Millennium Post

Blame it on the rain... not!

The weathermen have predicted poor rainfall in the country during the four-month monsoon season. This has caused panic. Actually the worry is not so much for the foodstock which is in comfortable position in the current year, but for the rising trend in prices of essential commodities, particularly food items that pinches the pocket of the common man.

Just after the country’s official weather forecasting agency, India Meteorological Department (IMD) issued its preliminary forecast in 24 April cautioning about poor rainfall, the wholesale prices of commodities began shooting up. Rising prices of food and beverages like coffee, tea, poultry, fish and vegetables pushed up the wholesale price inflation to a 5-month high at 6.01 per cent in May. The Wholesale Price Index based inflation was 5.20 per cent in April and 4.58 per cent a year ago. The IMD’s final forecast issued on 9 June compounded the fears of a poor South-West Monsoon in the period June-September. Not only the rainfall is likely to be deficient generally over the country being below normal at 93 per cent of the long period average of 89 cm with a model error of +-4 per cent, but over most of the regions with the exception of north-eastern states, West Bengal, Bihar and Jharkhand the rainfall will also be equally poor. Rainfall forecast for the crucial agriculture months, July and August, is also not encouraging. It is likely to be 93 per cent of the LPA in July and 96 per cent of the LPA in August with a model error of +-9 per cent. Late arrival of the monsoon and its tardy advancement over the country also raises concern.

The chances of the spoilsport, El Nino, emerging during the monsoon period is as high as
70 per cent. El Nino is the warming of the Pacific waters above its normal range. The warming in Nino 3 and Nino 3.4 regions of the Pacific Ocean impact the Indian monsoon. However, the conditions in the tropical Indian Ocean are warmer than normal uniformly throughout the basin and therefore ruling out any possibility of positive Indian Ocean Dipole conditions in the monsoon season. Though the rainfall is likely to be deficient, there is some hope as the storage position in major reservoirs across the country, except in South India, is satisfactory. The available surface water can be used for irrigation.

However, in this critical hour, the government should step in to mitigate the hardship of the farmers. The farmers need real time weather information in local areas so that they can plan for alternate crops in case of poor rainfall. Adequate power and diesel subsidy should be given to draw water for irrigation. Drip irrigation materials should be sold to farmers at a subsidised cost. De-silting of canals, energizing tubewells, repairing of faulty pumps should be taken up on a war footing. Subsidised seeds should be given to farmers to grow alternate crops. Special attention should be given to the chronic dry areas of the country. Subsidised fodder should be provided for milch animals and poultry, particularly in dry areas. These are some immediate measures to mitigate the hardship of farmers.

The incidences of suicides committed by farmers are on the rise and hence there is a need to reschedule payment of crop loans and providing interest subvention on rescheduled loans for farmers in drought affected areas. Even additional subsidy should be given on premium for crop insurance. If farmers’ income falls, the Government needs to bridge the gap by setting up a Price Stabilisation Fund.

Apart from addressing farmers’ immediate problems, the government must care to mitigate the problems of the common man. There is ample foodstocks with the government. Against a buffer norm of about 100 lakh tonne of rice and 170 lakh tonne of wheat, the Government stock is 206.45 lakh tonne of rice and 415.86 lakh tonne of wheat. There should not be any worry for any shortage of staple food. Besides as per the third advanced estimate, foodgrains production in 2013-2014 is likely to break earlier records and be at its highest at 264.38 million tonne. This includes coarse cereals, pulses, apart from rice and wheat. Oilseeds output is also estimated at a high of 32.41 million tonne and sugarcane at 348.38 million tonne.

Going by the estimates of availability of food in the country, there should be no reason for panic. The present rising trend in prices of essential commodities is due to the sentiments generated in the market on account of the forecast for a deficient rainfall. The government needs to crack down on futures trading which is responsible for generating sentiments for price rise. Hoarders must be booked. All types of storages are controlled by business houses and big traders. Efforts must be made to offload stocks from the storages to control the rising trend in prices. The government should take steps to adequately subsidise petrol, diesel and cooking gas which have telling impact on price inflation.

Poor monsoon can be no excuse for unwarranted price rise. Timely and determined action by the government can hold the price line and mitigate the woos of the farmers.
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