Krishi Bhawan’s preliminary reckoning of this year’s likely kharif output is not as comforting as it is made out to be. Though output this year will be higher than last year, when drought depressed it, it is likely to be still below the harvests of 2008 and 2007. This brings into question the hope expressed by government functionaries about a likely fall in the prices of farm commodities.
The anticipated kharif foodgrain production of 114.63 million tonnes is a good 10.4 per cent higher than the 103.84 million tonnes of last kharif. However, it is some 3 per cent below the 118.8 million tonnes bagged in 2008, and over 5 per cent below the record output of nearly 121 million tonnes in kharif 2007. Moreover, the production of the main kharif staple cereal, rice, is projected to be 80.41 million tonnes, against 85 million tonnes in 2008 and 83 million tonnes in 2007. Similarly, in the case of the wholly rain-dependent coarse cereals, whose output should get a boost with good monsoons, estimates are that this would be 28.23 million tonnes, close to the 2008 level, and below the 32 million tonnes reaped in 2007. So is the case with most other crops, barring cotton which has maintained a steady uptrend ever since the introduction of transgenic Bt-hybrids in 2002.
Thus, even if the current projections get revised upwards as the crops mature — which, hopefully, should be the case — these may still only inch closer to the levels achieved two to three years ago and get no better. If this is so, there seems little reason to celebrate. In fact, it gives rise to misgivings over the prospects of the much-needed second green revolution. On the price front, too, there seem slim chances of any significant sobering down on the arrival of the new crops. The impact may, at best, be only marginal. For, rice prices are unlikely to soften as bulk of the fresh market arrivals are bound to land up in government godowns, instead of boosting supplies in the market. In any case, the minimum support price (MSP) of paddy has already been hiked and this becomes the benchmark price for the open market. In pulses and oilseeds, on the other hand, the gap between demand and domestic supply will remain sizeable even after an expected rise in domestic output. This would also add to the pressure on prices. The prices of high-value foods, such as fruits, milk, meat and fish, are also expected to rise, thanks to structural factors like the rise in population and income levels and changing food habits of people. The price of vegetables, the other main food group, has a seasonal dimension but there is no reason to expect that these will come down. All in all, this calls for continued vigilance on the food price front, including improved management of stocks.
