 "Delayed monsoon to cut area under paddy, boost cotton: M Prabhakara Rao")
"We expect the cotton acreage to be all-time high or at the record high levels of 12.5 million hectare (ha) sown last year. Also, a decline of two to three million ha in paddy area is likely this year," he says.
Rao, who is also the managing director of Hyderabad-based Nuziveedu Seeds Limited (NSL), shared with B Dasarath Reddy the seed industry's perspective on how the kharif is going to pan out. Excerpts from an interview:
What would a delayed monsoon mean to the seed industry?
We received two to three monsoon forecasts in opposite directions before the latest one telling us it would be a delayed one. Despite the late onset, sowing will take off once the rains start in June and, therefore, the seed industry is not unduly worried over this delay. In a large country like ours, a 10 per cent shortfall in some parts or the other are common even in a normal year.
How are these uncertainties going to play out in the ensuing kharif season?
Cotton sowing area will go up, especially in Telangana and Maharashtra, and also on the whole because it withstands deficient rainfall conditions better than other crops. The crop area would be either higher or at the record high level of 12.5 million hectares last year.
Though cotton prices were not attractive in the earlier crop cycle period, these have started picking up in the past couple of months. In Karnataka, the maize crop might go up at the cost of cotton if rains are sufficient, while we expect a rise in Bengal gram and chillies in Andhra Pradesh. The area under pulses, grown across states, would go up substantially as the prices are very high.
Going by the monsoon forecast, we expect a decline of two to three million ha in paddy area, normally sown in 45 mn ha. Paddy prices are also low. Soybean acreage might also come down, as prices were not good last year, and a part of this area could shift to cotton and maize. Overall, a 10 to 15 percentage shift in the cropping area under different crops is a normal phenomena every year.
How do you visualise the influence of market prices in determining the farmers's choice regarding various crops in this kharif?
Agriculture commodity prices world over were down till last year and our country was no exception as far as major crops like maize, soya been and wheat are concerned. As the prices of most of these commodities are bottomed out, we expect better prices for cotton, maize and soya bean next year. However, the sugar situation is still bleak.
Also, we have been seeing reports of subdued off take in rural India with regard to farm implements and fast-moving consumer goods (FMCG) goods etc. So, farmers may not have sufficient resources or they may be unwilling to take greater risks when it comes to investing in crops. As seed is a basic requirement, we foresee no adverse impact on the industry even under these conditions.
Is the seed industry, which faces intense competition, able to price the product to get enough margins?
The industry, by and large, has been able to pass the rise in costs on to the customers by around 10 per cent every year except in the case of Bt cotton, whose price remained the same for the past four years.
The states of Telangana, Andhra Pradesh and Maharashtra, which regulate the price of Bt cotton seed, refused to allow any rise in prices this year, too. So, the companies continue to sell the seed at the prices fixed four years ago across India.
While the Telangana government had slashed the royalty component to Rs 50 from Rs 90 on each pocket while transferring the benefit to the seed producer, the high court stayed the orders in favour of the technology owner Monsanto.
So, the industry could not get any relief this year. We want the prices to be revised at least next year as the companies are not in a position to absorb the increased costs of production.
Is the industry asking for any policy support from the central government?
Recently, we have made a representation to the Union agriculture ministry seeking a level-playing field for the private sector with regard to pulses and oil seeds. The industry was unable to participate in pulses and oil seeds as they are sold at subsidised rates to farmers by the government entities.
As a result, farmers are growing the same old low-yielding varieties every year as there was no incentive for research and development. We only wanted the government to give cash subsidy directly to the farmers, allowing them to buy the seed in the open market depending on his choice. The government is taking steps in this direction.