Little reason for comfort over foodgrains output estimates

The first advance estimates of foodgrains production in the kharif season released earlier and the second released recently by the Ministry of Agriculture, raise a question over the euphoria that followed a good monsoon.

The recent production estimates of rice and coarse cereals at 80.16 and 30.56 million tonnes compare poorly with corresponding target figures of 87 and 32.6 m.t.. Total foodgrains production is 8.14 m.t. short of the target, despite normal monsoon. Only in the case of pulses, the production overshot the target of 5.7 m.t.

As against the last year when drought adversely affected the foodgrains output, uneven spatial distribution of the same seems to have played the spoilsport this year.

Unequal distribution

First, flood-like situation in several districts of Haryana and Punjab in early monsoon season threatened the newly-sown rice crop. Since many high-yielding varieties grown extensively in these States permit late-transplanting of rice, decline in production, if any, will largely be due to lower yield probably on the account of those floods.

Secondly, rainfall deficit in the lower and middle Gangetic Plains and Jharkhand may affect both the acreage and yield. Bihar, Jharkhand and West Bengal account for about one-fourth of the total rice production as well as the acreage. Although the production in these States suffered due to the deficient rainfall, one expected it to be at least as much as in the drought year 2009-10 when monsoon was no better.

Thirdly, floods hit Uttar Pradesh and Andhra Pradesh towards the end of the monsoon season. Since floods in Uttar Pradesh hit hard the cane-growing areas , the impact on rice production may not be substantial.

In Andhra Pradesh, on the other hand, cyclone ‘Jal' seems to have damaged the crop in many areas. Yield being quite high in the State, even a small loss in the acreage may reduce the production drastically.

On the whole, the picture seems to be quite varied.

Although the States affected either by scanty or excess rainfall do contribute to about 35-40 per cent of total rice production , the remaining States could well have compensated for that. Orissa and Assam, which together contribute 12 per cent of the total rice production, received good rainfall and the output is likely to be higher there.

Misplaced optimism

If the Ministry's advance estimates are anything to go by, such optimism is rather misplaced.

To describe the current year as one of recovery, it is reasonable to compare the performance with a normal monsoon year like 2008-09 as a baseline than an abysmally poor agricultural year.

Leave alone rice, whose production increased by 5.6 per cent over 2009-10 but fell by the same amount over 2008-09 suggesting that the recovery failed to make up to the medium-term trend; neither coarse cereals nor pulses offer much reason to be jubilant about.

Corresponding recovery rates for coarse cereals are 29 per cent and seven per cent for the same base years.

Production of pulses, the emergent crops for India's future, rose by 38 per cent over 2008-09; however if 2007-08 is the agreed base, there is no perceptible change.

The uniformly poor performance of all foodgrains leaves little scope for diversion of land or other inputs from rice to competing foodgrains.

Yet in a progressive and dynamic agriculture, any drought year could come as a shock to the system from which the production would normally be expected to bounce back to its own trajectory of growth. So a simple comparison with an abysmally low base can say little about the recovery prospects.

Food price increases in the recent past have proved costly to the people and to the government.

Last year's supply shock was believed to be one of the reasons for surging food prices in the country.

While price-led upturns in agricultural GDP are possible, such economic prosperity can ironically co-exist with physical scarcity of food.

Further, food demand is not likely to diminish in the foreseeable future under any positive economic outlook, exerting more pressure on the supply.

Pointing this out, the Eleventh Plan document emphasised the need for tackling supply side problems in the agricultural sector. Moreover, food inflation has resurfaced this year even at the international level. The current production performance may not help moderate it soon. Monsoon vagaries will be here to stay. If anything, they can worsen with the global warming. Since spatial variations in the monsoon cannot be ruled out, if kharif 2010 performance demonstrates a slump in production even with an average monsoon , bridging the demand-supply gap may not be an easy task in future.

We also need to see what the third and fourth advance estimates have to reveal. And this is probably an overly optimistic anticipation: the outlook may turn brighter.

(The authors are Assistant Professor and Associate Professor respectively at Institute of Economic Growth).

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