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Moneylife » Economy & Nation » Economy » Monsoon: Will it play havoc again?

Monsoon: Will it play havoc again?

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AK Ramdas | 19/07/2012 05:02 PM | 

With 70% of India not having received adequate rainfall so far, the government faces tough challenges on food prices, inflation, water situation and agriculture. Are we prepared to face the eventualities? 


The Indian Meteorological Department’s (IMD) predictions are as uncertain and unreliable as the weather and our monsoon is already affecting the aam aadmi. Around 70% of India has not received adequate rainfall so far. The situation, though nobody wants to publicly admit, is grim.
 
According to the Central Water Commission’s reports published recently, against the live storage capacity of 154.421 billion cubic metres (cbm) average storage of water, till 5th July was only 25.191 billion cbm in 84 major reservoirs monitored by the CWC.
 
Unfortunately, this is the lowest in the last 10 years. With continued poor rains in catchment areas, this is a grim situation.
 
Ashok Gulati, chairman of Agricultural Costs and Prices (CACP), in a recent interview has stated, “We have adequate foodgrain stocks” to tide over monsoon failure.  He contends that food inflation is higher due to vegetable prices, particularly that of onion and potatoes!
 
He further explains that some four to six months ago, potatoes were thrown on the road at Rs2 a kg; today, at the farmer’s level, it is Rs8-Rs10 a kg and the consumer pays Rs15-Rs20.
 
In reality, this if far from the truth, as the aam aadmi pays much more than these when he/she buys from the market. In fact, the price of essential commodities varies at various levels or locations from where one sources these. The price in the wholesale market is different from retail; from Hopcoms and the vegetable cart vendor to the kirana shop next door!
 
Besides, whoever depends upon eating just potatoes? Rest of the vegetables as also foodgrain are just as important. The government may employ MSP (minimum support price) to ensure that the wiling farmer gives his produce, but nothing has really been done to control the menace of the chain of middlemen who usurp the profit at every stage before the produce reaches the ultimate consumer!
 
All said and done, what are the immediate plans of the government?  
 
Apparently, it has ordered its seed division to make alternate seeds available; crop division to roll out an alternative crop plan if the poor rainfall continues; to report on the drinking and irrigational water requirements; to review fertilizer demand pattern; set up contingency plans for meeting the fodder shortage that will occur in affected areas and to review location-wise storage of potatoes and onions and, presumably, take measures to check rising vegetable prices.  
 
To support this, even the consumer price index has gradually moved from 7.65 to 10.36 in May while the wholesale price index has reached 7.55 in May as against 6.89 in January as per Central Statistical Organisation data.
 
Of course, some parts of the country have had more than adequate rain and floods likely if situation continues. The sowing season is delayed because of the rains, and it is essential that the government now comes forward to provide urgent and immediate aid to farmers in the form of free supply of seeds, fertilizers and expedite plans for releasing of stocks of foodgrain in affected areas to avoid starvation and suicides by farmers.
 
In the meantime, we do have continuance of river water disputes, while millions of cusecs of water are being discharged into the sea wastefully without being tapped for use in the parched lands of the country. Isn’t that a shame? 
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US. He can be contacted at anantha_ramdas@yahoo.com.)

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