Given the forecast of a deficient monsoon, Indian agriculture needs an economic stimulus

When drought strikes, farm animals are the first to be hit -- Statesman picture

The Indian Meteorological Department has in its latest forecast predicted a deficient monsoon. It has further lowered the monsoon estimates. From 95 per cent of the long-term average that was expected when the first forecast was made in April, it has further lowered the estimates to 93 per cent calling it below-normal monsoon. While the northeast is expected to get 99 per cent of what it normally gets, the shortfall is to the tune of 93 per cent in southern India and more pronounced at 85 per cent in northwest regions.

With El Nino – warm Pacific currents – likely to develop in August and strengthen further in September, the likelihood of an impending drought stares ahead. Although the private weather company Skynet has predicted 25 per cent chances of a drought building up, I am worried at the plight and suffering millions of small and marginal farmers across the country will entail. Already reeling under mounting indebtedness, and faced with a terrible agrarian distress, any shortfall in monsoon can put the deteriorating household economy back by several years. 

What pains me is the deliberate effort to view the monsoon shortfall only in terms of fall in growth. Many an economists/economic writers on TV channels have been repeatedly saying that the failure to push economic growth because of low agricultural production will mean that the overall economic growth will remain subdued as a result of which the Reserve Bank will not be able to lower interest rates.

Instead of worrying about GDP growth rate, it is high time that the entire focus of the new government should be on how to minimize the harmful impact on the livelihood of millions of small and marginal farmers. This is the time to channelize the entire government machinery towards fighting the drought in a way that helps mitigate the economic suffering, and at the same time take appropriate steps to save the standing crops and put in place a contingency plan. For this, there is an immediate need to first set up a war room in the Cabinet Secretariat that monitors the drought conditions on a daily basis.

I remember it was in 1987 that the country was faced with one of the worst droughts of the previous century. Almost the entire 147 million hectares of cultivable area was affected. But that was also the year when the country had a foodgrain buffer of 20 million tonnes. A meticulously planned food management programme, ensuring the availability of foodgrains in the deficit areas together with timely availability of inputs like diesel, electricity and anal water, helped tide over the crisis. Probably that was the first time after Independence that a massive drought did not lead to starvation and hunger.

A lot has changed between 1987 and 2014. But still, drought remains a nightmare for farmers as well as the government. This year, India already has a surplus food stock of 62 million tones, which is enough to keep normal food supplies in place and also ensure food inflation is under control. Besides stocking diesel supplies to augment groundwater irrigation in the deficit States, equally important is to make available fodder and cattle feed for the animals. In any drought like situations, it is the livestock that first feels the brunt but receives the lowest attention.

In addition to ensuring that farmers get adequate power supply to keep the tubewells running, it would have been much more fruitful if the Ministry of Agriculture had launched a nation-wide campaign encouraging farmers to make an immediate shift to sow paddy, the main kharif crop, with less water. The entire agricultural machinery, including agricultural universities and the State agricultural departments along with the private agribusiness companies, should have been involved in promoting the SRI method of rice cultivation which saves almost 30 to 40 per cent water.  In addition, a massive thrust should have also been on direct sowing of paddy instead of the water guzzling transplanting that we see all across the country.

Agriculture is the biggest employer in the country. Almost 70 per cent of the population is directly or indirectly engaged with farming. In addition to the low agricultural growth, what is more important is the loss of livelihoods reflected through farm suicides and increased rural-urban migration. A strong and economically viable agriculture is the foundation on which the entire economy grows. More is the purchasing power in the hands of the villagers; more is their ability to purchase consumer goods that moves the wheels of economic growth. It is therefore important to provide an economic stimulus package of at least Rs 1 lakh-crore to agriculture. 

