This was something that I was dreading all these days. Even while the media was trying to extract from me the panic button on agriculture, I had refrained myself from making any sensational statement knowing that a revival of the monsoon even after three weeks can bring back some smile on the face of farmers. I had repeatedly said that we need to wait for another week (this I said on June 20/21) before we press the panic button.
Monsoon delay certainly washes the hopes of the farming community. The more the delay the more is the tension on the face of farmers. The Indian Meteorological Department (IMD) has now made it official. The rains would be deficient this year. But what has not been spelled out is the distribution pattern of rainfall. Often the averages looks comfortable, but in some areas it rains very high, and some other regions go completely dry.
I was talking to the Director General of IMD yesterday (we were both on a panel on DD News Channel) and what he told me was encouraging. He said that his department will now be preparing weekly forecasts for not only different regions, but district-wise. I thought this was very important, given that the farmers actually needs to know how will the weather be faring after he has done the sowing. If this information is available, it can certainly help farmers plan accordingly.
I don't know how much of contingency planning that the government is talking about would be really helpful. Since 1987, the year India faced one of its worst droughts, I have seen that these contingency plans mean nothing more than bureaucratic justification for not doing anything. For instance, they are now talking of making drought-resistant varieties available to farmers. Well, if they really had these varieties and spread them earlier, I see no reason why the crisis would have been of such a magnitude now.
Actually, much of the drought-like scenario that stares at us is our own creation. Extended dry spells have been a usual weather phenomenon, but what compounds the crisis is the way we have 'managed' agriculture and farming in the rainfed areas of the country. Common sense tells us that we should be growing crops in drylands that require less water. But for nearly three decades now we grow crops in drylands that actually consume 1.5 to 2 times more water than the improved varieties that we cultivate in the assured irrigation region of Punjab and Haryana. I am talking of the hybrid crops, whether it is hybrid rice, hybrid sorghum, hybrid cotton, hybrid maize, hybrid vegetables -- all kinds of hybrids are grown in the rainfed regions. Every year, dryland farmers are therefore pumping out more water from the ground reserves, and also digging deeper thereby adding to their costs.
In our blind and misplaced quest for GDP, we have forgotton millions of farmers who toil endlessly on parched lands. I find that agriculture has disappeared from the radar screens of economic planning, and also from the small screen of the electronic media. In fact, I feel so angry when reporters ask me what would be the impact of the monsoon delay on the stock markets. What a stupid question to ask. This is the level of ignorance that prevails in the media, and this is also a clear indicator of why and how agriculture has been neglected in India. We will talk more about these issues in the coming days, but meanwhile the news report below would give you an overall picture of the grim situation that prevails ahead.
If you read it carefully, you will see that the speculators have already swung into action. Future stocks are already up, and I strongly recommend banning of futures trading if we really want to minimise the impact of the delayed monsoons.
Its official now: monsoon will be less than normal
Hindustan Times, New Delhi, June 24, 2009:
Monsoon rains will be below normal this year, the government said on Wednesday, in a setback to the Indian economy’s recovery from a global slowdown.
Poor rains could lower agricultural output, push up food prices and dent rural demand that was once a silver lining for India in the face of the global economic downturn.
It could also affect the government’s ambitious plans to provide cheaper rice and wheat to the 250 million people living below the official poverty line.
“Rainfall is likely to be below normal,” earth sciences minister Prithviraj Chavan told reporters.
Monsoon rainfall, which spans from June through September, will be 93 per cent of the normal or the historical average of 89 centimetres of rain. A deviation of more than 4 per cent from this level is considered below normal.
What is worrisome is that the India Meteorological Department (IMD) predicted the northwest region to get only 81 per cent of normal rainfall this season.
The northwest includes granary states of Punjab, Haryana and Uttar Pradesh.
The delay and deficiency in monsoon would put pressure on food prices, said Shankar Acharya, a former chief economic adviser in the finance ministry.
“What the exact impact would be depends on how much delay there is and finally how much rain we get,” Acharya said. “But we are lucky to have enough food stocks and if that is managed well, the pressure could ease.”
The news pushed up futures prices of soybean, soyoil, wheat, chana, guar, turmeric, jeera and pepper in Wednesday’s trading on the National Commodity and Derivatives Exchange.
At Azadpur, Asia’s biggest vegetable wholesale market in Delhi, prices of vegetables such as cauliflower, peas, ladyfinger and bottle-gourd have already gone up by about 50 per cent.
Traders estimate that this year supply is down by 25 per cent compared with 2008.
“If you see a poor monsoon heading for a 10 per cent deficiency, you might see a one percentage drop in GDP,” said Mridul Saggar, chief economist at Kotak Securities. “I don’t see a very perceptible drop. You could see a few points coming off.”
Agriculture accounts for a fifth of India’s gross domestic product and provides livelihood to nearly 60 per cent of the 1.1 billion-plus population.
The monsoon is crucial for kharif crops such as rice, soybean, sugarcane and cotton as nearly 60 per cent of the net sown area in the country has no access to irrigation and depends on rains.
Wednesday’s revised forecast of the monsoon came after it became evident that the monsoon was taking longer than expected to revive beyond the southern peninsula.
The monsoon hit Kerala on May 23, ahead of schedule, but got stuck around the Deccan plateau for more than 15 days because no low-pressure area developed in time over the Bay of Bengal to pull it northward.
Now it is slowly advancing and is expected to cover most of central and eastern India over the next week and reach the northwestern states by the first half of July, the IMD said.
The progress of monsoon through July will also depend on a possible El Nino effect. There is a high probability this year of El Nino, a weather condition marked by warming of the eastern equatorial Pacific Ocean waters that could affect the monsoon.
“We will have to keep a watch on El Nino,” Chavan said.