Commodities

Farm sector ploughs thru a tumultuous year

Vishwanath Kulkarni Bengaluru | Updated on March 12, 2018 Published on December 29, 2014

farmsector

Bearish price trends in the global market, poor rainfall took toll on farmers in 2014





Farmers in the country were hit by a double whammy in 2014. Even as poor monsoon affected kharif output, lower commodity prices, largely influenced by a bearish trend in the global market, aggravated the agrarian crisis this year. In addition, the uncertainty over the vagaries of nature, largely through frequent unseasonal rains, compounded farmers’ woes.

The South-West Monsoon, the lifeline of the country’s agriculture, was not only delayed this year but the overall quantum of rain across the country was lower by 12 per cent for the four-month period. The monsoon was the weakest in the last five years and the country received a total rainfall of 775.7 mm against the normal of 883 mm. About a third of the 36 metrological sub-divisions received deficient rains facing drought-like conditions, while 23 of them received normal rainfall and only one sub-division - South Interior Karnataka received excess rainfall during the season.

This poor rainfall not only affected plantings, but the productivity of almost all major crops. After a progressive increasing trend in foodgrain production over the recent years, the country is staring at the prospect of a decline in output in 2014-15. According to the Government’s first advance estimates or the early estimates, kharif foodgrain production this year is expected to be lower by 6.9 per cent at 120.27 million tonnes over the previous year.

Rock-bottom prices

But a lower output did not necessarily mean higher prices for farmers. A global glut in key agri commodities such as maize, soyabean, cotton, sugar and wheat, among others, continued to influence domestic prices, thereby hurting farmers’ realisations. Prices of a bulk of these commodities continued to hover below or around the minimum support price (MSP) levels.

Farmer suicides made a comeback in the drought-prone regions of Vidarbha in Maharashtra and even the newly-formed state of Telangana reported the trend as crops, such as cotton and soyabean, failed on account of poor rains. A study by the National Sample Survey Office (NSSO) revealed that about 52 per cent of an estimated 90.2 million agricultural households in India are indebted, with Andhra Pradesh reporting the highest share of such indebted agri households at 92.9 per cent, followed by Telengana at 89.1 per cent and Tamil Nadu at 82.5 per cent.

Lower exports

Also, exports of agri commodities, after scaling a new high in the last couple of years, took a beating this year, largely on account of lack of price parity for a majority of products and also due to poor demand for some products, such as cotton. Prices of corn, soyameal, wheat, sugar and even dairy products, among others, ruled higher domestically than the global prices, thereby making them unviable in the international markets. As a result, exports of agricultural produce are set for a slowdown in the current financial year.

Though the late rains during September in several parts of the country did rekindle hopes of a better rabi (winter) season, the latest trend in sowings reflect the impact of the poor monsoon as acreages are trailing by about five per cent over the corresponding period a year ago. Also, the lack of adequate water availability is seen influencing crops, such as mustard, among others. A potential drop in rabi output could add to the overall decline in foodgrain production, thereby curbing the overall growth in agri and allied sectors, which accounted for 13.9 per cent of gross domestic product (GDP) during 2013-14.

Can 2015 usher in price stability and alleviate the woes of India’s farmers? It remains to be seen.

Published on December 29, 2014
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