How rice is caught between a deluge and a deficit

Paramjeet Singh, a farmer from Karnal, Haryana, checks the depth of sand deposited in a paddy field following floods (Sayantan Bera/ Mint)
Paramjeet Singh, a farmer from Karnal, Haryana, checks the depth of sand deposited in a paddy field following floods (Sayantan Bera/ Mint)

Summary

Climate uncertainty can roil both paddy farmers and rice consumers, placing governments in a tight spot

KARNAL/AMBALA/NEW DELHI : You were so thirsty that you came here to get drowned. We warned you, but you did not listen," quipped the residents of Nabiabad. The pun was directed at Tejraj Singh, a farmer in his mid-50s, who relocated to Nabiabad in 2019. Singh chose the tiny village, close to river Yamuna in Haryana’s Karnal, for a reason. The land was extremely fertile and water was in abundance. His former village in Sonipat district, some 80 kms away, was parched in comparison.

Singh took the joke in his stride and laughed aloud. Then, he said: “It’s okay. It won’t flood like this every year." Others seemed to agree. There is no option but to agree. Faced with a devastating flood which ruined a crop and is now threatening to swallow parts of the village, the residents of Nabiabad can only hope for better days ahead.

Earlier this July, a swelling Yamuna, bringing excess rain water from the hills upstream, flooded the village and neighbouring areas. The embankment was breached in multiple locations, the worst since 1978. The flood waters flowed several feet above the road connecting Nabiabad to the outside world. And when the waters receded, it left behind a trail of devastation—washing away month-old rice saplings and depositing a thick layer of sand and silt on farmlands.

“We do not have time left to clear the land to replant paddy," lamented Paramjeet Singh, another farmer from the village. The loss to farmers? 10,000 spent on saplings, nutrients, and labour for each acre of paddy planted. Plus, around 15,000 to clear the sand and silt to make the land cultivable for the next crop of wheat, planting for which begin end-October.

Those who farm on leased land have to bear an additional 30,000 per acre for half a year’s rent. Also, a foregone harvest of paddy means a revenue loss of more than 60,000 per acre, calculated at government announced support prices.

“We have no choice but to bear this loss. Sadly, no one alerted us (when water levels started rising on the evening of 9 July), even a few hours before the floods," residents of Nabiabad complained. Next to where they stood, a dozen or so workers employed by the local administration placed sandbags at a wide incursion made by the swelling river.

About two hours away from Nabiabad, in Haryana’s Ambala district, bordering the state of Punjab, Tejveer Singh was busy distributing flood relief materials to low-income families dependent on day jobs on the farm. Tejveer, who is also the spokesperson of a local farmer organization—Bhartiya Kisan Union (Shahid Bhagat Singh)—complained that the 15,000 compensation (per acre) announced by the state government is insufficient.

He showed scores of submersible irrigation pumps which went under the water and now needs to replaced. Each cost over 5 lakh. The flooding here was primarily caused by an overflowing Ghaggar river which originates in the hills of Himachal Pradesh. The river is dry for most part of the year, except during the June to September monsoon. “This time, it went wild. After the water receded, some farmers replanted paddy. But it was washed out again," Singh said.

In the hinterlands of Ambala, expansive paddy fields resembled giant shallow lakes, interspersed with piles of sand peeking out like small islands—a grim reminder of repeated climate shocks. For farmers in these adjoining regions of Haryana and Punjab, the ongoing Kharif crop season marks the third time in the past four seasons when freak weather impacted crops.

The wheat crop in 2022 was damaged due to a record heat wave ahead of harvest; the wheat harvest in May this year was impacted by unseasonal rains which led to grains losing their shine; the rice crop planted in June is now bearing the brunt of a rain deluge in north India.

Genesis of a ban

For India, climate risks are steadily eating away its fragile food surpluses, pushing the nation of 1.4 billion to take desperate steps to keep food inflation in check, ahead of the general elections scheduled next year.

The floods in Punjab and Haryana—the erstwhile cradle of green revolution—are estimated to have impacted rice cultivation in about 400,000 hectares, a miniscule area compared to 40 million hectares of paddy planted across India during the monsoon season. While northern states have seen excess rains this year, the rice growing belts in eastern India are battling a rain deficit. Last year, too, the monsoon paddy crop was impacted due to less rains in eastern India. Coupled with soaring exports, this resulted in a protracted period of high cereal prices. As on 30 July, average retail rice prices were 13% higher year-on-year.

Last September, India banned exports of broken rice and imposed a 20% duty on exports of raw rice. Yet, total rice exports during 2022-23 surged to a record 22 million tonnes—valued at 89,612 crore. So, on 20 July, India banned exports of non-basmati raw rice to keep domestic cereal prices in check. Together, these two categories (broken and raw rice) account for about 9-10 million tonnes (mt) of rice exports—or a fifth of the global trade in rice.

“The export ban on raw rice is leading to more shipments of basmati rice—importers want their delivery earlier than scheduled. There is some fear that India may impose restrictions on basmati as well. But that’s unlikely," said Atul Garg, managing director at GRM Overseas, a leading exporter of basmati rice.

“The ban is a positive for basmati exports as overseas customers of other premium Indian varieties may shift to basmati. Also, there may be some conversion of raw rice to parboiled rice since the latter category is exempted from the export ban," Garg added.

The export ban led to chaotic scenes in supermarkets abroad as expat Indians rushed to stock up on rice. International rice prices surged by 5% within a week of India announcing the export ban. The year-on-year increase in international rice prices was a staggering 33% (as on 27 July), shows data from the International Grains Council.

