NITI Aayog’s agri expert sees poor rains keeping food inflation high this year
In a comprehensive interview with CNBC-TV18, renowned agricultural economist and member of Niti Aayog, Ramesh Chand, highlighted that the delayed disruption of the monsoon will have a more significant effect on the kharif crop.
The 34 percent deficiency in August rains will hurt kharif crops, like soybeans and pulses, Niti Aayog member and famed agri economist Ramesh Chand told CNBCTV18. Prof Chand expects the rabi harvest to be unhurt but added that food prices, especially of rice, sugar and pulses can remain high during FY24
The current monsoon season has experienced an 11 percent deficiency, and reservoir levels are trailing behind the 10-year average by 9 percent, as reported by the Central Water Commission. Particularly dire conditions are seen in South India, where water level deficiency in reservoirs is a staggering 52 percent. While food stocks are considered satisfactory, they have reached multi-year lows, falling approximately 25 percent below the last 5-year average.
In a comprehensive interview with CNBC-TV18, Prof Chand, said that the later the monsoon is disrupted the greater the impact on kharif output. While the impact has been mitigated lately in India due to the increase in irrigated lands, soybeans and pulses are still likely to be hit.
“In the case of pulses, the government has seized the problem and preparation started a few weeks before,” he said. “We were having surplus production (of chickpeas) last year, but since pulses become a substitute for one another at some stage. Therefore, despite good production of chickpea last year, even chickpea prices have also started rising.”
While talking about wheat, Chand pointed out that international wheat prices were on a downward trajectory can have a benign impact on domestic prices, but for rice and sugar, the situation is the opposite, with global prices being high for both, he said.
Chand highlighted that the expansion of irrigated areas would play a vital role in ensuring a robust rabi harvest, thereby bolstering overall food production.
Encouragingly, Chand doesn’t expect rural demand to be hit by the likely lower kharif output. “Within rural areas, the share of non-agriculture is rising much faster than agriculture. If I tell you one statistic, today, more than half of industrial output is generated in rural areas, and less than half percentage is generated in urban areas. So, the rural economy is no longer only agriculture kind of thing,” he explained.
A key takeaway from the interview is his expectation that food prices are likely to remain high through the current financial year.
For the entire interview, watch the accompanying video
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