Bleak crop outlook

The first projections of the likely crop output in the current kharif season, put out by the agriculture ministry, should be understood in their proper context. On the face of it, the numbers point to modest growth of 1.6 per cent in kharif foodgrain production, and the setting of new records in the output of some key commercial crops like soyabean, cotton, sugarcane and maize (which has found bulk use as poultry feed). However, what these numbers do not reveal is that the 1.6 per cent growth in foodgrain output comes from a 3.3 per cent larger acreage under food crops, and with more and better distributed rainfall during the on-going monsoon season (which, fortunately, has got extended thanks to the delay in its withdrawal). Furthermore, the projected grain harvest of 112.24 million tonnes is only fractionally higher than the 112.07 million tonnes bagged six years earlier, in 2001-02, and well below the 117 million-tonne mark of 2003-04 "" a year when the monsoon rainfall was more or less similar to this year's precipitation.

The qualification is that these are preliminary estimates, and likely to be revised in the coming weeks, most probably upwards. However, this cannot be taken for granted as much will depend on the crucial post-monsoon rainfall, and the incidence of pests and diseases. Even taking an optimistic view, it is difficult to assume that the grain output this year will surpass the previous peak of 117 million tonnes, reached four years ago. This is especially because the acreage under paddy, the main kharif cereal grown on over one-third of the crop land, has not expanded and its production therefore is unlikely to rise appreciably. It is no wonder then that the newly set up National Food Security Mission has been given the rather modest target of raising rice production this year by just a million tonnes, wheat production by 2 million tonnes (in the coming rabi), and pulses by a mere 300,000 tonnes.

What comes out quite clearly from the sowing pattern in the current kharif is that farmers have expanded the area under those crops whose prices have tended to rule firm in the recent past-such as pulses, oilseeds, cotton and the like. Paddy, whose prices have remained stable due largely to ample government stocks, has not gained much in area. This needs to be viewed against the broad backdrop of the government's agricultural pricing policies and the farmers' response to them. Most recent policy interventions have sought to safeguard consumers against inflation, in the process disregarding the interests of growers. This approach (which fails to study second-round effects) has boomeranged and proved counter-productive because the farmer has shown that he is price-sensitive in his choice of crop, and will not focus on those crops whose prices have been held down. The farmer's rational response to market realities is also reflected in his reluctance to sell wheat to the official procurement agencies at the minimum support price (MSP), despite the adding on of a hefty bonus. Wheat stocks are being offloaded only now, several months after the rabi harvest, when prices have risen higher than the MSP. The government needs to learn a few lessons from this experience and shape its policies in such a manner that the potential supply response is kept in mind. If growers' interests are sacrificed repeatedly at the altar of inflation control, he will give the system a supply-side shock that, in many ways, will make food management a bigger challenge that it might be otherwise.