Inflation has cooled in recent months but the next monsoon holds the key. With fear of an El Niño effect impacting it, academicians and policy makers are worried about the possible impact on farm output and food inflation. Prabhu Pingali, director of the Tata-Cornell Agriculture and Nutrition Initiative at Cornell University and former director of the agricultural and development economics division of the Food and Agriculture Organization, tells Sanjeeb Mukherjee he isn't that alarmed on basics, while suggesting lines for policy. Edited excerpts:
Food prices in India have relatively been stable in the past few months due to a bumper harvest. Do you think it could spike if the 2014 monsoon is not satisfactory? Which crops will see a big impact?
I do not see too much of an impact on rice, wheat or maize. It will be visible on oilseeds, pulses and perhaps on vegetables such as onions.
The global food price index jumped almost 2.6 per cent in February, mainly due to uncertain weather. Will the price trend in food items in the coming months remain on a higher side, also as the coming monsoon season for large parts of Asia does not look very promising?
The food market has been high for the past few years and the price index has varied. Oilseeds and pulses have seen a
higher jump than cereal crops (rice and maize). However, I am not certain we will witness the same hike as in 2010-11.
How can global food prices have an impact on overall food inflation in countries like India and what should the government do to neutralise its impact?
I don’t think it will have an impact on food inflation, as India has protected itself from global food prices and much of India has a huge wheat and rice surplus, along with food stocks. From only the staple grain point of view, I do not see too much of an impact. If you had to pick, the change would be observed in oilseeds, pulses, etc. Having said that, I don’t see it impacting food inflation in India.
Do you think India is now better prepared to deal with weather uncertainties?
India has invested significantly in research and development (R&D) in this area, such as rice varieties that are tolerant to drought and flooding. These can definitely help manage adverse weather conditions. Additionally, small scale investments such as pumps can also help deal with weather uncertainties.
How should the government respond to such weather uncertainties, apart from the usual investment in irrigation, etc. How can Indian agriculture be made weather-proof?
Sustained R&D investments in crops that tolerate weather conditions (flooding, drought, high temperature) would help. This would require investments in breeding, crop management and biotechnology.
It has been usually seen that any drop in production due to any weather uncertainty usually leads to a clamping on free trade of farm goods. Do you think this is a right response? If not, what should be done?
I don’t think creating uncertainty in free trade of farm goods is helpful. The government should work on enhancing supplies and let the market decide the pricing. Wherever the government has tried to control domestic prices through opening or closing trade, it sends wrong signals to farmers. They believe their efforts in enhancing supplies are not secure.
Indian agriculture has seen some good times in the past decade or so, with growth rates being much more than earlier. How much has been the contribution of the non-cereal sector -- mainly horticulture, livestock, fisheries and dairying?
Overall diversification of agriculture has had a big impact. While rice and maize have witnessed a continuous progression, other aspects such as vegetables, horticulture and fisheries have a huge potential. We are yet to see the big wave of growth within these sectors.
Despite that, do you think the policies in Indian agriculture are skewed in favour of the cereal sector?
Yes, it’s true. Unfortunately, sectors such as livestock or horticulture have not got enough support from the policies. The historic bias has always been towards the cereal sector and this hasn’t changed. I don’t think the (new) Food Security Act is changing this. However, if we are trying to help agriculture grow, we need to look at the diversification across sectors and across belts (rural and urban)
Despite producing bumper foodgrain, fruits and vegetables in recentyears, food inflation continues to be high, while farmers complain they are not able to recover their cost of production. Where is the problem and what else should be done to solve this?
First, we need to look at whether the cost of production is the absolute measure and whether the cost of production per tonne is being managed or not. If the latter measure is rising, that is a bigger issue to be worried about. Rising wages is another concern and we need to look at labour saving techniques.
India faces an increasing need to feed its more than a billion population. What should be the strategy to rejuvenate farming?
I believe India has done phenomenally well in managing to feed its population with the staple cereal products until now. If the current production of cereal products continues, India will not face a problem in that area.The biggest problem India is going to face is that it has more of what we term a middle class population. This population is looking for a diversified diet, something India is not prepared for.