Our lives are so fragile and vulnerable dependent on the monsoon winds. A deflection of even four degrees in the travel of these winds in any year can make for the draught in several States. To this day, with all the economic and technological advancements, the irony is that farmers continue to look up to the sky and pray for the winds and the rains on time; urban cities in their search for solutions for water and power shortages, are so completely dependent on the monsoon for life and living. If the farmer cannot grow food without the winds and the rains, the urban dweller does not get power at home and food at the Mall, without the rich water catchments that either generate hydel power or increase the inflow of greens and cereals into the market.
The rainfall pattern has held for many years on the same. So on what does this pattern depend upon? The Indian sub continent is the only region in the entire world which is dependent on winds that flow 24/7 from across the seas to the land and back again to the Arabian Sea and Bay of Bengal and the vast Indian Ocean that lies beneath. These northwest and southwest monsoon are as old as Time, and travel at a speed of 12/18 Kms an hour. These winds might have taken the present directions after the formation of Himalayas which must be just over 15-20 million years ago; this is nothing compared to the fact that the creation of earth goes back to over 4,000 million years.
Malabar Coast became a leading trading hub and a vibrant passage of cross cultural mergers and dialogues because the sea lanes beyond the borders led the ancients to this place because of the wind movement. Monsoon lands in Kerala in India at the first instance. The guts of wind that herald rain bends and break the Coconut trees, which are very weak or too stiff and upright, but the more flexible ones bend and extend their palm leaves to break the downpour and so many tiny waterfalls hang out from their branches.
Like the self sufficiency in food while mass hunger continues in many parts, it is another great contradiction of India that there is too much water in some areas while draught prevail in others. Distribution is the key word in both cases. Meanwhile, traditional and local water management practices, which sustain the most deprived in remote areas are ignored and damaged by modern development.
The full moon day in the thick of monsoon, is a day villagers come in herds to worship the water itself; the life sustaining element created by the harmonies of nature.
Monsoon if bountiful will push our agricultural output; if deficit, it will hit the food economy. Rainfall in 2009 was lowest since 1972, yet that fiscal accounted for a diminishing 0.2% in output. If monsoon comes, India’s agriculture will regain resilience. Output of Khariff food grains fell by 15% and oil seeds by 5%. Government released the figures that the agricultural growth accounted for 0.2% in agricultural GDP. Are the estimates correct? The Economists, who are policy advisors, have to anticipate problems and suggest solutions before problems turn to crisis. And not justify the crisis as a fall-out of international reasons. Devaluation of the Dollar has been a frenzied monster, and to offset that, the Rupee: Dollar parity should have been narrowed down, which if done, would have angered the business crowd.
Our Agricultural policy is ridiculous. Planning Commission and MoA, and the economic advisors of the PM/Finance Ministry have been fooling people. Inflation is directly related to hoarding of food grains. The solution lies in bringing down stocks to appropriate levels, and inventory should relate to food grains required for PDS. Government has no business to buy food grains more than what is required for PDS and that too at the prevalent market rates. Government policy appears to be: give farmers highest prices and give the grains at throw away prices. Traders do not keep any inventories of food grains, and what they did was paid the farmers and allowed the goods to be kept with them, and took them and sold them at savaging prices during mid inflation in food. The price raise has been caused by a plethora of problems, the government needs to accept them and the opposition need to understand them and then evolve effective policies to solve it. Instead, destructive arguments for all the wrong reasons see Parliament adjourned again and again.
Government’s only solution appears to be imports of food grains and essential oils. And to curb inflation, its only solution is minimizing Customs duties. It has also banned import of edible oils by canalizing imports and has prohibited all sorts of exports of essential edible oils. With free import of oils from abroad at nil customs duties, the market is invaded nakedly by the imported oils that it sounds death knell for indigenous edible oils. But our agricultural ministry behaves like King Canute, who asked the waves to roll back. Is the Government not acting like King Caunte by asking the monsoons to come? The economists have no other option or armory. Our agricultural minister thinks that agriculture prices are like a 20:20 match. The more the price goes up, the more will be supply. But unfortunately, the Opposite happens!
In the context of Growth Vs Inflation, it is intellectually and methodologically flawed. Economic strategy must reflect high yield, high growth with modest inflation and high employment. When prices were falling globally, Govt adopted an aggressive food procurement programme. When there were enough stocks, the right approach should have been to release that and allow market forces to act. This would have allowed demand and supply equation, and the prices would have been in sync with global prices. Government also did not undertake any global market operations. Food issue was dealt with too many ministries- Finance, Cabinet Committee on prices, NAC, PDS was not good. There is also a need to know behaviour trends like cropping pattern, emerging trends in growth in different crops, weather trends. Food prices are high, Foreign exchange reserves is not a problem, monsoon is good, food supplies are ample available. How to do, what needs to be done and that too, very fast.
We need to restructure the PDS model, as PDS has not been able to perform for the last 60 years.
In a general equilibrium model, you need to operate in both. Demand side is a larger issue, whereas spillover of food inflation into a more of generalized inflation is a core issue. If you have a strategy that is led by consumption instead of investment, then the demand side management is an issue. On the supply side, we need to take care of wastage. More than 45% of the food and vegetables are wasted.
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