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Resource centre on India's rural distress
 
 

Is food inflation round the corner? -Harish Damodaran & Parthasarathi Biswas

-The Indian Express

First, it was low prices and, now, with soaring input costs, farmers may cut back on sowings

Nashik/ New Delhi:
During much of the current government’s tenure, Indian farmers have suffered from poor crop realisations, partly due to the crash in global agri-commodity prices after around April 2014 and aggravated by demonetisation and GST (goods and services tax) that have depressed sentiment in predominantly cash-based produce markets.

One indicator of this is annual wholesale price index inflation, which averaged 3.57 per cent from 2014-15 to 2017-18 (April-March) in “food articles” and 0.29 per cent for “non-food articles”. Even for the current fiscal, the year-on-year inflation rate of minus 0.21 per cent in food articles and 4.17 per cent in non-food agricultural articles has been lower than the 5.13 per cent for “all commodities”.

But that story of depressed farm prices, for over four-and-a-half years now, may soon reverse. The reasons are two-fold. The first is drought – especially in Gujarat, large parts of Maharashtra, and North Karnataka – that could impact sowings in the just-commenced rabi season. The second reason is the steep increase in prices of diesel, fertilisers and crop protection chemicals, which might further discourage plantings by farmers, already facing margin squeeze from depressed produce realisations.

Sunil Katkade, a farmer from Naigaon village in Sinnar taluka of Maharashtra’s Nashik district, normally grows onion on two out of his seven acres land during the rabi season. This time, he has sown his nursery in mid-September, but isn’t sure of being able to transplant the seedlings by the second week of November. “Where is the water? I would be lucky to plant even one acre,” remarks the 50-year-old, who grows napier grass and alfalfa fodder on his remaining five acres.

Maharashtra produces roughly 30 per cent of India’s onions and, within that, the bulk of it comes from Nashik, Ahmednagar and Solapur districts. During this monsoon season (June-September), Nashik received just 61.7 per cent of its normal rainfall quota, with the corresponding figures at 71.9 per cent for Ahmednagar and 38.4 per cent for Solapur. Worse, it has hardly rained in the current month either.

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