Much of India’s agriculture prospects in FY24 would depend on the rain that the withdrawing monsoon brings this month and the next. The rain so far has been woefully short (11 per cent below normal since June 1), but September promises to be a better month, with the IMD predicting normal rainfall (91-109 per cent of the long period average for the month). This could save falling yields of crops in peninsular and eastern India, such as paddy, tur and urad, besides cotton and jute. Reservoir levels could get replenished for the rabi crop, particularly in eastern and peninsular India where their levels are low (23 reservoirs in these States, out of the 150 all-India, have a storage level below 50 per cent of the normal). The prospect of a fall in food output is building up inflationary pressures at a time when foodgrains inflation is already in double digits, posing policy challenges.

The rain deficit since June 1 has been pronounced in Kerala (minus 46 per cent), Jharkhand (minus 37 per cent), Bihar (minus 27 per cent), Chhattisgarh (minus 20 per cent), Karnataka (minus 19 per cent), Odisha (minus 14 per cent), Maharashtra (minus 13 per cent), Madhya Pradesh (minus 19 per cent), Uttar Pradesh (minus 19 per cent), Assam (minus 16 per cent) and West Bengal (minus 14 per cent) — in short, across peninsular and eastern India. The picture looks worse when August rainfall alone is considered. A large deficit (60-100 per cent) was reported right through the corridor from Kerala, Karnataka, Maharashtra, western Madhya Pradesh, Gujarat, Rajasthan and Punjab. The rest of the country was slightly better off.

The IMD forecast for September predicts deficient rain along same south-north corridor but good rain in parts of the eastern region and the Gangetic plain. Vulnerable crops in the corridor are jowar, bajra, tur, soyabean, groundnut, sugarcane, cotton and maize. However, as a result of improved rain in the eastern region, the paddy crop, whose acreage is up by over 14 lakh hectares, may end up with lower yield losses. More rain in north interior Karnataka, Telangana and Andhra Pradesh could lift pulses and millets, although the acreage of tur is considerably down from last year. Drought resistant paddy varieties may minimise yield damage.

Food-led inflation has the government worried. Rice prices have risen 11 per cent y-o-y in August, whereas jowar, tur, urad and moong have are up 50 per cent, 37 per cent, 21 per cent and 21 per cent, respectively, according to analysts. This is despite comfortable agriculture output and buffer stocks, of rice in particular, in recent years, which raises a doubt over whether structural factors are at work. The government has banned rice and wheat exports, imposed a stiff export price on onions and dropped edible oil import duties. Higher pulses imports are in the offing. However, the key is to cool prices by increasing supplies in the right quantities, without going to the other extreme, hurting farmers. For this better data on stocks and output is called for.