The excitement and frenzy of the elections is at its peak and there is a sense of bullish anticipation in the air. The economic indicators are giving positive signals. CAD is down and the FIIs are placing their bets with increased inflows, on a positive outcome in the elections. The Sensex is touching peak levels and the setting seems perfect for the next government to take charge.
But wait. There could well be a twist to this tale. Between April 14-23 this year the South Asian Climate Outlook Forum (SACOF) comprising of India, Bangladesh, Afghanistan, Sri Lanka, Myanmar, Maldives, Bhutan, and Nepal met at Pune under sponsorship of the Indian Meteorological Department (IMD) along with the Geneva based World Meteorological Organization (WMO).
In a consensus Press release the forum has forecast that El Nino effect could result in a 5% deficit rainfall for most parts of India during the South West monsoon that runs through the June-September season.
El Nino effect
El Nino is explained as a band of anomalously warm ocean water temperatures that periodically develops off the Pacific coast of South America. Extreme climate change patterns oscillations fluctuate weather across the Pacific Ocean which results in fluctuating droughts, floods, and crop yields in varying regions of the world.
A strengthened El Nino can result in excess rainfall in Brazil and parts of the US Mid-West while causing drought conditions in India, Southeast Asia and Australia. All weather patterns keep constantly evolving and this year El Nino is still in its normal phase. However, it must be noted that a change in the El Nino phenomenon does not always result in severe impact in the above regions. Other climatic factors also have a play. In 1997, the El Nino was pretty strong but in India we had 2% excess rainfall. Yet, in 2009, when El Nino was high, India faced a severe drought condition on account of poor rainfall.
Risk of fall in Agricultural output
This year the weather phenomena has been unusual. As winter was in its last legs, North India faced some unusual late snow and rains that extended to parts of Maharashtra. The rain and hail just before the harvest season caused severe damage to standing crops, the impact of the shortfall in output will be felt in the coming months.
However, there has been a contrary effect in areas of Assam and North Bengal where there has been deficient rains. According to the Indian Tea Association, for the period January to April 20, there has been only 71 mm rainfall as against the usual 310 mm, severely impacting the standing tea crop. The Darjeeling tea crop is down 51%, the Dooars crop is down 30-35% while rest of the tea gardens are witnessing a shortfall between 20 and 35%.
Increase in MSP
For the crop year 2014-2015, the Ministry of Agriculture has proposed an increase in the Minimum Support Price (MSP) for various crops. MSP for cotton has been raised by Rs 50 per quintal to Rs 3750/quintal for medium staple, Rs 4050/quintal for long staple; Paddy, Rs 50 per quintal to Rs 1360/quintal (common variety) and Rs 55 per quintal to Rs 1400/quintal for ‘A’ grade variety; Cereals: Maize, Rs 30 per quintal to Rs 1530/quintal (hybrid) and Rs 1550/quintal (maldandi), Ragi Rs 50 per quintal at Rs 1550/quintal; Pulses: Moong Rs 100 per quintal at Rs 4600/quintal, Tur Rs 50 per quintal to Rs 4350/quintal and Urad Rs 50 per quintal to Rs 4350/quintal; Oilseeds: Sesamum Rs 100 per quintal to Rs 4600/quintal and Nigerseed Rs 100 per quintal to Rs 4600/quintal, Sunflower Rs 50 per quintal at Rs 3750/quintal.
The above is expected to bring some relief to the overstressed farmers.
Food Corporation of India (FCI)
FCI is responsible to procure, store and distribute food grains on behalf of the government. FCI is the nodal agency that procures food grains from farmers at MSP and then releases the same as per government mandate at subsidized prices, as per prevailing policy. FCI has been financially stressed given rising costs of procurement, storage and distribution costs. In addition, it also faces severe shortage of storage space resulting in grain damage and losses.
Given the large food subsidy program initiated by UPA II, FCI is facing a major funds crunch. By the end of FY 2013-14, FCI had subsidy dues of Rs 50,000 crore. It plans to raise Rs 20,000 crore in short term loans to meet its working capital requirements.
Tasks before the farmers
Given that Indian agriculture is largely dependent on seasonal rainfall, it is time for farmers to re-orient their approach. Some tasks that they should proactively initiate are:
- Keep actively involved with their local Krishi Vigyan Kendra (KVK) and stay constantly updated on climatic variations on a continual basis. This will help farmers understand weather patterns in advance and they can take preventive measures to minimize climatic hazards.
- Farmers have to introduce micro irrigation techniques to reduce their dependency on rainfall and optimize the use of groundwater resources.
- They have to start experimenting with hybrid varieties that are pest and disease resistant and which offer higher yield. In several parts of India, the farmers are hesitant to try out newer varieties on account of lack of crop insurance. This is an area where the government needs to initiate insurance programs to insulate the farmers from crop losses.
- Greater use of technology and automation is needed to offset rising cost and lack of suitable labour.
- Large corporate houses must be allowed a greater role and involvement with farmers. Several models have been successfully demonstrated and this needs to be further expanded.
El Nino could well pose major challenges to the incumbent government and only long term structured planning and implementation can ensure India’s agriculture is less dependent on rainfall while improving its per capita output.
