Dry spell wilts crops, stokes concerns on food inflation

A man holds an umbrella as he walks along a beach during rains in Odisha yesterday. India recorded above-average rains in June but forecasters have said the rains, critical for about half the nation’s farmland that lacks irrigation facilities, would remain subdued in large parts of the country in the first half of July.Reuters/Sarve, MaharashtraFarmers in India run the risk of planting too much, too fast in the current monsoon season as an unexpected dry spell starts to wilt crops across the country, raising fears of lower yields and surging food prices. Food prices are a political hot potato in India. In fact, high food prices have already pushed the country’s June consumer inflation to an eight-month high. That is why the ongoing dryness in central, western and southern India - key producing regions for cotton, soybean, corn, sugarcane, pulses and rice - is a big cause for worry. Poor output of summer crops would further lift food prices, restricting the central bank from cutting lending rates, crucial to boosting Asia’s third-biggest economy. “The outlook for inflation over the next few months depends squarely on monsoon rains for the remainder of the season,” HSBC said this week. India’s farm sector accounts for 15% of its economy and given half its farmland lacks irrigation, the monsoons are crucial. A heavy downpour early last month had lifted the rain surplus to 28%, raising farmers’ hopes of a good June-September monsoon season despite forecasts for the emergence of an El Nino weather pattern. But following the dry spell, rains are now 6% below normal, with the deficit as high as 52% in some regions, weather department data shows. “Sowing has nearly stopped due to the dry spell. Even sown crops are under severe stress,” said Vikas Deshmukh, agriculture commissioner of Maharashtra, India’s second-biggest cotton and soybean producer as well as its top sugar producer. Indian farmers had initially rushed to sow seeds after ample rains, bringing total planting levels to 44.5mn hectares by July 10, up 62% year on year. But the higher number does not give a correct picture as monsoon in 2014 was delayed and so was the sowing, said B V Mehta, executive director of the Solvent Extractors’ Association. In 2013, when rains were ample, by this time farmers had planted on nearly 52mn hectares. For millions of farmers in India, where three-fifths of the population depend on agriculture for their livelihood, the fate of a single crop can be the difference between life and death. Earlier this year, dozens of debt-laden farmers committed suicide after damage from unseasonal rains, and poor summer-crop yields would exacerbate the pain for Prime Minister Narendra Modi’s government that is struggling to address rural distress. “I can sow crops once again when we get rains, but I don’t have money to buy seeds,” said Narayan Patil, a farmer from Sarve village of Jalgaon district, 400km north-east to Mumbai. For Patil, and several others, the outlook is grim. The official forecast remains that this year India could suffer its first drought since 2009 because of El Nino, which can lead to scorching weather across Asia. Maximum temperatures in central and southern India are currently up to 6 degree Celsius above normal, hurting crop growth, said Nitin Kalantri, a pulses dealer. A drop in domestic output could lift overseas purchases of edible oils and pulses by India, the world’s biggest importer of both, while limiting its rice and cotton exports. “Crop yields are likely to be lower than normal this year even if monsoon becomes active in next few days,” said Vandana Bharti, Assistant Vice-President (Commodity) with SMC Global Securities Ltd.lWith farmers’ suicides continuing unabated in Maharashtra, the Shiv Sena yesterday asked its ruling coalition ally, the Bharatiya Janata Party, whether it had any schemes in place for the benefit of the community.The Sena also flayed the opposition Congress and Nationalist Congress Party which are demanding full waiver of farm loans, for disrupting the ongoing monsoon session of the state legislature.In a sharp piece in the party mouthpiece, Saamana Thursday, the Sena said Chief Minister Devendra Fadnavis has rejected the demand for writing off farm loans as the state is already overburdened under a huge debt.“The government is feeling that taking any new debts could make Maharashtra’s (financial) condition like Greece... Although the present situation is the handiwork of the previous (Congress-NCP alliance) regime,” the newspaper said.The Shiv Sena urged the government to remember that the hard work of the farmers and workers laid the foundation of the state.“It is these very people who have brought you to power... If they have to continue dying like this, then what was wrong with the previous government? The new government must act different,” the Sena urged the BJP.