The Meteorological office expects the southwest monsoon to break over Kerala by May 31. With less than two weeks to go till the rains start, however, farmers have no clue yet about the minimum prices they can expect for various kharif crops, planting of which will begin soon. It is intriguing why the Agriculture Ministry cannot announce the minimum support price (MSP) for various crops well before the advent of monsoon. Such a delay curtails farmers' choice of crop and restricts the time available for sourcing inputs. It is a pity the policymakers have long forgotten Jawaharlal Nehru's important maxim: “Everything can wait, but not agriculture”.
In recent years, the announcement of MSP for crops has become more a ritual than an instrument to influence crop shifts. In soyabean, for instance, market prices rule far above the declared MSP, rendering the latter inconsequential. Also, an impression has gained ground that the government tinkers with the recommendations of the Commission for Agricultural Costs and Prices merely to show that the recommendations are not sacrosanct and that the government has the last word. Evidently, higher MSP may bring growers some price security but it does not guarantee higher production. This is because, given the several challenges to farming, the supply response to prices is rather limited. In other words, the farmers' ability to expand acreage or raise yields depends on the land, water, agronomy and inputs he has access to. To raise crop production and productivity, we need non-price and non-trade initiatives such as stronger input delivery, expanding irrigation and better agronomic practices, in addition to adequate rural infrastructure. Merely declaring the MSP, without building capacity among farmers to withstand the vagaries of the market, is unlikely to serve any practical purpose.
On the weather front, a close study of the IMD's initial forecast shows that ‘normal' is fraught with uncertainties. Climate forecast reports from elsewhere suggest the risk of deficient rains in July/August. Mid-season drought can hurt farmers by rendering useless their initial investment in inputs and labour. It is unclear if the Agriculture Ministry and various State governments have a contingency plan in place. Despite a rebound in crop production in 2010-11 (kharif plus rabi season) and mounting buffer stocks of foodgrains with the government, food inflation is unabated. Even a small aberration in rainfall has the potential to fan bullish sentiment in the market and deal a blow to inflation control measures. Overall, the Central and State governments have to stay vigilant, and focussed on the monsoon and crop progress over the next four months while being prepared to face any eventuality.