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Wednesday, January 22, 2020

Weather and agriculture: Food inflation returns despite best rainfall in 25 years

2019 was extraordinary for crop damage caused by too much rather than too little rain. The prospects for rabi, however, look good.

Written by Harish Damodaran | New Delhi | Published: January 2, 2020 4:48:43 am
food prices india, food inflation, rise in food prices, inflation, India farmers income, Indian express The prevailing cold conditions are favourable for wheat, which is mostly now in tillering (branches produced from the initial parent shoot) stage.

2019 has seen India receive an average area-weighted rainfall of 1,278.7 millimeters (mm), the highest since 1,295.3 mm for 1994. This wettest-ever year in a quarter of a century comes just after 2018, which had, in fact, registered the worst rainfall performance since 2009.

The extent of turnaround is captured by another statistic: During January-June 2019, cumulative rainfall in the country was 22.7% lower than the normal historical average for this period. Coming on top of an extended dry phase — rains were deficit by 14% in 2018 — and amid an ongoing El Nino event, it portended a disaster worse than the back-to-back drought years of 2014 and 2015.

Then followed the revival no forecaster had anticipated.

By early-August, El Nino — the abnormal warming of the equatorial eastern Pacific Ocean waters, known to adversely impact the monsoon in India — was officially over. The second half of 2019 recorded 21.3% above long period average precipitation, with rainfall being surplus in every month: July (4.6%), August (15.3%), September (52.4%), October (44.3%), November (3.3%) and December (10.3%).

The above unusual pattern of late revival, which was preceded by drought-like conditions, had implications for the kharif crop this time. The lack of rains at the start — almost till the last week of July — affected sowing, with farmers planting late, if not less. But more significant was the heavy showers, especially during September-October, when the crop was in late maturity or harvesting stage. The agriculture ministry’s first advance estimates, released on September 23, showed a marginal 0.8% decline in the production of kharif foodgrains and a 5.2% increase in that of oilseeds for 2019 compared to the previous year. Those numbers will, in all likelihood, be substantially revised downwards.

food prices india, food inflation, rise in food prices, inflation, India farmers income, Indian express

This will probably be the first time where the kharif crop has suffered pretty extensive damage on account of too much, rather than too little, of rain. Proof of it is prices: virtually every agri-commodity today — from maize, bajra (pearl-millet), arhar (pigeon-pea), urad (black gram), moong (green gram) and soyabean, to onion, potato and milk — is trading higher than last year, while even close to or above their minimum support price levels. Consumer food price inflation, which averaged a mere 1.38% for a prolonged period from September 2016 to August 2019, has also since climbed to 5.11% in September, 7.89% in October and a near six-year-high of 10.01% in November. Prices rising so sharply and suddenly in a good monsoon year — again, the best since 1994 — is an unprecedented phenomenon of sorts.

The bright side, though, is that one can expect a return to normalcy in the rabi season. The recharging of groundwater tables and aquifers from the abundant late monsoon as well as post-monsoon rains, along with major dams being filled to near capacity, has resulted in the progressive area sown under rabi crops rising 6.6% over the coverage for the same period of 2018-19. Another indicator of farmers’ keenness to plant, because of better soil moisture and also prices — is the demand for fertilisers. Cumulative retail sale of all fertilisers during April-September (kharif), at 270.94 lakh tonnes (lt), was 3.3% below the 280.17 lt for the corresponding six months of 2018. But sales in October-December 2019, at 206.09 lt, have been 12.9 % more than the 182.49 lt for October-December 2018. And the rabi applications aren’t over yet.

The status of the current crop, too, seems good as of now.

The prevailing cold conditions are favourable for wheat, which is mostly now in tillering (branches produced from the initial parent shoot) stage. Farmers have expanded wheat area by 9.7% so far, with reports of sowing still coming in. However, the combination of chilly nights and foggy days is not ideal for mustard. The crop that was sown by early-October — in which much of flowering is over and the pods are forming — is vulnerable to frost. Flowering is still going on in normal mustard varieties sown before mid-October. Sunshine during daytime would be most helpful for yields now.

The same goes for sugarcane. While mills in Uttar Pradesh have crushed 309.78 lt of cane in this season (October-September) as on December 28, which is 15.5% more than the 268.26 lt during the corresponding period of 2018-19, their production of sugar is up by only 6.9% (from 31.02 lt to 33.16 lt). The reason for that is lower sugar recovery (10.71% versus 10.84%), which, in turn, has to do with the late rains reducing the dry matter and sucrose content in the cane. Sugarcane, like mustard, will also benefit from sunnier days and the night temperatures remaining low.

As things stand, the prospects of a bumper rabi harvest appear bright. If prices also hold, farmers would be doubly blessed — a far cry from the situation of the past few years where they borne the brunt of both droughts and low produce realisations.

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