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LATEST NEWS UPDATES | Farmers prefer to sow rice, sugar cane-Ruchira Singh

Farmers prefer to sow rice, sugar cane-Ruchira Singh

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published Published on Aug 21, 2012   modified Modified on Aug 21, 2012
-Live Mint

Notwithstanding the drought, farmers have preferred to sow sugar cane and rice instead of opting for less water-intensive crops such as coarse grains and pulses.

The latest sowing data released by the agriculture ministry as of 16 August shows that area under coarse cereals and pulses is down 13% and 12.39%, respectively, from last year, while that for rice and sugar cane contracted only 3.57% and 4.53%, respectively.

In the process, the farmers may be making a risky bet. The downside is that water scarcity will impair productivity, especially in the case of water-intensive crops such as rice and sugar cane; the imminent onset of the El Nino, a weather phenomenon that will likely cause the early withdrawal of an already-deficient monsoon, could further complicate matters.

On the other hand, both crops are cushioned by a minimum support price (MSP) offered by the government. It is unclear, though, whether the government, which already possesses over 80 million tonnes (mt) of foodgrains and is strapped for finances, would undertake procurement of the autumn harvest at the usual levels.

Experts believe that part of the reason for the contrarian sowing pattern is insufficient communication by the government.

“There is a gap in communication between the farmers and the government,” said Kriti Bardhan Gupta, chairman, Centre for Food and Agribusiness Management at the Indian Institute of Management, Lucknow. “Farmers are confused when they see conflicting messages on the monsoon, and they have apprehensions about the information they have.”

Had the government communicated its message about the necessity of planting more coarse cereals and other less water-intensive crops, farmers may have switched from sugar cane and and rice, Gupta said.

Despite a “normal” forecast at the start of India’s June-September monsoon season, rains are now 16% below normal and the total area under cultivation is at 88.372 million hectares, down 6.18% from last year.

But worse may follow, with foreign weather forecasters and the India Meteorological Department saying there is a chance that the El Nino weather pattern may develop next month, leading to an early withdrawal of the monsoon.

El Nino, “the little boy” in Spanish, refers to the warming of temperatures in the Pacific Ocean leading to opposing weather conditions on either side of the ocean—flood-causing rains in the Americas and droughts in Asia-Pacific, including Australia and India.

Drought commissioner Anup Kumar Thakur, who is also additional secretary in the ministry of agriculture, has downplayed concerns about the lower plantings of coarse cereals and pulses.

“We are seeing good rains now, the sowing will catch up,” Thakur said last week.

Drought-hit states have launched initiatives to switch to alternative crops since the beginning of the month, but these may be at best be knee-jerk reactions, in the absence of a larger focus on preparedness for deficient rainfall, said Radha Singh, a former secretary in the ministry of agriculture.

“We can’t have foolproof measures, but we can still insulate ourselves from a drought by 60-65% by making fundamental changes,” Singh said. “The government shows that so many lakh crores has been spent on agriculture, but has it gone to it in a targeted manner?”

Singh said big funds were needed to fight drought, for instance for upgrading technology at the Met office, weather index-based insurance and risk management.

The impact of lower sowing of coarse grains will lead to higher prices as food and liquor companies are likely to chase up prices of maize, jowar, bajra, barley and small millets.

“Liquor and food companies have a huge cushion in terms of profitability. They also need to protect their brands, so in all probability, they will pay higher to buy coarse cereals,” said Anjani Sinha, managing director and chief executive officer at the National Spot Exchange.

On Saturday, spot maize traded at Rs.1,411.5 per 100kg, up nearly 11% from Rs.1,275 per 100kg a year ago, data on the Multi Commodity Exchange of India showed. The November futures contract on the commodity on the same exchange traded higher at Rs.1,450.

Abhijit Sen, a member of the Planning Commission, played down fears of El Nino hurting standing crops.

“If the Met office forecast is right, there may be a mild condition of El Nino,” Sen said. “The degree of preparedness is good. For instance, if there are scanty rains for three weeks running, there are provisions to draw water into the affected states.”

Compared with the drought of 2009, the country is on a better footing now, Sen said. “In 2009, the rain deficiency was at 23% around this time,” he said.

Y.K. Alagh, chairman of the Institute of Rural Management, Anand, Gujarat, said it was natural for farmers to get drawn to “over-protected crops” such as rice and sugar cane because of the MSP offered by the government and likely help in case of a calamity. However, “overprotecting rice and sugar cane means we are giving less incentive to those crops that are inflation causing”, Alagh said.

Live Mint, 21 August, 2012, http://www.livemint.com/2012/08/20202436/Farmers-prefer-to-sow-rice-su.html?atype=tp


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