2.2 Rainfall and Water Storage

Transcription

1 2. AGRICULTURE 2.1 Overview The Economic Survey notes that a sudden drop in the growth rate of agriculture sector to about 1.6% from that of an average growth of about 4.9% over the preceding three years has been disappointing, though not unexpected. The uneven and erratic distribution of monsoon, sluggish growth of kharif sowings and fall in the water storage levels, together, raises doubts about the prospects for The silver lining is that the Indian Meteorological Department (IMD), in its second stage forecast, has predicted monsoon to be 93% of the long period average for the entire country in the month of July. Ministry of Agriculture would chalk out two-pronged contingency plan with states and would implement it if rain gets further delayed beyond 15 July. The Planning Commission has recommended an outlay of Rs 72,000 crore for the agricultural sector. The heightened expectation of steep increases in minimum support price (MSP) for various kharif crops could have a significant impact on sowings and overall raising hopes regaining the ground from uneven rainfall. 2.2 Rainfall and Water Storage Regions Table 2.1: Cumulative Rainfall Received in Monsoon Season 2009 Normal Rainfall Actual Rainfall during June (millimetres) Percentage Deviation North-West India Central India South Peninsular India North-East India Country as a whole Deviations: excess: +20 % or more; normal: +19 % to 19 %; deficient: -20 % to 59 %; scanty: -60 % to 99 %; no rain: -100 % Source: Department of Agriculture and Cooperation, Ministry of Agriculture Government of India, ( 7 The southwest monsoon, after progressing well covering many parts of the country by 25 May 2009, witnessed weakened activity, mainly affecting the central and northwestern regions. It revived however around the first week of June owing to which there were a few spells of precipitation recorded across some parts of the country. This phase, however, was - short-lived and the country once again experienced sluggishness in rainfall activity, which persisted till the last week of June. Thereafter, there has been again some improvement in monsoon, but it has not yet fully revived causing apprehensions about the deteriorating conditions of kharif sowings and dwindling water storage-levels in the major reservoirs of the country. The cumulative rainfall recorded as on 24

2 June 2009 for the monsoon season (June - September) 2009 has remained 54% below normal (Table 2.1). According to All India Weekly Weather Watch Report by IMD, 8 out of 36 meteorological sub-divisions have received normal to excess rainfall and 28 have experienced deficient to scanty rainfall. Despite deficient rainfall in the month of June in most parts of the country, MET has remained optimistic about "good rains" during the month of July. It further reiterated that monsoon would not act as a worrisome situation as it covers the entire parts of India by 15 July. If the monsoon fails to reach the coast by 15 July then the states of Orissa, Gujarat, Andhra Pradesh, Maharashtra, Haryana and Uttar Pradesh are likely to witness drought-like situation. Water Storage Data published by the Central Water Commission (CWC) shows that current live storage of water almost in all water reservoirs has fallen drastically by the first week of July 2009 over that of the previous year due to prolonged dry spell since December and poor pre-monsoon showers, pointing out the possibility of water supply shortage for farming as well as power generation activities (Table 2.2). As per the reports, there has been some revival recorded in monsoon by the last week of June, which is expected to improve water storage situation slowly and gradually. The total live water storage in the 81 major reservoirs has reached a level of billion cubic meters by the end of June 2009, 56% below than the last s year level and 35% lower than the ten-year average. Of the total 81 reservoirs, 21 reservoirs have registered a storage of above 80%, 20 have recorded between 50% - 80%, 12 between 30% -50% of the normal level and 15 reservoirs have storage below 30% of normal storage. There were 13 reservoirs namely Balimela and Rengaliin in Orissa, Kabini and Krishnaraja Sagar in Karnataka, Gandhi Sagar and Indira Sagar in Madhya Pradesh, Isapur, Upper Tapi, Bhima and Yeldari in Maharashtra, Mahi Bajaj Sagar in Orissa and Kangsabati in West Bengal having no live storage. The low precipitation has left the ground dry and crops sown have been damaged owing to which Indian scientists are seriously considering to have cloud seeding this year. 8

