Will rabi harvest and procurement script rural recovery amid farmers' stir?

A sharp drop in returns could exacerbate farmers' woes and fuel the ongoing protest; rabi crops currently being harvested are grown mostly in the Northern parts of the country, the hotbed of the stir

With harvesting of rabi crops gathering steam across the country, all eyes are on the price that they fetch in the market and whether they would lead to any tangible improvement in farm incomes and, in turn, have a bearing on the rural recovery story.

The rabi harvest and the prices that crops fetch are also important as any sharp decline in returns could exacerbate farmers' woes and fuel the ongoing protest against the three reform acts.

A prime reason for this is that most rabi cereals, food grains and pulses currently being harvested are grown mostly in the Northern parts of the country, the hotbed of the stir.

Wheat, gram (chana), mustard are the main rabi crops that are being harvested at present.

Harvest progress and production

Latest data from the ministry of agriculture shows that till March 19, 2021, around 21 per cent of the net sown area of wheat crop has been harvested, while in the case of pulses, crops grown in 67 per cent of the net sown area have been harvested.

Coarse cereals grown on 64 per cent and oilseed grown on 73 per cent of the net sown area have already been picked by farmers

Sugarcane harvesting has been completed in around 76 per cent of the area sown.

In total, rabi crops sown in around 44 per cent of the net sown areas have been harvested till March 19, 2021.

The harvesting will further pick up pace post Holi, one of the main festivals of North India.

As far as production is concerned, latest data shows that India’s wheat output in the coming rabi harvest is expected to be a record 109.24 million tonnes, up 1.27 per cent from last year.

It is also much higher than the average production of the last five years of 100.42 million tonnes.

Chana (gram) output, according to the second estimate, is expected to be 11.62 million tonnes, up from 11.08 million tonnes last year. It is much higher than the last five-year average production of 9.77 million tonnes.

Mustard output, which is another key rabi crop, is expected to be 10.43 million tonnes during the coming season. This is almost 1.30 million tonnes more than the previous year and much higher than the average production of the last five years (estimated to be 8.30 million tonnes).

The bumper wheat harvest in the rabi season, coupled with strong production of other crops in the kharif season, is expected to push up India’s overall foodgrains production in the 2020-21 season to a record 303.34 million tonnes, from 297.50 million tonnes last year, the second advance estimate of foodgrains production for July 2020-June 2021 crop year showed.

The average foodgrains production in the last five years (from 2015-16 crop year to 2019-20 crop year) was 278.88 million tonnes.

Good monsoon, along with favourable weather, is set to aid the rise in production of major crops.

In the full 2020-21 crop year, total production of pulses is expected to be 24.42 million tonnes, which is more than last year’s figure of 23.03 million tonnes. It is also higher than the average output of the last five years, estimated at 21.99 million tonnes.

Similarly, in the case of all oilseeds, total production in the full 2020-21 season is pegged at 37.31 million tonnes. This is up from last year’s production of 33.22 million tonnes and higher than last five-year average of 30.55 million tonnes.

Sugarcane production in 2020-21 is expected to be 397.66 million tonnes, around 27.16 million tonnes more than 2019-20.

Cotton production is estimated at 36.54 million bales, around 0.48 million bales more than last year (one bale equals 170 kg).

Meanwhile, in 2020, the Southwest monsoon was 9 per cent above average. This made it the second consecutive year of rainfall being more than normal, a feat which has happened for the first time in almost 60 years.

The last time India saw two consecutive years of more than average rainfall nationally was in 1958 and 1959.

In 2020, the Southwest monsoon was more than normal in almost all parts of the country except Northwest India, which comprises major grain-producing areas such as UP, Punjab, Haryana, Rajasthan, Himachal Pradesh and the National Capital Region.

Out of 685 districts in the country, monsoon was normal in almost 75 percent of them, while it was deficient and below normal in the rest.

Prices and farmers’ agitation:

One big factor that will determine the future of the ongoing farmers’ agitation and also whether it can sustain for long could be the price that growers get of their bumper harvest.

Any prolonged and sharp decline in prices as compared to the previous years or as compared to the state-set minimum support price (MSP) for crops in which it is applicable could further sharpen the call for a legal guarantee for state intervention in the event of crop prices remaining below the MSP.

Something which can be done through providing some sort of legal guarantee to MSP.

