Government should set up Rs 5,000 crore fund for drought-hit farmers
New Delhi: The Centre should create a Rs 5,000 crore fund to protect farmers' incomes in the event of a drought, according to a study by economic think-tank ICRIER. Offloading food grains from Food Corporation of India godowns and cutting import duty on fruits, vegetables, dairy and poultry items were also recommended in the ICRIER paper titled 'El Niño and Indian Droughts - A Scoping Exercise' by consultant Shweta Saini and farm economist Ashok Gulati.
"For 2014, going by the forecasts of IMD and Skymet so far, it appears that El Niño may hit Indian monsoons in the second half of monsoon period. But will it cause a drought is still not certain," the Indian Council for Research on International Economic Relations (ICRIER) study said. Noting that it is "very crucial" to monitor the impact of the El Niño, the study said policy makers should be "alert" and even pro-actively prepare for a drought-like situation, especially for western and central India.
To minimise the impact of possible drought, the study suggested that "in the short run, there is a need to create a dedicated fund of say, Rs 5,000 crore, towards insurance/income stabilisation of farmers likely to be hit by drought in certain pockets." To protect consumers from a price rise due to a drought, "the government should stand ready to liquidate its excessive grain stocks with FCI, cut down import tariffs on fruits and vegetables, skimmed milk powder, and chicken legs to augment their supplies through enhanced imports."
Among long-term measures, the study stressed the need to raise investment in agriculture, post-harvesting and food processing facilities, while rationalising food and fertiliser subsidies. The study suggested reorienting the Mahatma Gandhi National Rural Employment Guarantee Act towards recharging ground water, rejuvenating forests and improving farm practises. Two weather agencies have predicted a sub-normal monsoon, but not a drought yet.
The India Meteorological Department has pegged this year's monsoon at 93 per cent of the long-term average, while Skymet has forecast it at 94 per cent. In India, the El Niño, which is associated with rising temperatures in the Pacific Ocean, is feared to lead to droughts. In the past 14 years, out of four El Niño years globally, three resulted in Indian droughts, according to the ICRIER paper. Since 1950, India faced 13 droughts, and 10 of these were in El Niño years, the study said. The monsoon is crucial for agriculture as 60 per cent of the country's cultivable land is fed by rain.
