The Telegraph
Since 1st March, 1999
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Deep divide on drought impact
- Govt, industry lock horns on effect of poor farm incomes

New Delhi, Sept. 13: Will late rains still leave them parched' Or will it soak up their miseries' That question’s thrown the government and industry on two sides of a scale to measure the impact of a dry spell.

There are no easy answers, but the outcome will decide just how much industries like fertiliser and chemicals, sugar and farm machinery could wilt in adversity.

Agriculture minister Ajit Singh, who presided over a brainstorming on drought management today, said late rains would help the Rabi crop — those sown in autumn — and food output would not suffer significantly.

Singh left a few loose ends in his argument, though: Late rains could bite into farm incomes. That means few farmers would have the money to buy quotidian stuff like fertiliser, pesticide, pharmaceutical, herbal and cosmetic products and even consumer goods.

In a Ficci study on the impact of erratic monsoon on industry, 35 per cent of those polled felt the impact would be “very serious” while another 51 per cent saw it as “moderate”; 55 per cent said raw material supplies would be hit.

Approximately 60 per cent was of the opinion that progress and pattern of the south-west monsoon will have a negative impact on their sales in the coming months. On the other hand, a whopping 62 per cent of respondents said they were not “rescheduling production plans” — which is quite a contradiction in itself.

Sectors like food processing, sugar, textiles, fertilisers and chemicals, agro-products and tractors are among the ones that will be worst hit, the Ficci survey said.

Those asked to give their opinion included big corporate names like Indo Rama Synthetics, Ginni Filaments, Zuari Industries, SPIC, Agro Tech Foods, Mafatlal Industries, Kinetic Engineering and a few more.

An analysis of sectors directly affected reveals that 33 per cent of textile and sugar firms, 50 per cent of food-processing units, 14 per cent of cement makers and 45 per cent of chemicals and fertiliser companies perceive the overall impact of monsoons to be “very serious”.

Almost 86 per cent of respondents from the cement sector and 89 per cent from fertilisers and chemicals strongly feel erratic monsoons will have an adverse impact on sales. Close to 56 per cent of textiles and food-processing firms have voiced the same apprehension.

Among cement units, over 55 per cent sees a slump in sales in the coming months, though 45 per cent among them are confident the decline will not be over 10 per cent. This, perhaps, explains why 78 per cent respondents are not rescheduling their production plans.

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