A little less than a month ago, in the last week on May, the Ministry of Agriculture and Farmers Welfare released the area under coverage for major crops for the Kharif season 2022-23.
While the area under paddy (rice) showed a decrease of 2.03 lakh hectares, the area under oilseeds showed a decline of 0.85 hectares, that under pulses showed a marginal increase of 0.72 lakh hectares and coarse cereals showed a marginal increase of 0.45 lakh hectares. All these taken together, the area under cultivation fell from 71.99 lakh hectares to 70.30 lakh hectares — a decline of 1.69 lakh hectares as compared to last year.
In the same week, releasing the third advance estimate of major crops, Agriculture Minister Narendra Singh Tomar said foodgrain production is estimated at 3,305.34 lakh tonnes, with rice at ‘record’ 1,355.42 lakh metric tonnes, wheat at ‘record’ 1,127.42 LMT, and oilseeds at ‘record’ 409.96 LMT. Among other crops, bajra is estimated at 111.66 LMT, coarse cereals at 547.48 LMT, pulses at 275.04 LMT, maize at a ‘record’ of 359.13 LMT, and sugarcane at a ‘record’ of 4942.28 LMT among others.
According to the government’s third advance estimate, total foodgrain production for 2022-23 is higher by 149.18 LMT compared to the previous year, with all major staple crops — rice, wheat, maize, coarse cereals, pulses and oilseeds — registering higher production when compared to the previous years.
DELAYED MONSOONS, ELECTIONS IN KEY STATES A WORRY
However, there are worries. The onset of monsoon was delayed by a week this year, reaching Kerala on June 8 compared to May 29 the previous year. According to the IMD, the normal onset of SW monsoons is June 1 with a deviation of seven days. In fact, if one looks as the dates of onset closely, the other time in the past five years when monsoon was similarly delayed is 2019, when it finally hit Kerala on June 8.
The IMD has also said the SW monsoon seasonal rainfall over the country as a whole is most likely to be normal. However, in June, the IMD said “below normal monthly rainfall” is expected over most parts of the country with some exceptions.
As on June 14, parts of West Bengal, Odisha, Bihar, Jharkhand, eastern and western Uttar Pradesh , Uttarakhand, Haryana, Punjab, Himachal Pradesh, Jammu and Kashmir, eastern and western Rajasthan, eastern and western MP, Maharashtra, Gujarat except for Saurashtra, Chhattisgrah, Andhra Pradesh, Telengana, Rayalseema, Karnataka and Kerala reported large deficit (-60% or less). Only Arunachal Pradesh, Assam, Meghalaya, and Sikkim in the Northeast, Tamil Nadu and Puducherry in the South, and Lakshadweep received normal or excess rainfall.
Farmers across India depend heavily on monsoons for cultivation and delayed, excess or untimely rains can impact production which in turn can further fuel inflationary trends in food prices. With crucial assembly elections in Madhya Pradesh, Chhattisgarh and Rajasthan later this year, and the big general elections next year, the government does not want to leave anything to chance and therefore, has announced a slew of measures to ensure availability and keep inflation under control.
GOVT INTERVENES TO CHECK RISING PRICES
On June 2, the government announced stock limits on tur and urad dal, applicable to wholesellers, retailers, big chain retailers, millers and importers till October 31. The stock limit was set at 200 MT for wholesellers, 5 MT for retailers, and 200 MT for big chain retailers. For millers, the stock limit was set at 25 per cent of annual installed capacity or three months of production, whichever was higher. Importers, meanwhile, were barred from holding on to their stocks beyond 30 days of customs clearance.
This was done “in order to prevent hoarding and unscrupulous speculation”, to “improve availability”, and “crack down on prices of essential commodities”, the government said in a statement. After approximately two weeks of imposing stock limits, Additional Secretary, Department of Consumer Affairs, Nidhi Khare, reviewed stock disclosures with all stakeholders, including states, CWC and SWCs.
Ten days after stock limits were imposed on tur and urad, the government imposed stock limits for wheat as well on June 12 that will be applicable till March 31, 2024. While for traders and wholesellers, it is 3,000 MT, for retailers and retail outlets, it is 10 MT for each. For processors, the stock limit is 75 per cent of annual installed capacity or quantity equivalent to monthly installed capacity multiplied by remaining months of 2023-24, whichever is less.
This was done after the steep rise in the price of wheat in the ‘mandis’ compared to the same time in the past month and year. Data by the Ministry of Food and Consumer Affairs for the week beginning June 7, 2023, showed a steep rise of 8.13 per cent of wheat price in the ‘mandis’ and 11.59 per cent compared to the same time last year which may be reflected in domestic wholesale and retail prices.
Similarly, wholesale and retail price of rice also showed an increasing trend over period of a week, a month and a year. According to data shared by the same department, retail price of rice had jumped by 9.24 per cent compared to the same time last year.
A day later, Secretary, Food and Consumer Affairs, Sanjeev Chopra, reviewed the stock situation with all the states, asking them to obtain disclosures of wheat with wholesellers, retailers, big chain retailers and processors. The government also took a decision of offloading 15 LMT of wheat in the first phase and rice under the open market sale scheme (OMSS). This, the government said in a statement, is “expected to cool down the rising price of wheat and rice along with the products derived from them”.
Additionally, in another major move, the government slashed import duty on refined soyabean and refined sunflower oil from 17.5 per cent to 12.5 per cent with effect from June 15 till March 31, 2024, in order to cool prices and ensure availability. “The basic import duty is an important factor which impacts the landed cost of edible oils which in turn affects domestic prices. Reduction in import duty on refined sunflower oil and refined soyabean oil will benefit consumers as it will help in easing the domestic retail prices,” the government said in a statement.
The intervention by the government, as per data shared by the Department of Food and Consumer affairs for the week beginning June 14, has shown a reversal in the increasing trend in the price of wheat, with ‘mandi’ price of wheat falling by 2.20 per cent. However, a month-on-month comparison for rice shows an increase of 1.21 per cent.
The government announced that in the open market sale, the maximum amount that a single bidder can purchase is 10-100 MT as opposed to 3,000 MT earlier to accommodate small and marginal buyers and ensure maximum reach of the scheme. The stock position of wheat and rice as on June 14 is 308.84 LMT and 265.08 LMT respectively, a total of 573.92 LMT. “In order to ensure that inflationary trends are kept under control while ensuring adequate stock levels in the central pool, it has been decided to exclude state governments from the ambit of OMSS(D) as per the revised policy dated 13.06.2023,” the government said.
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