The moment I talk about an economic stimulus for farmers I encounter an orchestrated uproar. But what we don’t realize is that at the time of the global economic crisis in 2008-09, Indian industry was given a stimulus package of Rs 3 lakh-crore. This package continued to be doled out for almost three years. If the industry can be given a huge stimulus for three years, why shouldn’t the poor farmers also get the benefit of an economic stimulus? It is high time the animosity towards rural India ends. Perhaps Prime Minister Narendra Modi will see merit in providing a bailout package to millions of hapless farmers. # 

Deficient monsoon predicted, give agriculture an economic stimulus
Hindustan Times, Chandigarh, June 14, 2014 http://bit.ly/1mVkdiG

Stimulus for agriculture
Orissa Post, June 13, 2014   http://www.orissapost.com/epaper/130614/p8.htm

2014 Monsoon predictions are not that promising. Tighten your belt.

In the midst of all the noise and muck-slinging that dominates the election campaigns there is bad news on the horizon. No, I am not talking of the possibility of a hung Parliament where the numbers don’t add up for any political front, but the possibility of a post-election scenario wherein the rains fail. With 25 per cent probability of a drought predicted, and slim chances of a bountiful monsoon in the north-western and central regions, dark days stare ahead.

Although the Indian Meteorological Department (IMD) has ruled out the possibility of the warm El Nino currents of the Pacific playing truant with the monsoon rains, a leading private meteorology agency Skymet has forecasted a grim season ahead. The IMD dismisses these claims as a conspiracy by scientists in the US and Australia to rattle the commodity markets in India. “It is in the US and Australian interests that agricultural commodity and stock markets come down. They are spreading rumours. People will start hoarding and might start creating artificial scarcity of commodities. Don’t heed their advice,” Laxman Singh Rathore, director-general of IMD had said a few weeks back. 

Although IMD has never been able to predict an impending drought, but I see merit in what it is trying to convey. The moment a below-normal monsoon warning goes public, a lot of commercial interests benefit from the expected shortfall in rains. The resulting market sentiments push the food prices higher even when there is no shortfall in production. I have seen this happening in 2011 when food prices spiraled much before the low Kharif harvest had poured in. With business media channels daily naming the hot commodities where investors need to put their money in, commodity prices zoomed in expectation.

But while Agriculture Secretary says the government is not overtly worried at the prospects of the rains failing, the fact remains that Skymet’s earlier forecasts have been quite accurate. In 2012, it predicted 94 per cent rainfall, and the actual was 93 per cent: the next year in 2013 rains were a little higher at 106 per cent against the estimate of 103 per cent. This year, while the overall estimate of 94 per cent may not cause a significant drop in agricultural production and thereby impact grain availability considering the existing massive food reserves but what should be worrying is the prediction of a weak monsoon spread over northwest and west-central parts of the country – Gujarat, Saurashtra, Kutch, Punjab, Haryana, Rajasthan, Madhya Pradesh, Chhatisgarh, central Maharashtra, Goa, Konkan and parts of Karnataka and Telengana. It is always the rainfall spread that is important than the average. 

What makes the monsoon forecast a matter of concern is the prediction that El Nino – warm ocean currents in the Pacific region that often causes severe draught in Australia, New Zealand, Southeast Asia and India – might appear as the monsoon season gets along. While weather forecasters from Australia, China, South Korea, Japan and US have issued El Nino warnings, the saving grace is that such warnings were also issued in 2013 but somehow the impact was not as disastrous as many predicted. In 2013, the IMD had predicted the onslaught of El Nino in September when the rains were tapering off. In other words, El Nino does not cause heavy damage every time it emerges in the Indian Ocean. 

In 2009, the Met Department had predicted 96 per cent rainfall as the long-term average but the country had faced one of the worst droughts in recent times. The actual shortfall in rainfall was a huge 23 per cent resulting in low agricultural production. Paddy alone registered a fall of 12 per cent in production. But in 2012, when rains were also predicted to be in the range of 96 per cent there was a delay in the onset of rains in over 70 per cent of the cultivable areas but the overall impact was not as severe as in 2009. Interesting, this year Skymet is predicting rainfall to be 94 per cent of the long-term average and thatshould be taken as a forewarning.

If the weather plays foul it will be double whammy for farmers in central India. Unusual rains and hailstorm had lashed standing crop in the month of March resulting in a huge loss in Maharashtra and Madhya Pradesh. As many as 24 lakh hectares in Madhya Pradesh and another 18 lakh hectares in Maharashtra were hit be frequent hailstorms. Excessive damage was also reported from parts of Punjab, Haryana, Rajasthan, Uttarakhand, Himachal Pradesh, Karnataka and Tamil Nadu. The centre had provided a package of Rs 1,351 crores to Madhya Pradesh and Maharashtra for relief purposes.

