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  1. Area under paddy increases, but sugar crisis keeps farmers jittery

Area under paddy increases, but sugar crisis keeps farmers jittery

Farmers moving to other crops due to crisis in the sugar sector, which led to cane arrears in excess of Rs 21,000 crore, may be a reason for the fall in sugarcane plantation.

By: | New Delhi | Published: May 16, 2015 1:49 AM

With agencies predicting a sub-normal monsoon, summer sowing has begun on a modest note. According to the agriculture ministry data, till Friday, the planting of paddy crop has risen 20% y-o-y, but that of sugarcane fell 1%.
The area under paddy cultivation has risen to 1.80 lakh hectare till Friday against 1.5 lakh hectare last year. However, cane coverage dropped to 40.18 lakh hectare as of Friday against 40.58 lakh hectare last year.

Farmers moving to other crops due to crisis in the sugar sector, which led to cane arrears in excess of R21,000 crore, may be a reason for the fall in sugarcane plantation.

Since summer sowing has barely started, the data for other crops are unavailable. Summer planting usually starts around mid-May and picks up with monsoon.

sugar crisis

Late last month, the Indian Meteorological Department (IMD) had predicted monsoon at 93% of the benchmark average — gloomier than the weather office’s first long-range forecast last year. This year, it also lined up three probabilities — 28% for a normal monsoon, 35% for less than normal shower and 33% for deficient.

Though monsoon is expected to hit the Kerala coast on May 30 from where it enters the mainland, it’s still unclear how the monsoon will progress after that. Moreover, if the geographical spread of the showers remains erratic, along with a lesser rainfall, sowing would be adversely affected.

While a normal monsoon is crucial to push the economic growth, given a weak investment climate, tepid export growth and fragile consumption, a Crisil Research note says a deficient monsoon, if it comes true, could shave off 50 basis points from the agency’s GDP growth forecast of 7.9% for the current fiscal. However, Skymet Weather Services has predicted a rainfall at 102% of the long-period average and it also does not expect the El Niño condition, which is responsible for drought, to play out this year, although climate researchers abroad are predicting an enhanced probability of such a dreaded scenario in 2015.

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