3 States Table 2.2: Water Storage in the Major Reservoirs Storage as a Live Reservoir percentage of No. of Capacity Storage Live Capacity Reservoirs at FRL* (BCM) at FRL (BCM) Reservoir Storage (BCM) Storage as a percentage of Live Capacity at FRL 2-Jul-09 3-Jul-08 Northern Region Himachal Pradesh Punjab Rajasthan Total Eastern Region Jharkhand Orissa Tripura West Bengal Total Western Region Gujarat Maharashtra Total Central Region Uttar Pradesh Uttrakhand Madhya Pradesh Chhattisgarh Total Southern Region Andhra Pradesh Karnataka Kerala Tamil Nadu Total Country Total * Hydel Power Capacity Having Capacity More Than 60 mw, BCM: Billion Cubic Metre, FRL: Full Reservior level Source: Central Water Commission ( Second Stage Monsoon Forecast As per a report by IMD, the long range forecast update for 2009 southwest monsoon season (June to September) is likely to be below normal. The seasonal rainfall for the country as a whole is likely to be 93% of the long period average (LPA) with a model error of (+) 4%, lower than the earlier forecast of 96% of LPA with model error of (+) 5%. The long period average (LPA) for the all-india season-wide rainfall is 89 cm, based on rainfall data from 1941 to Similarly, rainfall for the entire monsoon season 2009 over 4 broad geographical regions, 9

4 namely, northwest, northeast, central and southern peninsula has been pegged at 81%, 92%, 99% and 93% of the LPA, respectively, with a model error of (+) 8% each. It reveals that northeastern and south peninsula regions are likely to receive below normal rains while northwestern parts would have deficient rains; central India is expected to have a normal monsoon. The precipitation over the country as a whole in the month of July 2009 has been projected to be at 93% if its LPA and that in the month of August would be 101% of LPA both with a model error of + 9%. Generally, most of the kharif sowings take place during the month of July; hence expectations of a good monsoon in this month play a crucial role in realizing normal sowings Sowings of Major Crops Farmers are concerned about freshly sown crops, which are confined mainly to the regions that have witnessed hiatus after the monsoon s active spell. It has been reported that after a few weeks of delay, the country's kharif sowing has finally picked up pace as the southwest monsoon has shown some signs of revival. As per report released by Crop Weather Watch Group, total area covered under principal kharif crops, as on 26 June 2008, was less by 17% at lakh hectares compared to the corresponding period of the last year. Area under crops like jowar, maize, tur, urad, moong, castor, sunflower and cotton have shown a noticeable improvement in their sowings, while that of others have recorded downtrends in their respective sown acreages. Up till now oilseeds have registered the highest decline among food crops (Table 2.3). Crops Table 2.3: Progress in Sowings of Major Kharif Crops as on 26 June 2009 (lakh hectares) Normal Percentage Variation Total Foodgrains Rice Coarse Cereals Jowar Bajra Maize Total pulses Tur Urad Moong Oilseeds Groundnut Sunflower Sesamum Soyabean Sugarcane Cotton Jute Total Area Source: Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India ( 10

