Rain in September will be a major factor in food production in FY24

Much of India’s FY24 agricultural outlook would depend on the rain the declining monsoon brings this month and next. Rain has been pitifully short so far (11 percent below normal since June 1), but September promises to be a better month as the IMD predicts normal rainfall (91-109 percent of the month’s long-term average). This could rescue declining crop yields in the Peninsula and East India, such as rice, tur and urad, and cotton and jute. Rabi crop reservoirs may be replenished, particularly in eastern India and the Peninsula where levels are low (23 reservoirs in these states, out of the 150 across India, have levels less than 50 percent of the normal value). The prospect of a drop in food production is adding to inflationary pressures at a time when food grain inflation is already in double digits, posing policy challenges.

The rainfall deficit since June 1 was pronounced in Kerala (down 46 percent), Jharkhand (down 37 percent), Bihar (down 27 percent), Chhattisgarh (down 20 percent), Karnataka (down 19 percent). Odisha (down 14 percent), Maharashtra (down 13 percent), Madhya Pradesh (down 19 percent), Uttar Pradesh (down 19 percent), Assam (down 16 percent) and West Bengal (down 14 percent) — in short, across the board Peninsula and East Indies. The picture looks even worse when looking at the rains in August alone. A large deficit (60-100 percent) was reported across the corridor from Kerala, Karnataka, Maharashtra, western Madhya Pradesh, Gujarat, Rajasthan and Punjab. The rest of the country fared a little better.

The September IMD forecast predicts insufficient rainfall for the same south-north corridor, but good rainfall in parts of the eastern region and the Ganges plain. Endangered crops in the corridor are jowar, bajra, tur, soybeans, peanuts, sugar cane, cotton and corn. However, the rice crop, which has grown by over 14,000 hectares in acreage, could experience less yield losses due to improved rainfall in the eastern region. More rain in northern inland Karnataka, Telangana and Andhra Pradesh could plant legumes and sorghum, although tur acreage is significantly lower than last year. Drought-resistant rice varieties can minimize crop damage.

Food-related inflation is a concern for the government. Rice prices rose 11 percent year-on-year in August, analysts said, while jowar, tur, urad and moong rose 50 percent, 37 percent, 21 percent and 21 percent, respectively. This is despite good agricultural production and buffer stocks, particularly rice, in recent years, raising doubts as to whether structural factors are at work. The government has banned the export of rice and wheat, introduced a high export price for onions and lowered import tariffs on cooking oil. Higher imports of legumes are imminent. The key, however, is to drive prices down by increasing supply in the right amounts, without going to the other extreme and hurting farmers. This requires better inventory and production data.

https://www.thehindubusinessline.com/opinion/editorial/september-rain-will-be-a-major-factor-in-fy24-food-output/article67273801.ece Rain in September will be a major factor in food production in FY24

Russell Falcon

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