Two months into the 2011 southwest monsoon season that began on June 1, far from refreshing, the farm prospects look disappointing, bordering on the scary. With the passage of every day, it is becoming increasingly clear that in respect of a number of crops, the kharif 2011 output is most likely to fall short of the previous year's record numbers.
As of end-July, the all-India area weighted rainfall was in the negative territory — four per cent below normal. The spatial distribution of rains is a sure cause for concern. Six out of the 36 meteorological sub-divisions received excess rainfall, while 8 sub-divisions have faced deficient rains.
This includes the whole of Gujarat, Haryana, Orissa, Western Rajasthan as also Assam and Meghalaya.
Although in 22 sub-divisions rainfall has been ‘normal', the information masks reality. Importantly, Punjab, Bihar, Chhattisgarh, Telengana and coastal Andhra Pradesh as also Vidarbha are closer to the deficient category.
Slipping acreages
Reports of the Weather Watch group suggest acreages are slipping, especially in coarse grains, pulses and groundnut. Clearly, the time for planting has already ended. There will be no further expansion of actual planted area.
But one must hasten to add that there is strong likelihood of a lag in receiving and compiling official sowing and acreage data. So, final acreage numbers for kharif 2011 are most likely to be significantly higher; but in many cases are most likely to fall below the normal and even below last year's acreage.
So, on current reckoning, looking at the performance of southwest monsoon and available acreage data, the coming months are set to be challenging for growers, consumers and policymakers alike. Although a more realistic picture of sown acreage will be known in the next few days, there are early signs that kharif 2011 farm production may slip.
Daunting task
Of particular interest are coarse cereals, pulses and groundnut. In case of pulses and oilseeds, the country is already a large importer. Further tightening of domestic availability in the face of growing demand would mean rising prices and increased import dependence. How the policymakers would face this daunting challenge remains to be seen.
At the same time, there is no let up in the high levels of food inflation, nor have high prices compressed food demand. Consumption demand is robust, but the uncomfortable skew in consumption means that demand continues to emanate from those with purchasing power. As for the poor and the needy, if anything, high food prices are seen diluting their food and nutritional intake.
Unrelenting prices
The irony of the situation is palpable. The Agriculture Ministry has claimed highest ever production of a large number of crops during 2010-11 including foodgrains covering wheat; coarse cereals mainly maize; pulses mainly urad, moong and gram; and oilseeds mainly soyabean.
However, despite the record harvest, market prices have stayed stubbornly high. For instance, a record crop of 8.25 million tonnes of gram (chana) was harvested just four months ago; but prices have jumped by over 15 per cent in the last two months.
The government is nursing humungous inventory of rice and wheat incurring high carrying costs; but fine cereal prices, especially at the retail level are uncomfortably high for a large number of consumers. The disconnect between official farm production figures and behaviour of open market prices is now creating suspicion that some of the final output estimates for 2010-11 may have been overstated. The role of speculative capital in boosting market prices deserves attention.
Finally, the performance of 2010-11 is no guarantee for a repeat in 2011-12. Without sounding alarmist, it must be stated that the portends are ominous on the farm front. Greater vigil is necessary in monitoring farm prospects and taking corrective measures to ensure augmentation of supplies and control of food prices.