Eating is an agricultural act - Wendell Berry

Sunday, April 24, 2016

ruin after the rain - part II

it was forecast to be a poor farming season early march.

looking at predictions vs actuals:
Pr: "it is only around 90 days since the rains stopped and already the well levels have dropped alarmingly. the lakes/tanks of the area will barely be able to cover one cropping season (till april end or so)."
Act: tanks dried up early april itself. wells were brought into service and those without that facility had to pay for it.

Pr: "paddy crop seems relatively less affected but due to oversupply offtake prices are likely to be depressed for paddy." as if this was not adequate misery, the farm lease rates and the daily agri labour rates had also gone up by 25-50%.

Act: last year paddy price was Rs 1000-925 (max-min) for 80 kgs. this year it was Rs 900-700. in fact as of today, there are no buyers even for rock bottom rates.
had last year's rates held, the farmer would have made Rs 5000/acre profit (best case - maybe 2% of the farmers) but at the prevailing off take prices now the average farmer would have  made a loss of Rs 5000/acre. a farmer who took a nearby 2.5 acre farm on lease took home a loss of 20k for his work from dec to march! makes us wonder why farmers bother to grow paddy at all.
a high level local trader was lamenting that his stock levels was not moving to the next stage (rice mills) and was likely to make serious losses!!

another statement: "in our 6 years, we have never seen pesticide sprays on groundnut crop (no. 1 cash crop of this area). already farmers (with cash) have resorted to 3 sprayings, and everyone at least 1. and this has barely had any effect."
Act: groundnut prices are better than last year. before you rejoice, the yields have dropped dramatically - by almost 50% on an average. and so is the case with pigeon pea, black gram and green gram. almost certainly entirely attributable to the pest attack.
so again the farmer gets rogered.

wait. some farmers did have it good this season. the watermelon growers. it was not just good, it was a bonanza for them. with scorching heat right from early march and no rain in the season, there was no shortage of demand. prices and yields were good throughout. average profits were almost Rs 1 lac/acre. more about this in another post.

net result: the season has been an unmitigated disaster. taking a crop holiday and earning as agri labour would have been the best option.


Magesh said...

If there is an oversupply of rice, then why are the retail prices still not coming down?

Is this an artifically created high price by hoarders?

csm said...

am not fully conversant with the dynamics of paddy post this first stage.
ideally, paddy has to be aged at least for 5 months before it is milled.
this current over-supply of paddy should not reflect as rice over-supply as of now.
but if the prices remain high - say in august/sept - then it is clear that the millers and then onwards are making a tremendous killing.

Capton said...

Hey Sriram, How are you? Sorry to hear about the bad season. Hopefully things will turn better next. Interesting that you mention you have never seen pesticide used on groundnut until this season. What is the reason for such increase in pest suddenly? Change in weather patterns? Did rain had anything to do? Is this a sign of things to come?

Magesh said...

Few more questions.
once the paddy grows, the only ones who buy from farmers are millers is it? How does govt come into picture?

I see news about government procuring paddy. Does Govt buy and sell it to millers themselves, or does govt acts as an agency for millers?

Sorry for asking too many questions.

csm said...

we are guessing that the high rain in nov-dec had a role to play in the pest increase.
also locals say that, july-aug (aadi) rains should be with heavy thunder (i.e., thundershowers) which (i.e., the sound) hampers the breeding of the pests.
the cause-effect system, which most of us are so used to in our urban/corporate lives, cannot be easily understood/explained when it comes to natural processes. so i am at best guessing.
water shortage, unseasonal weather, extreme weather, decreasing tree/forest cover, species loss, decreasing diversity and suchlike are now realities. these are affecting all natural processes at rates which should be considered alarming. so yes, it is a trailer of things to come.

govt does buy at better prices, but the system (as most systems go) is pretty corrupt and only the influential farmers are able to take advantage of the govt's min support price (MSP).
note: - millers rarely buy direct from farmers. there is one agent in between.
infact, a few influential agents buy at low prices from the farmers and sell to govt at MSP, thereby making it an arbitrage play.
govt purchases are most likely for PDS supplies/amma unavagams/balwadi and school mid-day meals.