Managing Seasonality and Droughts Challenges Galore

The drought this year has resulted in declining rural income and demand. Thus, companies are cutting back on production plans for rural India, causing a spiraling impact on sales and purchases. Let’s explore the challenges ahead and how they can be tackled, says Prof CK Sabharwal, MD, Crop Health Products
Managing Seasonality and Droughts Challenges Galore

A back to back drought this year, courtesy the El Nino effect, has crippled farm life in many States, affecting both agricultural and industrial output. Indian economy may be spluttering though resilient. Shop end data shows declining rural demand. Farm income is down. About 833 million rural people are looking at less money to spend. Thus, companies are cutting back on production plans for rural India, causing a spiraling impact on sales and purchases. TV sales have fallen 16 percent; farm sector growth is a sad 1.4 percent in April – June 2015; tractor sales are down 23 percent and rural wages have barely grown 4.6 percent ending June compared to 12 percent in previous year. Besides, motorbike sales that sell 70 percent in rural India have declined 0.36 percent, so have sales of SUV’s and commercial vehicles decreased by 7.4 percent. The spending is down to basics and the marginal farmers are the most critically affected lot. Real estate downsizing in towns has sent labor packing back to villages and infrastructure projects are stalled. Landless labor daily wage is only Rs 272.87 per day. The schemes managed by Ministries of rural development are at best sluggish in their delivery of benefits. (Source: TOI & HT reports). “Make in India” may be good for morale, but the ground reality is far from rosy – indeed social and economic chains are barely held together at this time.

The farmers’ story
As you drive through the cotton fields of Punjab and Haryana, the crop looks wilted, for want of irrigation and ravaged by sucking pests. About 70 percent of the crop is reportedly damaged due to white fly infestation and the farmers are demanding Rs 40,000 per acre as compensation against Rs 8,000 sanctioned so far. The administration and police are raiding warehouses allegedly stocked with spurious fertilisers and pesticides. While, Vinod, Sales Manager with LG, wanting to meet his targets for TV’s and washing machines, from the region, is in for a surprise. Dealers are unlikely to place orders for fresh stocks’ payments are likely to be delayed maybe for over 1 year, in Bhatinda, Sirsa and Hissar districts. In rural households, marriages of young girls are likely to be deferred; the grandfather, Lalaji, having promised a motorbike to his grandson may have to apologetically decline the purchase; most spending plans in Punjab, Haryana, Andhra Pradesh, Karnataka and Maharashtra will have to take the back burner, at least for a year. In worst affected belts, farmers have committed suicide, the indebtedness too fearful to handle and the household tensions of day to day misery too much to manage. And we live in modern India, slated to become a future super economic power by 2025, in the region! Can numbers define happiness, emotions, poverty or quality of life? Can GDP numbers overshadow caste, diktats, culture and practices that riddle rural Indian households? Old habits die hard!

Minimum Support Prices (MSP) have not kept pace with rising input costs. Sunflower input cost is Rs 4,114 and MSP Rs 3,800, Jowar cost is Rs 1,929 and MSP Rs 1,570 per quintal. Cotton, paddy and sugarcane prices are down too. Farmers have not been paid by sugar mills. And the middlemen take the cake and eat it too! The ‘Aartias’, the ‘Shroffs,’ and the commission agents are charging over 3 percent interest per month on lending.

Everyone knew about the impending El Nino coming this year. Australia forecasted it; our MET department analysed it and the Government was sensitised. And despite early warning systems doing their job, few proactive steps were taken. Mushrooming varieties of GM BT cotton flooded the market, difficult to distinguish real from fake. Alternative cropping was not undertaken. Pesticide dealers continued to lure farmers to undertake sprays, yet few were undertaken in first and second in star stages of sucking pests. Irrigation through canals and rivers did not reach the majority of farmers. The Agricultural University directives probably fell on deaf ears. Everyone made hay while the sun shone!

And the sun really burnt the ground, parched the lands, while, scanty rains and thundering clouds, created a wonderful humid environment for pest multiplication in September. Result mayhem! Even after six decades of independence, nature, when it gets angry, takes a heavy toll in our country. And there seem to be no ready answers that will mitigate future turmoil and wrath that floods and droughts will unleash on our by now resigned to fate, agricultural population. Pathetic indeed! Indians will glorify the country’s diversity in Harvard case studies and lectures. And the applause will resonate in perfect harmony with the crying of the wailing widows, in the hinterland. But there is always a price to be paid for lethargy, lack of policy and its execution on ground, especially when 29 States slave to political hunger, each skim the cream, as best as they can.

A different tale for FMCG
The impact of agro-climatic conditions is felt far and wide. But FMCG goods escape these events most of the time. Soaps and shampoos, biscuits and beverages, apparel and shoes, mobiles and recharge, food and entertainment, petrol and diesel, and such – continue to tax the rural folk wallet. These are necessities and there is always money to be found. So happiness and sorrow co-exist and the tolerant rural households take each day as it comes, with no great expectations from Government and family alike!

It may be a better idea to increase investments in water management and irrigation projects, crop management practices and integrated pest management adoption, especially during drought years. Crop rotation, conservative tillage and technology from IARI and ICAR may provide some answers to traditional farming. Universities and Departments of Agriculture have to assume greater sense of responsibility and accountability. And everyone has to work in tandem, with cohesion and targeted achievement of measurable outputs. Of course, the high and mighty will say “but this is what we do”! There is immense scope here for public and private partnerships; for CSR initiatives and for building capacity for inclusive growth. Increasing non-farm income is also a viable alternative to the misery created by seasonality factors. Agri-business provides many solutions – cold chains, juices and purees, packaging, dairy farming – and farm to retail business models can help mitigate suffering of agriculturists who only depend on farm incomes. This is happening already, but the critical mass is yet to reach the bottom of the pyramid, and the slogan “Grow rich by serving the poor” is still a debate vibrating only in B-schools.

The Government says agriculture is a priority sector and that its GDP will contribute 4 percent growth in the years to come. This and next generation of farmers, educated lot will look to better farming opportunities to generate income. They will live in villages and may also own a flat in tier 2 towns or in the Metro. Land reforms must happen. Our farmers have a small 2 acre average land holding and large scale agricultural operations are thwarted due to fragmented holdings. Reverse migration in a positive sense is on the anvil, provided farming produces profits appropriate to the effort that goes into producing food for our teeming millions. As it is today, farmers are selling land to real estate bankers and making quick money. Social change must accompany economic prosperity. Can we take water, food and air for granted?

Anticipatory Management is a good science to explore as to what will happen in our country five to fifty years down the line. Economists and learned think tank will provide most trends and likely data that will emerge in the future, both good and bad. And technology of Big Data Analytics can be safely driven in this direction of imaging the future India. What is happening to the population, the demographic changes, the cultivable land, the erosion of environment, the social structures in the villages – 6,43,000 or so of them. How will we feed our people? What about their quality of life? What of bumpy roads, pollution, our castle ridden and corrupt society? What of the quality of infrastructure and the railways, roadways and smart cities? Where is our youth headed? Do they have a direction? What of the plight of our women? It’s all inter-linked. Anticipating for the long-term also means to dream! Albeit, in an organised and sensible way. And dreams sometimes can come true, blessed by the beckoning heaven raised eyes of our populace! Is someone listening? Is anybody alive out there?

By Prof CK Sabharwal, MD, Crop Health Products

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