The southwest monsoon is behaving better. There may be more rains later and aggregate rainfall may not look bad. But the distribution and timing will be crucial. Also crucial will be the government?s preparedness. The monsoon has been almost 50% below normal until July 22 in Bihar, Haryana, Punjab and UP. Even if there is a sustained improvement until end-August, the major impact will be in improving the soil moisture for the next rabi crop. Kharif agriculture production won?t probably be normal this year. Most current attention is on paddy. Experts are estimating an almost 15-20% drop in paddy output this year, because of an around 28% fall in acreage until July 27. Even if there is a significant improvement in rabi rice production, overall rice production may still be less than last year?s. How concerned should we be? Big comfort comes from the stockpile of more than 50 million tonnes of foodgrains, enough to take care of all PDS and other requirements for the next 13-14 months.
The real problem will emerge in next year?s rice procurement that will start around October. If kharif production is unsatisfactory in Punjab and Haryana, which contribute around 36% of rice to the central pool, then it may create problems in 2010-11. Therefore, the government should move quickly to manage its available stocks to prevent any sharp rise in prices. One option could be to sell wheat and rice through limited open market sales and also enhance the PDS allocation to states. The second alternative to improve supplies could be to import rice some time in March and April next year when it will become clear how much rice is actually available in the central pool. For that, prior planning should be made to prepare against any sudden flare-up in global markets. If India imports massively and suddenly, it will push up its cost of imports. A good option could be to import small quantities of rice at regular intervals, as is being done by Japan. This year?s poor paddy sowing has led to a 22-25% increase in area under basmati rice, with PUSA 1121 grabbing the major share. Including this in the annual procurement programme through differential pricing or else easing the export norms could give growers some relief. The key is to get plans ready early.
