With three consecutive crop failures in the backdrop, the persistence of the ongoing unseasonal rains would intensify the rural distress triggering farmer suicides in the most prosperous agricultural regions of the country. Although the full impact of the unseasonal rain is yet to be ascertained, in regions of Punjab, Haryana and Western UP, the damage could be about 50%. “The likelihood of the fourth consecutive crop getting impacted would simply push the already indebted farmers to extremes,” says Chengal Reddy, the chief advisor with the Consortium of Indian Farmers Associations. More rain is predicted in the days to come and therefore, the situation demands pro-activeness on the government’s part as otherwise “there is bound to be a huge number of farmer suicides, particularly in UP and Punjab,” adds Reddy. The unexpected rains last year pushed farmers of this region to end their lives.
If the damage becomes too much then “obviously it would require some sort of fiscal support for the farming community,” says Sunil Sinha, principal economist with India Ratings & Research. Reddy agrees that these unseasonal rains have provided a silver lining to Prime Minister Narendra Modi to show his concern for the farming community. This would help the BJP, says Reddy, win crucial elections in various states. He expects the government to constitute a task force and get the losses assessed within three weeks and “transfer the losses to the concerned farmers through Aadhar cards,” says Reddy.
More rain is predicted in the days to come and therefore, the situation demands pro-activeness on the government’s part as otherwise ‘there is bound to be a huge number of farmer suicides, particularly in UP and Punjab.’
While financial support can provide immediate relief to farmers but in the longer run “we have to accept the fact that climate change is inevitable,” says Sinha and “therefore, a new strategy to cope up with it is required.” The crops that have a good resistance to such vagaries of nature need to be developed, a phenomenon already happening in Israel and the US. Countries elsewhere are doing genetic manipulation to suit climatic conditions there. This needs immediate attention because if the crop damage is widespread, then (crop) insurance companies would also become helpless. Their business model might become unviable thus forcing the government eventually to bail-out farmers.
Agricultural production getting impacted every year is going to impact the nation’s monetary policy as well. Though retail inflation (as per the latest data) is well within the comfort zone of the RBI but recurrent crop failure might take inflation to a higher level forcing the RBI to maintain its tight interest rate policy. Many feel that the manufacturing revolution, which PM Narendra Modi wants to trigger in the country, requires cheaper capital especially for micro, small and medium enterprises that have a lot of potential to create employment in the country.