5 The incidence of pest & diseases has generally remained below threshold levels for most of the crops. No shortage of Chemical / Bio-pesticides has been reported from any state or union territory. Sowings of principal kharif crop rice, started on a good note, but due to paucity of rainfall it has been lagging behind by 27.5% to 18.3 lakh hectares, compared to 25.2 lakh hectares covered during the last season. The shortfall in sowing is highest in states like Punjab Haryana and Uttar Pradesh. It is anticipated that, if there is any further delay in precipitation, it would affect sowings of paddy, but it is likely to raise the area under basmati rice by 3-5% as it is sown generally by late July. Experts are of the view that the acreage under paddy sowings is likely to increase with agriculture ministry s proposed to raise a MSP of rice to Rs 950 per quintal, up by Rs 50 over the MSP of last year. Coarse cereals have witnessed decline in their sowings, mainly on account sluggishness recorded in sowings of bajra; the coverage under maize has shown a fractional improvement of 0.4 lakh hectares to 8.3 lakh hectares, while jowar has shown a marginal improvement of 6.6 lakh hectares to 39.1 lakh hectares, respectively. This improvement in sowings has not been able to cover up the losses bared of low sowings of bajra, which led to fall in overall coarse cereals as a group. Lower coverage of the crop was recorded in Haryana, Uttar Pradesh, Madhya Pradesh and Rajasthan. Prices of all pulses have shown a substantial increase in domestic market in the last few months, contributing to increased sowings by 51.8% to 4.5 lakh hectares with major crops like tur, urad and moong each showing a reasonable improvement in their sown acreages. Sowings of tur has risen by around 0.72 lakh hectares to 1.1 lakh hectares, urad by 0.24 lakh hectares to 0.41 lakh hectares and moong by 0.48 to 2 lakh hectares. Acreages under oilseeds as a group have dipped by 12.6 lakh hectares to 6.6 lakh hectares from 19.2 lakh hectares covered a year ago. Acreage under groundnut, sesamum, sunflower and nigerseed has slid down, while, sunflower and castor were the only major kharif oilseed crops that saw improvement in sowings. The drastic decline is observed in the coverage of soyabean especially in Madhya Pradesh and groundnut in Gujarat. 11

6 Sugarcane sowing has been hit by mounting arrears, poor rains, poor price realisation in the last season owing to which area sown has shrunk by 3.6% to 41.8 lakh hectares. However, it is predicted that coverage under sugarcane might increase due to rise in statutory minimum price (SMP) from Rs to Rs per quintal to be payable by mills in the forthcoming crushing season of In case of cotton, the coverage has increased by 8.2% to 18.8 lakh hectares as against 17.4 lakh hectares covered last year. This rise is attributed to good price realisation offered to farmers due to steep increase of MSP by 30% to 40% last year. Jute sowings have been completed in 6.9 lakh hectares so far during the current kharif season. Thus, sowing operations and related activities are expected to gain pace gradually in spite of uneven rainfall distribution of monsoon across the country. However, planting of crops is yet to fully recover from the setback it received due to the erratic rainfall. Some of the states have been asked to prepare for supplying seeds of the drought resistant variety Supply Management Wheat Procurement: Table 2.4: State-wise Procurement of Wheat (lakh tonnes) States (01 Oct 26 June) Marketing Season Percentage (Apr-Mar, ) change Punjab Harayana Uttar Pradesh Madhya Pradesh Rajasthan All India Source: Department of Food and Public Distribution Government of India, ( The central and state agencies have so far procured lakh tonnes of wheat from farmers in marketing year (March-April) , displaying a rise of 11.2% as against last year's purchase of lakh tonnes (Table 2.4). Punjab has been as usual the largest contributor to the central wheat pool having a share of 43.3% at lakh tonnes and has experienced a hefty rise of 7.9% in procurement as compared to that of last year. Wheat procurement in almost all states, excluding Madhya Pradesh, has exceeded the total procurement level than that attained during the previous marketing season. 12

