Ten weeks into the four-month cycle of south-west monsoon that runs from June to September, the spatial and temporal distribution of rainfall as of August 9 presents a mixed picture. Seven of the 36 meteorological sub-divisions covering Kerala, Karnataka, Marathwada and Vidharba in Maharashtra and also West Uttar Pradesh are already in deficient category. Although technically not in the deficient category, there are regions close to being moisture-stressed — East and West Madhya Pradesh, Eastern Uttar Pradesh, Telengana, Rayalaseema, Haryana and Assam.

Indeed, the distribution of rainfall so far is a matter of concern and significantly dilutes the euphoria generated by normal to excess rains in other parts of the country. More rains are needed in the next three to four weeks across the country, especially peninsular India, as the monsoon is likely to enter the withdrawal mode by mid-September.

Kharif 2017 planting across the country has concluded; but the acreage data still trickling in presents a mixed picture. In terms of planted area, as of August 11, some crops have done exceptionally well – pulses and cotton, for instance – while in oilseeds (mainly soybean and groundnut) and maize, acreages are trailing.

As expected, the area under cotton has performed creditably, having expanded to 11.71 million hectares from 9.96 million hectares a year ago. Sugarcane too has performed well having been planted on 4.97 million hectares (against last year’s 4.56 million hectares).

Despite price challenges, the pulses area has expanded to 12.75 milion hectares, slightly below lats year’s 12.96 milion hectares. This shows pulse growers are still hoping to receive remunerative prices despite last year’s price debacle. However, tur/arhar planted area has taken a beating having shrunk to 3.99 milion hectares from 4.91 milion hectares last year. This clearly reflects growers’ dissatisfaction over price collapse and previous year’s inadequate procurement efforts. It is a matter of consolation that moong and urad area has substantially made up for the loss in tur/arhar.

Progress in oilseeds planting is raising concerns as acreage has slipped this season by about 10 per cent to 15.43 milion hectares from 17.11 milion hectares. Both soybean and groundnut – two principal oilseed crops of the kharif season – have slipped on acreage by about 10 per cent, reflecting growers’ response to unsatisfactory prices realised over the past several months.

The Government’s response to low prices has been tardy. It took several months to open up groundnut oil export by that time the financial damage to growers had already been inflicted. Soybean prices seldom recovered from trading closer to the minimum support price. The hike in import duty on edible oils announced on August 11 is likely to bring windfall gains to speculators and large importers who have built inventory rather than to growers.

Missing the target

Even assuming that the country would be fortunate to receive adequate and well distributed precipitation in the weeks ahead, on current reckoning, it appears the production target in case of some kharif crops may not be achieved. This is particularly true of oilseeds whose production target set by the Government is 25.4 million tonnes and coarse cereals (33.75 million tonnes), especially maize (19.0 million tonnes).

Even in case of sugarcane, the production target of 355 million tonnes is unlikely to be achieved given erratic precipitation in principal growing regions. It may be closer to 325 million tonnes, albeit higher than 306 million tonnes estimated for 2016-17.

That leaves cotton as the crop to turn up a stellar performance in 2017-18. On current reckoning, actual production may well exceed the Government’s target of 35.5 million bales (170 kg each). Indeed, of all the upcoming crops, cotton will cry out for policy attention followed by pulses. There is the real possibility of a collapse in cotton prices and growers exhibiting their ire. The Government agencies have to gear themselves up for a timely and strong procurement operation to avert a price crisis similar to tur/arhar and soybean last year.

In case of pulses, on current reckoning, actual harvest may fall short of the target of 8.75 million tonnes and last year’s production estimate of 9.12 million tonnes; yet it could still large at close to 8.0 million tonnes.

Given the huge inventory of pulses within the country – comprising both domestic and imported – prices are unlikely to recover to the level of minimum support price. Tur/arhar is especially vulnerable, despite the 2,00,000 tonne quota instituted recently. Procurement should be strengthened.

It is time for the policymakers to take a holistic view of various policies for each of the major crops including trade policy, tariff policy and administrative policy.

The writer is a global agribusiness and commodities market specialist

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