So far in the first 15-20 days of harvest, the signals are mixed. Data shows that while prices of oilseeds namely mustard (which is the main oilseed grown during the rabi season) has been much above the MSP.

In case of chana (gram), which is the biggest pulses grown in the country by volume and is one of main harvest of millions of farmers of MP, Maharashtra, Gujarat and Rajasthan, prices being fetched in the market is though below the MSP of Rs 5100 per quintal, but better than last year’s prices.

In case of wheat, data shows though at present prices are ruling the below the MSP in some main growing states but the crop too hasn’t been harvested in full.

In both the cases of chana and wheat, how and to what extent prices remain below the MSP will be determined by the extent and spread of government procurement which is expected to start in full strength in the next few weeks.

An analysis done by Swaraj India, shows that on March 22 alone, only 15 percent of wheat crop which has arrived in the mandis have been sold at MSP, while in case of gram it is even less at 5 per cent, while 40 per cent of rabi maize crop has been sold at MSP so far between March 1 and 22 and in case of jowar, the number is 38 per cent. In case of moong (green gram), around 24 per cent of total mandi arrivals have been sold at MSP in the first 20 days of harvest.

In case of ragi and safflower, the number is even worse at nil.

The analysis further shows that in Chana alone, farmers have got around Rs 140 crore less than the price that they would have got by selling their crop at MSP in the first 15 days of the harvest season.

Around 16 per cent of the last year’s total arrivals of chana have reached the markets in the first 15 days.

Chana production is expected to be over 11.6 million tonnes this year, up from 11.08 million tonnes last year and higher than the average production of the last five years at 9.77 million tonnes.

Procurement

The Central government, meanwhile, is planning to intervene in a big way to procure crops from farmers namely wheat and chana to push up prices and also to douse farmers' anger.

The Centre has fixed a target to purchase 42.73 million tonnes of wheat in the coming crop marketing season that will start from April, which is 9.56 per cent more than the actual purchase of the previous year.

Procurement from Punjab, which is the hotbed of agitation, is expected to be around 13 million tonnes, slightly more than the actual procurement of this year, while that from Madhya Pradesh is expected to be the highest at 13.5 million tonnes.

In case of Punjab, the Centre has decided to postpone its procurement operations by 10 days to ensure that COVID protocols are followed, while in Madhya Pradesh, too the purchases have been delayed for a while due to sudden unseasonal rains.

Meanwhile, in case of chana, Nafed, the nodal agency to procure pulses, has started procurement of chana at MSP from Gujarat since the last few days. It, according to some sources, plans to purchase over 1.5 million tonnes of chana over the next few months from farmers to push up prices and also to build its inventory.

Sowing of Summer Crops

Meanwhile, acreage of summer-sown crops saw a sharp increase during the week ended March 19 as sowing continued unabated in other regions of the country.

Data showed that till March 19, summer crops have been sown in around 5.09 million hectares, which is 15.34 per cent more than the same period last year.

Summer crops or zaid crops are cultivated in the intervening period between the rabi and kharif seasons.

Sowing for these crops largely starts around March and the crop is harvested in June to coincide with the advent of the southwest monsoon.

Pulses (largely moong), coarse cereals and rice along with a variety of vegetables are the main crops growing during this period, most of which are short-duration varieties.

Though a small portion of the overall agriculture production, focus on summer crops has grown largely in the last few years as an additional source of revenue for the farmers.

The Centre too, now holds separate brainstorming seasons to strategise on ways to increase production of summer crops, which till a few years back was limited to the crops grown during the two main kharif and rabi seasons.

Meanwhile, data showed that rainfall during the sowing months of summer crops--from March 1 to 18--has halved to around 8.0 mm, from the normal of 16.0 mm.

A report by Central Water Commission as on March 18 shows that the live water storage available in 130 reservoirs in the country is 87 per cent that of the corresponding period last year and 122 per cent the average of last ten years.

The sowing data also showed that among summer crops, rice was sown in about 3.5 million hectares till March 18, or around 18 per cent more than last year.

Higher rice acreage has been recorded mainly from West Bengal, Telangana and Andhra Pradesh.

Among other crops, pulses have been sown in around 0.41 million hectares which is 37 per cent more than the area covered during the same period last year.

Oilseeds have been sown in around 0.60 million hectares, which is almost 9.09 per cent more than the area covered during the same period last year.

Coarse cereals have been sown in around 0.56 million hectares till March 18, 2021 as against 0.57 million hectares during the same period last year.