7 Rice procurement Procurement of rice, upto 26 June stood at lakh tonnes, 18% higher than lakh tones attained during the same period a year ago (Table 2.5). This rise in procurement can be attributed, mainly, to bumper harvest in Punjab, Andhra Pradesh and Uttar Pradesh. Punjab has maintained its position to be the largest contributor to the central rice inventories, accounting for (27.8%) to 85.4 lakh tonnes, registering an increase of 6.8 lakh tonnes procured in the previous year. While states like Andhra Table2.5: State-wise Procurement of Rice (lakh tonnes) (01 Oct - 26 June) Total Procurement in Marketing States Change Season in % (Oct-Sept ) Andhra Pradesh Chhattisgarh Haryana Kerala Maharashtra Orissa Punjab Tamil Nadu Uttar Pradesh Uttarakhand West Bengal All India Source: Department of Food and Public Distribution Government of India, ( Pradesh and Uttar Pradesh have depicted improvement with their respective shares in the total procurement standing at 24.3% and 11.8%, respectively. Other major contributors like Haryana and Chhattisgarh have witnessed declines in procurement levels by 12.4% to 25.6 lakh tonnes and 9.4% to 14.3 lakh tonnes, respectively compared to purchases in the previous year. Procurement Made by NAFED during National Agricultural Cooperative Marketing Federation of India Limited (NAFED) undertook procurement of oilseeds, pulses and cotton under Price Support Scheme (PSS) as prices fell below the MSP. During , NAFED has procured 535 million tonnes of copra aggregating to Rs 2.17 crore in Kerala, Tamil Nadu and Karnataka, lakh million tonnes of raw cotton valued at Rs 5, crore in Maharashtra, Gujarat and Andhra Pradesh, 12,060 million tonnes of sunflower seed valued at Rs crore in Andhra Pradesh, Karnataka, Maharashtra and 40 million tonnes of groundnut valuing Rs 0.09 crore in Uttar Pradesh under PSS. NAFED accumulated few commodities under Market Intervention Scheme (MIS) on request from the state governments, to protect farmers from making a distress sale in the event of a bumper crop (Table 2.6). 13

8 State Table 2.6: Procurement made by NAFED under MIS Scheme during Commodity Quantity Allowed (in million tonnes) Market Intervention (Rs per MT) Value in (Rs Crore) Uttar Pradesh Potato 1,00,000 2, Mizoram Chilli 1,810 28, West Bengal Potato 1,00,000 2, Mizoram Passion Fruit 9,000 7, Uttarakhand Apple 1,500 4, Himachal Pradesh Apple 38,000 4, Uttarakhand Apple 1,500 4, Mizoram Chow chow 6,450 4, Nagaland Ginger 15,000 5, Andhra Pradesh Oil palm 30,000 5, Karnataka Arecanut white 6,000 69, Arecanut Red 4,000 89, Uttar Pradesh Potato 1,00,000 2, Nagaland Orange 16,000 5, Karnataka Palm oil 800 5, Total Source: Economic Survey Stock: As per the data available from Food Corporation of India (FCI), stock levels of both the staple foodgrains (wheat and rice) have exceeded their buffer requirement of 162 lakh tonnes (as required on April 01) to lakh tonnes till 30 April 2009 (Table 2.7). Stock of wheat and rice in the central warehouses has been around lakh tonnes and lakh tonnes, respectively, due to record wheat and rice procurement made by state agencies aided by bumper harvest and attractive minimum support prices. Table 2.7: Stocks of Foodgrains as on April 04, 2009 (lakh tonnes) Foodgrains With State Buffer With Government Total Norm as FCI Agencies on April 1 Rice* Wheat Total Unmilled Paddy with FCI & State agencies also shown in terms of Rice Source: Food Corporation of India (FCI), ( 14

9 Offtake Table 2.8: Offtake of Foodgrains during June-2009 under TPDS scheme (in metric tonnes) Allotment Foodgrains AAY BPL APL Rice Wheat Offtake Rice Wheat % Lifting Rice Wheat Source: Food Corporation of India In case of distribution of foodgrains, as per the latest data available with FCI, offtake of rice and wheat for the month of June 2009 under Antyodaya Anna Yojana (AAY) stood at 71.07% and 59.93% of allotment, respectively. Offtake of rice and wheat by the households under the Below Poverty Line (BPL) have constituted % and 50.72% of their corresponding allocations and offtake of the same by that Above Poverty Line (APL) have accounted to 68.95% and 59.78% of allotment, respectively Highlights of Budget Farm credit: Target for agriculture credit flow set at Rs.3, 25,000 crore for the year is much higher than Rs 287,000 crore targeted for Continuing with the interest subsidy scheme for farmers, government shall pay an additional 1% subsidy to those who repaid their loans on time Rs 411 crore over the February interim budget Debt relief for farmers: A farmer having more than two hectares of land has to pay 75% of this overdue under Debt Waiver and Debt Relief Scheme before 30 th June 2009 but this has bee extended to 31st December A taskforce is proposed to be set up to examine and suggest future course of action for the issue of debt taken by a large number of farmers in some regions of Maharashtra from private money lenders who were not covered by the loan waiver scheme announced last year. Accelerated irrigation benefit programme: Allocation under Accelerated Irrigation Benefit Programme (AIBP) increased by 75 % over last year s budget. Allocations under Rashtriya Krishi Vikas Yojana (RKVY) have been augmented by 30 % in Budget over budget

