urad under open general licence (OGL) may weigh on its coverage. Tur, moong and urad (black matpe) are the key pulses crops grown during the kharif season.

Trade and processors have defended the Government’s move to allow imports stating won’t have any impact on the acreages, but farmers see it as a negative development.

“I don’t think the move to import pulses ahead of the planting season will send any negative signals to farmers,” said Bimal Kothari, Vice-Chairman, Indian Pulses and Grains Association. Imports of these pulses have to be concluded by October and brought in before November-end.

The moong and urad crop will come in by October-end, while tur will arrive by December. “This is a timely and thoughtful step taken by the government as demand is increasing,” Kothari said.

However, Basavaraj Ingin, President of Karnataka Red Gram Growers Association, said imports ahead of the cropping season are seen as negative and may influence prices during the harvest season.

Planting of green gram has already begun in Karnataka, one of the major producing States after Rajasthan. Moong, a 60-day crop and urad, a 90-day crop, will be harvested by August-September. Farmer’s are also waiting for the Government to announce the MSP for kharif crops.

Rahul Chouhan expects the pulses area to drop by 10-15 per cent as farmers may shift to soyabean.

Soyabean farmers earned nearly double the MSP this season. Some farmers have even sold soyabean meant for seed. “There is no doubt that the area will increase by 10-15 per cent, but arranging seed for sowing will be a challenge,” Chouhan said.

Bengal, which covers 58 lh under paddy, could be one State where farmers “might not compromise with paddy”. Kharif paddy in Bengal, the largest rice producer in the country, accounts for 70 per cent of the State’s total production.

    With inputs from Vishwanath Kulkarni, Bengaluru; TV Jayan, New Delhi; KV Kurmanath, Hyderabad; Rutam Vora, Ahmedabad, AJ Vinayak, Mangaluru; Radheshyam Jadhav, Pune; Shobha Roy, Kolkata; and Subramani Ra Mancombu, Chennai

      (This is part of a series of Kharif Outlook reports that have been appearing in these columns. The reports will continue to appear over the next few days.)

      Published on June 03, 2021

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