- 6 hours ago
Category
🗞
NewsTranscript
00:00Even the Gengar is facing drought-like conditions.
00:03How are you assessing what's happening in India right now, the monsoon deficit?
00:10Actually, the deficit is quite large, and some 60% of districts have deficient rainfall so far.
00:17The first week of July gave us hope that perhaps monsoon may revive,
00:23but after the first 10 days of July, it has been very dry.
00:30It has been very dry after the first 10 days of July.
00:34So the worrying aspect is that the poorer states of India, like Bihar, Vidarbha in Maharashtra,
00:42the poorer regions have received very low rainfall.
00:45Bihar is about 45% deficient, and some parts of Maharashtra which are drought-prone are about 40% deficient.
00:53So on the whole, the situation is not very good at this point of time.
00:58India finds itself in this situation over and over again through the years.
01:03I'm just wondering how much is really meteorological, how much is policy-driven vulnerability?
01:14Actually, the area under irrigation has increased by about 10% over the last 12-13 years.
01:22So in 2015-16, when I was Secretary of Agriculture, the area under irrigation was about 45% of gross
01:29cultivated area.
01:30Now it is touching 55%.
01:32Similarly, micro-irrigation coverage has also improved.
01:35But overall, large parts of India continue to depend on rainfall, and it is not only the dry regions.
01:43Even in the irrigated areas like northwest region of India, Punjab, Haryana, UP,
01:49there also we need monsoon rains so that the underground water is, you know,
01:59the draw from the underground water is lower.
02:02Otherwise, recharging becomes even more worrisome.
02:07Suresh, people point to chronic underinvestment in watershed management.
02:15What do you say to that?
02:20No, we can always demand more money.
02:23But what has happened over the years is that large irrigation projects have dragged on for years,
02:30especially in Maharashtra and some other regions of India.
02:33And vast sums of money have been invested by the government,
02:36but they did not yield the result which was expected.
02:40And therefore, in 2014, when the new Modi government was sworn in,
02:46it was decided that we will select 99 projects and complete them faster.
02:51And I think the progress there has been quite good.
02:54The government has paid a lot of attention.
02:56But I agree that in several parts of India, micro-irrigation could substantially improve.
03:01And there is a need to invest more in micro-irrigation and in other aspects.
03:07But having said this, we can always ask for more money, but there are competing demands for that.
03:18Suresh, what are you looking at right now in terms of the data points over the next few weeks
03:23to feel a little less concerned, both in terms of the collateral impact of this rainfall,
03:29but most importantly within that, the impact on food production?
03:35I think overall the production of food grains will not be very much lower
03:40because in 2015-16, it was second consecutive year of drought
03:45and still the food grain production was lower by only about 5%.
03:48So, I do not see much worry on account of that.
03:54But I think the production of maize is going to be lower.
03:59The production of cotton may be lower.
04:03And especially pulses and oilseeds production may be lower,
04:06which may have to import more pulses perhaps at lower duty.
04:12And therefore, there will be impact on food inflation.
04:16We cannot say that we are completely shielded from that.
04:22Any sense of how large that impact will be, Siraj?
04:26Now, the reason I ask is because we went into this monsoon with a more than adequate food buffer stock
04:32from the data I've looked at.
04:34Now, that might largely be rice, wheat.
04:37But nonetheless, where do you see the price impact turning out to be the worst?
04:45Actually, a lot depends on how the rainfall is distributed from now till the end of August.
04:51But I think we will see inflation in pulses.
04:54We will see inflation in oilseeds, as I said.
04:57And therefore, food inflation may cross 6-7% consumer food inflation.
05:05Wheat and rice, of course, we are very comfortable.
05:08But, you know, an odd thing here is that the government has allocated 7.2 million tons of rice for
05:14ethanol.
05:15So, I think that needs a relook, especially in view of lower area coverage for maize in both Maharashtra and
05:23Karnataka,
05:23which are major Kharif maize-producing states.
05:29Okay. I do also want to ask you, as former Agriculture Secretary,
05:34you would have witnessed the impact of body-deficient monsoon means for rural incomes.
05:39That's another metric we're trying to get a sense of.
05:43I understand the impact has changed over the last decade,
05:47and rural incomes are more buoyant and less monsoon-dependent.
05:51Yet, what's your take on that?
05:55No, rural incomes will be affected.
05:57And as I mentioned, the poorer states of East India, like Bihar, Jharkhand, etc.,
06:03and the poorer regions of West India, like Vidarbha, Telangana, have received very low rainfall.
06:09So, it is not only agriculture which suffers under these circumstances.
06:13The fodder availability becomes a problem.
06:15Drinking water becomes a problem.
06:17Because even the reservoir levels are very low.
06:19So, I was looking at the data, and I find that in UP, it is just about 22% reservoir
06:23level.
06:24And in West Bengal, just about 19%.
06:27Telangana, also very low levels.
06:29So, rural economy will be affected, and rural incomes will definitely be affected,
06:34especially small farmers and agricultural laborers.
06:37So, a lot will depend on whether G. Ramji, the new scheme, which has been introduced in place of Mahatma
06:44Gandhi, Narega,
06:46you know, this employment generation scheme, how does it fare?
06:48Because in the new dispensation, the state governments have to contribute 40% of the total expenditure on rural employment.
06:56Earlier, on employment, their contribution was zero.
06:59So, I do not know how keen will be the states in providing employment to rural people under the employment
07:07guarantee scheme.
07:09So, Raj, do you see crop support prices going up significantly?
07:14What's the sense you're getting?