10 Cyclone Aila: Allocation of Rs 1,000 crore would be used for rebuilding of the damaged infrastructure caused due to cyclone Aila in West Bengal. Fertilizer subsidy: To ensure balanced application of fertilizers for increasing agricultural productivity, Government intends to move towards a nutrient-based subsidy regime so as to cover larger basket of fertilizers with innovative fertilizer products available in the market at reasonable prices. It is intended to move to a system of direct transfer of subsidy to the farmers in due course. National Food Security Act: National Food Security Act to be brought in to ensure entitlement of 25 kg of rice or wheat per month at Rs 3 per kg to every family living below the poverty line in rural or urban areas. Food Security Bill to be put on the website of the Department of Food and Public Distribution for public debate. Environment and climate change: In furtherance to National Action Plan on Climate Change, eight national missions representing a multi-pronged long-term and integrated approach to be launched budgetary allocation under National River and Lake Conservation Plans has been increased from Rs.335 crore in Budget to Rs.562 crore in Budget Special grant of Rs.100 crore is given to Indian Council of Forestry Research and Education, Dehradun. Allocation of Rs.15 crore each to Botanical Survey of India and Zoological Survey of India has been done. An additional amount of Rs.15 crore to be allocated for Geological Survey of India. Custom duties on agricultural products: Concessional customs duty of 5% on specified machinery for tea, coffee and rubber plantations to be reintroduced for one year, upto 6 July Customs duty on cotton waste to be reduced from 15% to 10%. Customs duty on wool waste to be reduced from 15% to 10%. Customs duty on rock phosphate to be reduced from 5% to 2%. Customs duty on mechanical harvester for coffee plantation to be reduced from 7.5% to 5%. Special countervailing duty (CVD) on such harvesters has also been reduced from 8% to nil, by way of excise duty exemption. 16

11 2.6. Trade in Agriculture Goods Oilmeal exports slumped by 33% to 197,593 tonnes in June as against 295,204 tonnes recorded a year ago, while the exports in April-June were 614,528 tonnes, down by 57% on y-o-y basis. This drop is recorded for the sixth consecutive month, due to lower demand and prices in traditional Asian markets although sales to China soared during the same period. Sales to traditional Asian markets like Vietnam, South Korea, Japan, Indonesia and Thailand dropped sharply. Exports to Vietnam during April-June 2009 fell by 51.5% to 2,00,677 tonnes, in case of South Korea dropped by 67.2% to 70,644 tonnes; to Japan by 56.1% to 83,436 tonnes; to Indonesia fell by 47.9% to 47,821 tonnes and to Thailand by 52.5% to 72,118 tonnes. Oilmeal exports to China jumped by 71.4% during these three months to 93,289 tonnes, mainly due to higher shipment of rapeseed meal. Data compiled by the Textile Commissioner displays that total registrations of raw cotton exports have reached nearly 32 lakh bales between August 2008 and June 2009, while the actual shipments touched lakh bales. Exports of raw cotton have come down from 2.56 lakh bales in May to just 92,070 bales in June. This slowdown is expected to extend mainly on higher domestic cotton prices supported by absence of fresh buying from overseas market. Coffee exports have dropped by 20% in the first six months of this year due to reduction in global demand. Coffee exports stood at 103,621 tonnes during January-June 2009 as against 130,506 tonnes in the corresponding period of the previous financial year. It is expected that the current coffee year (October September 2009) would conclude with exports in the range of 180, ,000 tonnes, which would be 14-18% lower as compared with that of previous coffee year. It is estimated by the Coffee Board that by the end of the current coffee year, India s total coffee output would be around 262,300 tonnes, which is 10 % lower than the initial estimates. Table 2.9: Exports of Oilmeal Meal June May April March Feb Jan Soya Rape Groundnut Castor seed Rice Bran Extraction Source: Media According to figures released by the Tea Board, Indian exports during the first five months of 2009 have fallen by almost 13 million kg. The unit realisation per kg of tea has increased by 31% due to global shortage of the commodity to touch Rs for the five 17

