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FOR A COUNTRY major parts of which have been starved of water for several months now following the failure of the South-West monsoon last year, the arrival of rains — albeit delayed by a week — is cause for cheer. Deficient rains in three of the last four years, especially in the western region, meant not only a drop in crop production and consequently incomes, but also a serious shortage of drinking water and animal fodder, all resulting in migration of the rural population, aggravating the demographic pressure in the urban areas. Importantly, since 1999, the country had suffered two years of negative and one year of negligible farm growth. This has surely slowed the overall economic growth. Therefore, it is important that agriculture performs well this year. The importance of rains, on which over 60 per cent of farming is dependent, can thus never be over-stated.

Importantly, the 3.4 per cent negative growth in agriculture in 2002-03 may have put paid to hopes of 8 per cent GDP growth in every year of the Tenth Plan. We need to catch up over the next four years. There has been some concern about the late arrival of rains. Weather officials are sure that a delay in the onset of monsoon is of little consequence, and important is the temporal and spatial distribution of rains during June-September. On trial is the IMD's new monsoon forecast model, as per which the probability of below normal rains is high this year. However, some private forecasts paint a different picture. All this has created some confusion, and no wonder, the commodity and the equity markets are in wait-and-watch mode.

After last year's disaster, the Centre has grown cautious and is gearing to face any eventuality. The Indian Council of Agricultural Research has set up a group to monitor the rains and advise farmers about specific crops and practices to be followed. Sowing of early kharif rice, cotton and sugarcane is satisfactory. These are early days for any definitive comments on crop status, but the outlook remains one of cautious optimism. Efforts of the last several months at strengthening the input delivery system, improving water management and meeting the credit needs of farmers are all expected to contribute to higher production, subject of course to satisfactory rains. A section of the commodity market believes the area under oilseeds and cotton could expand this year in view of the relatively higher open market prices. There is, however, nothing to suggest any significant expansion, for, in India, the supply response to prices has always been inadequate; the benefit of high open market prices do not always reach the producer. Nevertheless, speculators have driven the market up by building inventory and hedging their price risk in the futures market.

The next four months are critical for the country. Erratic behaviour of rains can unleash inflationary tendencies. Governments — both at the Centre and in the States — have their job cut out. They must ensure adequate availability of essential food items for consumers and render timely advice to growers about crops. As elections to some States are slated for the latter part of the year, there is hope the administration will swing into action in case of any eventuality.

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