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Swallowing the bitter pill

Wednesday, 18 June 2014 - 6:00am IST Updated: Tuesday, 17 June 2014 - 10:00pm IST | Place: Mumbai | Agency: dna

The new government needs to take tough, unpopular steps to tone up fiscal health

The sun has been merciless. Searing temperatures and the scorched earth have made it difficult for people to step out of their homes during the day. With predictions of a delayed monsoon as well as a shortfall in the total availability of rains to the tune of 15 per cent in the northwestern region comprising Uttar Pradesh, Bihar, Madhya Pradesh, Rajasthan, Punjab, Haryana, Uttarakhand, Himachal Pradesh and Jammu & Kashmir, a deadly summer lies ahead. 

It is mid June and the mercury has already soared to 47 degrees breaking the past 35 years' record in many a place. The Indian Meteorological Department has in its latest forecast lowered the monsoon estimates. From 95 per cent of the long-term average that was expected when the first forecast was made in April, it has further lowered the estimates to 93 per cent calling it below-normal monsoon. While the North East is expected to get 99 per cent of what it normally gets, the shortfall is to the tune of 93 per cent in southern India and more pronounced at 85 per cent in the northwest regions. 

With El Nino — warm Pacific currents — likely to develop in August and strengthen further in September, there is a strong likelihood of an impending drought. Although the private weather company Skynet has predicted 25 per cent chances of a drought building up, and knowing that the Indian Meteorological Department has not been able to predict a drought in the past 135 years, I am worried at the plight of millions of small and marginal farmers across the country. Already reeling under mounting debt, and faced with a terrible agrarian distress, any shortfall in monsoon can put the deteriorating household economy back by several years.  

For the newly formed Modi government, the impending dry spell poses an immediate challenge. But what pains me is the deliberate effort to view the monsoon shortfall only in terms of a fall in growth. Many an economist/economic writer on TV channels have been repeatedly saying that the failure to push economic growth because of low agricultural production will mean that the overall economic growth will remain subdued as a result of which the Reserve Bank will not be able to lower interest rates. In other words, the economists lament how the shortfall in monsoon will be negatively affecting business sentiments. 

This is a fallacious argument. Instead of worrying about GDP growth rate, it is high time that the entire focus of the new government shifted to minimising the harmful impact on the livelihoods of millions of small and marginal farmers. This is the time to channelise the entire government machinery towards fighting the drought in a way that helps mitigate the economic suffering, and at the same time take appropriate steps to save the standing crops and put in place a contingency plan. For this, there is an immediate need to first set up a war room in the Cabinet Secretariat that monitors drought conditions on a daily basis.

I remember it was in 1987 that the country was faced with one of the worst droughts of the previous century. Almost the entire 147 million hectares of cultivable area was affected. But that was also the year when the country had a foodgrain buffer of 20 million tonnes. A meticulously planned food management programme, ensuring the availability of foodgrains in the deficit areas together with timely availability of inputs like diesel, electricity and canal water, helped tide over the crisis. Probably that was the first time after Independence that a massive drought did not lead to starvation and hunger. 

A lot has changed between 1987 and 2014. But still, drought remains a nightmare for farmers as well as the government. This year, India already has a surplus food stock of 62 million tones, which is enough to maintain normal food supplies and also keep food inflation under control. Besides stocking up on diesel to augment groundwater irrigation in the deficit states, equally important is to make available fodder and cattle feed for the animals. In any drought-like situation, it is the livestock that first feel the brunt but receive the least attention. 

In addition to ensuring that farmers get adequate power supply to keep the tubewells running, it would have been much more fruitful if the Ministry of Agriculture had launched a nationwide campaign encouraging farmers to make an immediate shift to sow paddy, the main kharif crop, with less water. The entire agricultural machinery, including agricultural universities and the state agricultural departments along with the private agribusiness companies, should have been involved in promoting the SRI method of rice cultivation which saves almost 30-40 per cent water. In addition, a massive thrust should have also been on direct sowing of paddy instead of the water-guzzling transplanting that we see all across the country. 

Agriculture is the biggest employer in the country. Almost 70 per cent of the population is directly or indirectly engaged in farming. In addition to low agricultural growth, what is more urgent is the loss of livelihood reflected through farmer suicides and increased rural-urban migration. A strong and economically viable agriculture is the foundation on which the entire economy grows. The more is the purchasing power in the hands of villagers, the more is their ability to purchase consumer goods which moves the wheels of economic growth. It is, therefore, important to provide an economic stimulus package of at least Rs1 lakh-crore to agriculture.  

The moment I talk about an economic stimulus for farmers there is an uproar of protest. But what we don’t realize is that at the time of the global economic crisis in 2008-09, Indian industry was given a stimulus package of Rs3 lakh crore. This package continued for almost three years. If the industry can be given a huge stimulus for three years, why shouldn’t poor farmers also get the benefit of an economic stimulus? After all, 70 per cent of the country too needs to survive. Their well-being determines the economic growth in the years to come.

The author is a food and agriculture policy analyst 

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