Many middle and low-income countries in Africa depend on cheap rice imported from India. No wonder, the chief economic advisor to the International Monetary Fund requested India to reverse the ban, fearing it may have a similar impact on global grain prices, like the suspension of the Black Sea grain export deal by Russia. What the Russia-Ukraine war did to wheat, climate uncertainties seem to have done to rice. But India is not the only country which appears to be hit.

As the developed world battles record high temperatures, developing El Nino conditions in the tropical Pacific Ocean has stoked fears of a drought in South East Asia. In Thailand, the second largest rice exporter after India, the government has asked farmers to plant just one crop to conserve water. As demand from importing countries like Philippines and Indonesia surged, prices of the premium Thai rice rose to $580 per tonne in end July, a steep 45% increase year-on-year.

Upending trade

India’s export ban on cheaper non-basmati rice varieties is targeted to put an end to rerouting of grains supplied under the public distribution system (PDS) for exports, industry insiders told Mint. According to them, a portion of the grains supplied under the National Food Security Act—which provides 5kg of free food grains to over 800 million individuals every month—were siphoned off for exports.

The situation had come to such a pass that Indian rice was cheaper internationally than within India. Average export price of non-basmati rice was just 29 per kg (in 2022-23), while domestic average retail prices hovered between 35 and 40 per kg.

The department of food and public distribution did not respond to queries emailed by Mint.

“The government took the right step by banning exports of cheap raw rice to plug the leakage from PDS. But due to an umbrella classification, export of other premium rice varieties (non-basmati) has stopped as a result," said a Delhi-based rice exporter who did not want to be named.

These premium non-basmati rice varieties include Sona masuri, Ponni and Gobind bhog, among others, which has a limited but steady market among the expat Indian population in the Middle East and the US. That explains the dramatic scenes at supermarkets abroad.

“While India has banned export of raw rice, it is allowing export of un-milled paddy to Nepal. This has impacted domestic millers. In Uttar Pradesh (UP), nearly 250 rice processing units which were supplying premium Sona masuri rice to the Middle East are in deep trouble. Why should India ban export of a premium variety of rice and allow the raw material (paddy) to be exported to another country?" asked Suresh Gupta, president of the UP Rice Exporters Federation.

Sona masuri, an accidental casualty of the latest export curb, is currently trading in Dubai and Singapore for as high as $1,000 per tonne, said S. Chandrasekaran, an agriculture trade policy analyst.

“It makes little sense to have a preferential treatment for only basmati which is grown primarily in northern India. Basmati has enjoyed the privilege for three decades, at the cost of other premium varieties including ones with a GI (geographical indication) tag. This discrimination of farmers from southern and eastern India has to end," Chandrasekaran added.

Rain troubles

The four-month long south-west monsoon which accounts for 75% of India’s annual rainfall arrived late in June. With a developing El Nino condition, it was widely anticipated to be below normal. The India Meteorological Department (IMD) expected rains to be at 96% of the long period or 50-year average (LPA)—with a model error of (+/-)4%. Monsoon is taken to be normal when aggregate rains are between 90-110% of LPA. After a slow start in June, which recorded a countrywide deficit of 10%, the deluge in July pushed India into a surplus of 6% so far (till 30 July).

The 6% number, however hides the skewed rainfall pattern so far, both over time and across geographies. Several states in north India have witnessed excess rains and floods—including Himachal Pradesh (60% excess rains), Uttarakhand (21%), Rajasthan (80%), Haryana (60%), Punjab (41%) and Gujarat (79%). But in eastern India, predominantly a rice growing region, the rainfall deficit ranges from -35% in eastern Uttar Pradesh, -48% in Bihar, -46% in Jharkhand, and -40% in Gangetic (southern) West Bengal.

The uneven rains are a direct consequence of global warming, scientists say. “Monsoon patterns have changed in response to global warming. Instead of rains spread moderately through the season, we are now witnessing long dry and deficit periods interspersed with heavy rainfall events that cause floods. This is a clear climate change signal," said Roxy Mathew Koll, scientist at Indian Institute of Tropical Meteorology, Pune.

Since warmer air holds more moisture and for a longer time, it does not rain for long periods. But when it rains, all that moisture gets dumped in a few hours to few days. This is what seems to have happened in July.

Flash floods due to cloudbursts and extreme rains over mountainous regions (which were responsible for the deluge in parts of north India) are difficult to predict, Koll added. “We should monitor these events closely and identify areas prone to flashfloods. We will have to depend on radars in such hazardous environments to monitor and forecast these events. With a radar, the maximum lead time that we could get is about three hours before such an event," Koll said.

“We are walking blind into a crisis, overlooking the toll that forest degradation and large infrastructure projects— hydropower, highways, and hotels—are taking on the fragile Himalayan region. We are not assessing the carrying capacity of rivers, which is why floods are taking us by surprise. IMD’s weather forecasts are not actionable and we need better predictions on hydrological lines (like how much water a river might be carrying into downstream areas following heavy rains)," said Himanshu Thakkar, coordinator at the South Asia Network on Dams, Rivers and People, a research and advocacy group.

“When it comes to predicting climate shocks, the past is no longer going to be a guide to the future," Thakkar warned.

That uncertainty can roil both farmers and consumers, placing governments in a tight spot. And the centre of discussion can shift quickly: from wheat, to tomatoes to rice.

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