The reported threat of drought in Gujarat, large parts of Maharashtra and North Karnataka coupled with a sharp rise in farm input costs is a warning that the government needs to act now. Production could be hit. Food price inflation, benign till now, could go up. Besides the likely adverse impact on sowings in rabi crops such as onion, jowar, chana and wheat, there are also reports of pest and disease attack on sugarcane in Maharashtra. A spike in the price of onions, ahead of the national elections, is not a desirable eventuality.

The good news is the advance notice the government has, apart from drought being localised. Onion farmers elsewhere can be incentivised to step up output. Pakistan would be happy to get some additional export earnings. With cereal stocks in excess of the normal needs, checking cereal prices is feasible. In other agricultural crops, the need is to manage storage and distribution, apart from to increase output. Distribution infrastructure like the railways and truck services needs to be properly mobilised. The need is also to plan for optimal utilisation of the water resources in the country.

The government should raise capital investment in agriculture, ensure reliable power supply in rural areas to run food processing plants and build motorable rural roads to swiftly transport produce, especially perishables. In sugarcane, water-scarce areas have too much mill capacity, rather than more agro climatically-suited Indo-Gangetic plains such as those in Bihar. Moreover, unrealistic prices kill economic viability, leading to alternate periods of glut and shortage and mounting cane arrears. The way ahead is to create farmer-owned producer companies like Amul to make production efficient instead of subsidy and patronage. Let the market work in sugar as well.