On Multiple Fields

The winner in the dry belt in Maharashtra is sugarcane and Pawar saheb is god. The rain meant high yield and assured water supply. The Minister declared a minimum price and that has done the trick. The farmers in villages still complain but there is a satisfied smile

This is the conference season and economists are much in demand. I am also an “agriculture type” and so have been addressing central bankers in Bali and development bankers in Bangkok besides trips to Bhuj, Ahmednagar and north Gujarat. The effect of plentiful water in dry regions fascinates me, being born in a dry area in north Pakistan and now living in a dry region in western India. The outcomes to a large extent, I am by now reasonably certain, do not depend on God and rainfall, but on man and his institutions.

In an earlier column, we saw how a lot of rain in the kharif had a sweet and sour effect in Ahmednagar. Some crops were doing reasonably well and others like grapes and onions, badly. By December, in the dry regions of western India in Gujarat and Maharashtra, the Rabi outcomes are almost in. These are regions where harvests come in early in March. The winner in the dry belt in Maharashtra is sugarcane and Pawar saheb is god. The rain meant high yield and assured water supply in periods of stress. The Union Agriculture Minister declared a minimum price and that has done the trick. The farmers in villages still complain but there is a satisfied smile. Their man in Delhi has done his bit. This is going to be a long and happy crushing season. There will be plenty of cane. Some of the poorer karkhanas will also recover. Some day, we will worry about who will buy all the sugar but who am I to complain, especially when at least some of my friends are happy?

Another winner in this season, strangely, is wheat. The retained moisture was perfect, there is water expected from the canals and tubewells and the price is good. At least, the kisans I met believe that some of us have made the appropriate noise and the government won’t stifle them with too much of import. But let me warn the powers that be. If the price at the farmgate falls below Rs 7 a kilo, there will be violence. The minimum support price and government purchases of rice and wheat are thoroughly irrelevant in Maharashtra and Gujarat and here, there is reasonable certainty that the market price of grains is good. They hope to do well.

Story continues below this ad

This dairying territory and milk price is not too good. Also, as we saw in the October column, grapes and onions did not do too well. It breaks my heart to say this but my pet peeve on diversification is still there. Some day, the region will get institutions that will push for crops it is really strong in – high-value dryland crops. Of course, some movement is there. A lot of the amla, sitafal and ber comes from there. But in recent years, more is not happening. Until then, we are happy with a good rainfall year and a decent price of sugar and wheat.

Now to north Gujarat and Kutch. Travelling through is a dream sequence. In every village, you see many crops. Incidentally, wheat is there even here and I suspect the Government will buy enough of grain in Punjab, Haryana and UP, because the other regions have a good rainfall year crop and prices will not rise. The separate effect of rainfall, better ground water availability and in some areas, Sardar Sarovar water, is still not clear but the region is undergoing a major transformation. This is because of its strong market institutions.

If you hit the six-lane National Expressway at Anand and go towards the town, you see a cluster of very modern and well-off papad processing centres. Rice milling, grading and packaging, building in superior technology in “small activities” and working on markets at home and abroad makes the difference. Let us pray for a million small revolutions.