12 months. The total production during January-May 2009 has stood at million kg as against million kg during January-May Drought like conditions were recorded in the early part of the year in the major areas of Dooars and Terai, which significantly led the production to fall from North India. While in South India, frost during the month of December and January, followed by continuous drought in the following months led to a drop in production. Exports of marine products earned a record Rs 8, crore during fiscal year with 6.02 lakh tonnes of seafoods being shipped out of the country. In dollar terms, it amounted to US $1, million. Right policies and interventions by the union government in addition to Marine Products Export Development Authority (MPEDA) along with the proactive role played by the industry helped in achieving a positive growth in exports for the fifth consecutive year. Frozen shrimp continued to be the major export item accounting for 44% of the total export earnings, though its share in the exports during the period dropped by 8% in quantity, 4% in rupee value and 15% in dollar terms. Tuna exports increased from Rs crore to Rs crore, registering a growth of 287% due to implementation of a scheme of converting existing trawlers into tuna long liners. The European Union remained the largest market for Indian seafood accounting for 1.51 lakh tonnes (25%) in quantity and earning Rs 2,800 crore (32.5%) or US $623 million (33%). Exports to the US fell further to US $ million (-10.18%) Major Developments and Policy Initiatives India's current sugar stock position is enough to take care of the demand for next four months, despite lower production of the sweetener this year. According to industry sources, sugar mills have over 93 lakh tonnes of stocks (including carryover from last year), which is over 66% of the estimated output of lakh tonnes till May-end this season. If the quota of about 20 lakh tonnes for June is deducted from the stocks, assuming that the entire quantity was sold in that month, at least 73 lakh tonnes of sugar should be available between July and September as the new season will begin from October. The centre has released lakh tonnes of sugar, both levy and non-levy, for July. The central government on 19 June has allowed exports of 25,000 tonnes of non-basmati rice to South Africa through PEC. The Directorate General of Foreign Trade (DGFT) issued the 18

13 notification, that the rice to be exported would have at least 25% broken grains. This shipment is expected to be completed by September Total arrivals of cotton during the season across the country amounted to lakh bales, of which lakh bales i.e. 45% have been mopped up by Cotton Corporation of India (CCI) and NAFED as MSP of cotton was ruling higher than prices prevailing in the open market. CCI alone purchased lakh bales, which included lakh bales in Maharashtra, lakh bales in Andhra Pradesh, lakh bales in Gujarat, lakh bales in Punjab, 2.58 lakh bales in Haryana, 1.55 lakh bales in Rajasthan, 7.36 lakh bales in Madhya Pradesh, 1.62 lakh bales in Karnataka and 0.71 lakh bales in Orissa. NAFED s total purchases of lakh bales were concentrated in Maharashtra (35.21 lakh bales), Andhra Pradesh (1.34 lakh bales) and Gujarat (1.17 lakh bales), respectively. The government is considering a proposal to launch a special venture capital fund for the poultry sector, under which value addition in poultry products would be promoted. This fund would help small farmers who have been reeling under the impact of repeated occurrences of bird flu disease and falling exports Summing up Kharif season has commenced with the onset of southwest monsoon in some regions of the country. Delay in advancement raised concerns for early sown crops, but revival of monsoon would diminish the apprehensions felt. It is forecasted that, there would be good monsoon activity in the month of July as it plays a crucial role in determining sowing prospects. The only silver lining observed so far is the record procurements of major staple foodgrains, wheat and rice, that have pushed up stocks in the central pool exceeding their required buffer norms. 19