Why in the News
Fertiliser sales, including urea, the cheapest and most widely used, fell in April-September from a year earlier, even as production and imports rose. The drop reflects weak farmer demand under El Niño induced dry weather, which now threatens the rabi crop and is already pushing up food prices.
Why did fertiliser sales fall when supply rose?
- Monsoon deficit: All India rainfall was 12.6% below normal in the June-September southwest monsoon. Eg. Shortfalls in the South, Marathwada, Vidarbha, Saurashtra, Kutch, Rajasthan, Bihar and the Northeast.
- Low fertiliser use: Rains were not adequate for farmers to buy fertilisers and apply them on their crops, so sales of plant nutrients stayed low.
- Kharif yields: The area sown with kharif (monsoon season) crops may not have fallen much. Using less fertiliser could still lower crop yields.
- The takeaway: Fertiliser sales reveal damage from the dry spell that sown area figures hide.
Why is the rabi season also at risk?
- October deficit: October recorded a 31.4% rainfall deficit, pointing to an intensifying El Niño.
- Persistence: Global weather agencies project the strong to very strong event to last through January-March, turning moderate to weak towards April-May 2027.
- Soil moisture: Subpar rain leaves less soil moisture for rabi (winter-spring) crops, and their sowing has just begun.
- Warm winter: El Niño also tends to bring warmer than usual winters in India, so both rabi acreage and yields could take a hit.
How does the dry spell feed food inflation?
- Rising food prices: Consumer food inflation climbed from 4.2% to over 7.7% year on year between April and September.
- Repeat pattern: India’s last major food inflation episode averaged above 8.5% and ran until December 2024. It too was driven by a long and strong El Niño, and this time the event is “super strong”.
- Production shortfalls: Weaker kharif and rabi harvests make domestic shortages of some commodities inevitable, so imports will have to fill the gap.
Challenges
- Short duty windows: Brief duty cuts give importers little confidence to contract the sizeable quantities needed to cover domestic shortages.
- Climate seen as a passing risk: Policy still treats climate change and geopolitical tension as temporary “risks”, not as baseline “default” realities.
- Political cost of subsidy reform: Reworking the inefficient subsidy system and the government’s spending priorities is hard mainly for political reasons, not economic ones.
Way Forward
- Duty free imports: Permit duty free imports of pulses (masoor, chana and yellow peas), raw sugar and cotton till March 31.
- Edible oil duty: Scrap the basic customs duty on crude palm oil and crude soyabean oil.
- Climate smart breeding: Invest more in climate smart crop breeding, so that varieties can cope with dry and warm seasons.
- Efficient input use: Make farmers more efficient users of water, fertilisers and energy.
Conclusion
A dip in fertiliser sales has become an early warning for both harvests and food prices in an El Niño year. The unresolved question is whether policy keeps treating such years as exceptions or starts planning for them as the norm.
Back2Basics: El Niño
- What it is: El Niño is an unusual warming of the sea surface in the central and eastern equatorial Pacific Ocean, the warm phase of the El Niño Southern Oscillation (ENSO).
- Effect on India: It weakens the monsoon winds and tends to cut southwest monsoon rainfall, which raises the risk of drought.
- Current event: The World Meteorological Organization (WMO) has called the current El Niño “firmly established and strengthening rapidly”, possibly among the strongest events since at least 1950.
- Opposite phase: La Niña, the cool phase of the same cycle, tends to bring stronger monsoon rain to India.
Matching Previous Year Question
“[2024, GS3, 10 marks] What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation.”
