Multiple crops are being impacted by the unseasonably hot and dry rabi season in India, with potential effects for both global prices and Indian farmers. This comes after the country’s first back-to-back drought in three decades after an El Niño weather pattern contributed to India’s driest monsoon season in six years.
Reuters reports that wheat planting has been delayed by at least a week due to high temperatures. Wheat acreage is currently down 26 percent for the season, with 24.22 million hectares planted so far. In contrast with its other crops, India produces only one wheat crop per year.
While wheat stocks are not a particular concern for the country after several years of bumper output, Reuters suggests that concerns over production for the world’s second largest wheat producer could serve to limit the current decline of global wheat prices.
The Business Standard blames the late start to the planting of wheat in irrigated areas on the delayed harvest of the previous season’s paddy crop, while delays to mustard crop planting in rainfed areas are attributed to low soil moisture (wheat and mustard are the two main rabi crops). As of 13 November 2015, the Ministry of Agriculture estimated the extent of rabi planting as 12.32 million hectares, almost 23 percent less than the same period last year, and that the area covered so far is 6.52 million hectares less than normal for the period. Mustard planting in particular is down 50 percent from this time last year.
In contrast, the Business Standard reports planting well underway for pulses and suggests high market prices this year in India could be a factor in increased rates of planting compared to last year. As of 13 November 2015, pulses had been sown on 3.89 million hectares, up from 3.44 million hectares in the same period last year. Chickpea in particular was accountable for 2.44 million hectares, almost 43 per cent more than the area covered during the same period last year. Earlier this month, the Cabinet Committee on Economic Affairs (CCEA) raised the Minimum Support Price (MSP) for masoor (red lentils) and gram, the two most-grown pulses during the rabi season, by 250 rupees ($3.78 USD) per quintal. The CCEA also recommended a bonus of 75 rupees ($1.17 USD) per quintal.
In a previous blog on pulse prices, however, IFPRI South Asia Director PK Joshi notes that producers in this context are also not beneficiaries of what Joshi calls the “opportunity price.” When the market price for pulses rise, the incentive to collude is stronger because the wedge between the price at which traders buy and the one at which they sell is larger. However, even though farmers get a higher price if the MSP rises, it is still a price far away from the market price that could likely be received in an open market environment. Joshi also highlights that pulses are increasingly being grown in marginal, non-irrigated environments; adverse weather conditions over the course of the season could put already vulnerable farmers at greater risk of crop loss.
BY: Rachel Kohn, IFPRI