07:19No, I do not think that the Commission for Agriculture Costs and Prices will increase, will recommend higher prices.
07:28In any case, the prices for Kharif crops, that is the crop which is now being sown, have already been
07:33declared.
07:34What has happened in the past is that if there is lower production due to drought or any other reason,
07:40then the government, even the central government has declared bonus from time to time in some years.
07:47So, depending on how monsoon behaves and what is the extent of production loss,
07:52it is possible that the government may declare a bonus.
07:55But I do not see any increase in the minimum support price.
07:58Of course, if monsoon continues to be very deficient, then even the winter crop will be affected.
08:03So, it is possible that the government may take that into consideration and provide a small hike for the rubby
08:10crops, for winter crops.
08:11But, you know, these price hikes have remained in the range of 3% to 6%.
08:18So, I do not see a very high level of increase in that.
08:23From 6%, it cannot go up to 10%.
08:26That is what I mean.
08:29In any case, I am also wondering if the crop insurance schemes are actually enough and effective if farmers get
08:38impacted.
08:42Crop insurance schemes are quite effective if they are conducted in a manner which is desirable and which is provided
08:50for in the regulations.
08:51So, for example, once it is known that you are going to have El Nino and if you force the
08:57insurance companies to provide insurance after that declaration,
09:01then obviously insurance companies would be very reluctant.
09:04You know, the basic point of insurance is the uncertainty.
09:07Therefore, there are cut-offs dates in the regulations.
09:11But many a times those dates are not honored by the state governments and there is a push from the
09:18state governments and even the central government to force the insurance companies to provide insurance even after the cut-off
09:24date.
09:25So, now that it is known that we are going to be deficient in rains, you know, there is no
09:30point in extending the date now.
09:32So, on the whole, I think those who have taken insurance before the cut-off date will be well-shielded.
09:38But those who have taken insurance after the cut-off date on the recommendation of the state government,
09:44I do not think insurance companies will be very keen to support them.
09:53Siraj, I am going to move away from the direct impact of the monsoon to ask you two policy questions.
09:58One is the ethanol debate that's going on in the country, and this is in terms of mixing ethanol with
10:04petrol to be able to reduce our import bill.
10:08But unfortunately, it does increase our water bill.
10:12You know, I'm curious how you look at the rising proportion of ethanol in fuel in this country
10:19and what that really means for water consumption and the broad impact on agriculture.
10:27You see, I have written on this subject several pieces, including long articles.
10:34See, what has happened is that 20% blending was a good policy choice, which was recommended by NITI.io.
10:42Now, it would not be very correct to say that because of this policy, water consumption is going up
10:47because the farmers would have grown sugarcane anyway.
10:51Whether ethanol blending was 10% or 20%, that would not affect area under sugarcane.
10:57What has happened is that the government has provided rice from the government stocks, 7.2 million tons this year.
11:03That is a wrong choice.
11:04Again, it does not mean that farmers are growing paddy rice to supply ethanol.
11:12What has happened is that several state governments are providing bonus on paddy.
11:17They are incentivizing rice.
11:18So, it is coming from there due to which the government has built up huge stock of rice.
11:23But lastly, it is maize whose cultivation has been encouraged by the government.
11:28And in my view, instead of maize, the farmers should be encouraged to grow pulses and oil seeds
11:34because in a country like India, whose population is going to increase to 1.67 billion by 2050,
11:41we should be taking care of our food security first.
11:45So, in my view, to sum it up, we should not be going beyond 20% blending at this point
11:50of time.
11:53Okay.
11:54One final quick short question, Siraj, and that is that, you know, every time we run into a monsoon crisis,
11:59we are reminded of the unfinished farm reform agenda, anything top of your list this year
12:05that you hope the government will get to?
12:10I do not think that there is political space available with the government to go for serious reforms.
12:18This fertilizer crisis provided an opportunity to the government to gradually increase the urea prices,
12:25as was done by the UPA government for diesel prices.
12:28You know, at one point of time, diesel was very...
12:31So, then the UPA government increased the price of diesel by 50 paisa per month.
12:36Every month, the price went up by 50 paisa.
12:38Some kind of modification in the urea policy, I was expecting, but that did not happen.
12:45So, elections are due in several large states in 2027.
12:49So, I do not think that we will see any serious reforms in agriculture policy.
12:56Siraj, I want to pick up on the fertilizer crisis that you just mentioned.
13:00Just how bad is it as a result of the Iran war?
13:06No, it is not very bad.
13:07In fact, it was handled very well by our government.
13:10What has happened is that the government bought urea at the peak of the crisis,
13:15Hormuz, closure, at a very high price, $50 per tonne.
13:19While before the war, it was between $450 to $500 per tonne.
13:24So, the government shielded the farmers by importing urea at a very high price.
13:28Though in some states, there are kind of restrictions on how much urea a farmer can buy,
13:34but there has not been any large-scale disruption in supply of fertilizers.
13:39Of course, the government's budget for fertilizer subsidy is going to be higher
13:44as compared to the estimate provided when the budget was presented.
13:50Do you see any risks if the Iran war were to persist?
13:53I mean, it's gone far longer than most people expected already.
14:00Of course, there is, you know, every possibility that if the movement of ships is impacted,
14:08then availability and import for ruby crop, for the winter crop may be affected.
14:13But in the meantime, India, Indian government has done very well to explore options from other countries,
14:20import of urea and other fertilizers from other countries.
14:22So, I do not think that we are going to have any serious crisis of fertilizers, even in ruby crop.
14:30In any case, we are now better prepared after this crisis to handle situations like this.
Comments