Jun 14, 2014

Given the forecast of a deficient monsoon, Indian agriculture needs an economic stimulus


When drought strikes, farm animals are the first to be hit -- Statesman picture

The Indian Meteorological Department has in its latest forecast predicted a deficient monsoon. It has further lowered the monsoon estimates. From 95 per cent of the long-term average that was expected when the first forecast was made in April, it has further lowered the estimates to 93 per cent calling it below-normal monsoon. While the northeast is expected to get 99 per cent of what it normally gets, the shortfall is to the tune of 93 per cent in southern India and more pronounced at 85 per cent in northwest regions.

With El Nino – warm Pacific currents – likely to develop in August and strengthen further in September, the likelihood of an impending drought stares ahead. Although the private weather company Skynet has predicted 25 per cent chances of a drought building up, I am worried at the plight and suffering millions of small and marginal farmers across the country will entail. Already reeling under mounting indebtedness, and faced with a terrible agrarian distress, any shortfall in monsoon can put the deteriorating household economy back by several years. 

What pains me is the deliberate effort to view the monsoon shortfall only in terms of fall in growth. Many an economists/economic writers on TV channels have been repeatedly saying that the failure to push economic growth because of low agricultural production will mean that the overall economic growth will remain subdued as a result of which the Reserve Bank will not be able to lower interest rates.

Instead of worrying about GDP growth rate, it is high time that the entire focus of the new government should be on how to minimize the harmful impact on the livelihood of millions of small and marginal farmers. This is the time to channelize the entire government machinery towards fighting the drought in a way that helps mitigate the economic suffering, and at the same time take appropriate steps to save the standing crops and put in place a contingency plan. For this, there is an immediate need to first set up a war room in the Cabinet Secretariat that monitors the drought conditions on a daily basis.

I remember it was in 1987 that the country was faced with one of the worst droughts of the previous century. Almost the entire 147 million hectares of cultivable area was affected. But that was also the year when the country had a foodgrain buffer of 20 million tonnes. A meticulously planned food management programme, ensuring the availability of foodgrains in the deficit areas together with timely availability of inputs like diesel, electricity and anal water, helped tide over the crisis. Probably that was the first time after Independence that a massive drought did not lead to starvation and hunger.

A lot has changed between 1987 and 2014. But still, drought remains a nightmare for farmers as well as the government. This year, India already has a surplus food stock of 62 million tones, which is enough to keep normal food supplies in place and also ensure food inflation is under control. Besides stocking diesel supplies to augment groundwater irrigation in the deficit States, equally important is to make available fodder and cattle feed for the animals. In any drought like situations, it is the livestock that first feels the brunt but receives the lowest attention.

In addition to ensuring that farmers get adequate power supply to keep the tubewells running, it would have been much more fruitful if the Ministry of Agriculture had launched a nation-wide campaign encouraging farmers to make an immediate shift to sow paddy, the main kharif crop, with less water. The entire agricultural machinery, including agricultural universities and the State agricultural departments along with the private agribusiness companies, should have been involved in promoting the SRI method of rice cultivation which saves almost 30 to 40 per cent water.  In addition, a massive thrust should have also been on direct sowing of paddy instead of the water guzzling transplanting that we see all across the country.

Agriculture is the biggest employer in the country. Almost 70 per cent of the population is directly or indirectly engaged with farming. In addition to the low agricultural growth, what is more important is the loss of livelihoods reflected through farm suicides and increased rural-urban migration. A strong and economically viable agriculture is the foundation on which the entire economy grows. More is the purchasing power in the hands of the villagers; more is their ability to purchase consumer goods that moves the wheels of economic growth. It is therefore important to provide an economic stimulus package of at least Rs 1 lakh-crore to agriculture. 

The moment I talk about an economic stimulus for farmers I encounter an orchestrated uproar. But what we don’t realize is that at the time of the global economic crisis in 2008-09, Indian industry was given a stimulus package of Rs 3 lakh-crore. This package continued to be doled out for almost three years. If the industry can be given a huge stimulus for three years, why shouldn’t the poor farmers also get the benefit of an economic stimulus? It is high time the animosity towards rural India ends. Perhaps Prime Minister Narendra Modi will see merit in providing a bailout package to millions of hapless farmers. # 

Deficient monsoon predicted, give agriculture an economic stimulus
Hindustan Times, Chandigarh, June 14, 2014 http://bit.ly/1mVkdiG

Stimulus for agriculture
Orissa Post, June 13, 2014   http://www.orissapost.com/epaper/130614/p8.htm

2 comments:

Anonymous said...

Does any Chief Minister in this country ever invite farmers to meet him and discuss their problems ? However, they have all the time in the world for investors meetings in home land and abroad ! You usually see smiling industrialists coming out of closed door meets with CMs . You never see an emaciated farmer stressed out after bank loans and crop failures coming out of CM chambers !

Biswajit Mohanty
Orissa

kdp said...

Thanks for the excellent information posted here! Please keep sharing the information like this.

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