As the weather office predicted a deficient monsoon season for 2015, agriculture minister Radha Mohan Singh said on Wednesday contingency plans were ready for 580-odd vulnerable districts across the country and the government was adequately prepared to contain losses of farm production. A new crop insurance policy would also be firmed up by the end of this year to protect farmers’ income in case of any natural calamities, he added.
“In the agriculture sector, there could be some losses if there are problems (of deficient rainfall). But we have policies in place to ensure the damage to the agriculture sector and the overall economy is minimised substantially,” Singh said.
The India Metorological Department (IMD) on Tuesday forecast seasonal shower for this year to be 88% of a long-period average (LPA) — the same as last year — compared with its April prediction of 93%. What has worsened farmers’ fears, already struggling with a crash in commodity prices for over a year now, is that the onset of monsoon rains over the Kerala coast has been delayed by almost a week to June 5.
A 12% deficit in normal monsoon showers dragged down the farm and allied sector growth to just 0.2% in 2014-15, compared with 3.6% a year before, and drove down grain production by 5.3% last year from a year before.
The minister said that the government was considering improving domestic supplies of pulses through imports and has asked states to place their demand of the commodity. Official granaries are brimming with other rice and wheat stocks, so there was no concern about food security, he added.
The country’s pulse imports rose to 4.5 million tonnes in 2014-15 from 3.4 mt in the previous year, as deficient monsoon dragged down produciton by almost 2 mt last year, he said.
Sources said the govenrment could explore options of implementing special scheme for the rejuvenation of perennial horticulture crops under the National Horticulture Mission and recommending the rescheduling of crops loans and providing interest subvention on rescheduled loans in drought affected areas.
The centre would boost supplies of inputs like seeds and fertiliser, and states may be asked to initiate appropriate measures and prepare for location-specific strategy, said the officials.
The Reserve Bank Of India on Tuesday raised its CPI inflation forecast up by 20 bps to 6% for January 2016, significantly influenced by its higher forecast on food inflation.
New crop insurance policy
The minister said the centre is in seeking views of states and experts on the National Farm Insurance Scheme, aimed at ensuring minimum earnings for farmers. It would be finalised by the end of this year, he added.
The scheme will provide for insurance to farmers against both loss of yield as well as a drop in prices of farm commodities. Currently, crop insurance products are based only on the yield levels and the existing crop insurance scheme covers roughly 20% of farmers.
Sources said states will likely have the flexibility to firm up their own insurance models for farmers if they so wish, factoring in local conditions. However, any state wishing to do so has to get its model approved by the centre following which it will get the central assistance for this purpose.
MSP declaration soon
The government would announce the benchmark prices for summer-sown crops in the next 15 days, Singh said. The Commission For Agricultural Costs and Prices, which suggests the minimum support prices of various crops, has recommended a modest increase of Rs 50 per quintal in the MSP of paddy to Rs 1,410 per quintal. It has also suggested a hike of R100 per quintal in the MSP of ragi to Rs 1,650 and Rs 30 per quintal for groundnut MSP to Rs 4,030.