Barely emerging out of the shadows of freak weather, the warning of a weak monsoon (and probably enlarging into a drought) will push millions of farmers into dire straits. Already reeling under a terrible agrarian distress, a severe drought even in some parts can leave behind a crumbling rural economy and a battered farming community. In the absence of any effective weather-based crop insurance scheme, and knowing how flimsy are the relief measures adopted, it is the farmers who suffer the worst from a deficient monsoon.

Earlier too, in 2002 and 2004, which happened to be drought years, rainfall deficiency was to the tune of 22 per cent and 17 per cent. In September 2012 when monsoon rains arrived late, four states had declared drought – Maharashtra, Gujarat, Karnataka and Rajasthan. But later these areas were lashed with heavy rains in the second half of August and the first half of September. So much so that excess water in several reservoirs had to be released thereby inundating several towns and villages. Gujarat had in fact pressed in evacuation services.  

This only shows that climatic variations arising from global warming are causing an unforeseen volatility in weather patterns. The long term strategy therefore has to be two pronged: 1) the economic growth model based on investments and exploitation of natural resources has to be balanced in such a manner that it does not leave the environment bleeding. 2) A country-wide drought proofing programme accompanied by weather-based crop insurance scheme has to be prepared. Although this has been talked about for quite long, but hasn’t yet received the priority that it deserves. 

Country’s economic growth depends on agriculture. If farming is affected negatively by the failure of monsoon and the inability of the government to minimize the impact, the resulting domino impact is felt by the entire economy. Even if the share of agriculture in the country’s GDP has come down to 14 per cent, its still remains the backbone of India’s economy. #

Fearing Drought. Deccan Herald, April 18, 2014. 

http://www.deccanherald.com/content/399762/fearing-drought.html 

मौसम की नई मुसीबत  Dainik Jagran, April 19, 2014.
http://www.jagran.com/editorial/apnibaat-new-trouble-of-weather-11246210.html

Delayed monsoon keeps the country on edge.

Once again the rain gods are playing truant. With 31 per cent shortfall in June, and with an expectation of only 70 per cent of the predicted 96 per cent rainfall for the July- August months, crucial for farming operations, kharif crops face a real threat.  

 

In June alone, Ministry of Agriculture has calculated the shortfall in paddy transplanting to be around 26 per cent in the frontline agricultural states of Punjab and Haryana. Sowing of maize, bajra, jowar have been much low in Rajasthan, Madhya Pradesh, Maharashtra and Karnataka.  Although the Ministry claims that the sowing of pulses, oilseeds and sugarcane has been near normal, any further delay will have a serious repercussion on kharifproduction. Even in Uttar Pradesh, Chhatisgarh, Odisha and Andhra Pradesh, the standing crop is coming under pressure with every passing day. 

If the rains get delayed by another week or so, all estimates will go topsy-turvy. It will then be time to press the panic button. 

Agriculture Minister Sharad Pawar is trying his best to play down fears of an impending drought. Coming at a time when the annual growth has slipped to 6.5 per cent, any indication of an expected shortfall in agriculture production will send the markets soaring. While any loss in production following the dry spell will further hit the growth story, it will also push up food inflation thereby inviting a lot of drubbing for the government. “We are fully prepared to meet any rainfall deficiency situation, and all states have been directed to be ready with the farm ministry’s contingency plans,” he said. 

What makes the monsoon forecast a matter of concern is the prediction that El Nino – warm ocean currents in the Pacific region that causes severe droughts in Australia, Southeast Asia and India – might appear in September. The US-based International Research Institute for Climate and Society as well as the Australian Bureau of Meteorology has predicted the possibility of El Nino striking in the latter half of the year. Our own meteorological department thinks the chances of El Nino appearing in September is around 36 per cent. If that happens, it will mean a drier September which would certainly result in production loss at the time of grain formation in standing crops.  

How serious is the impact of El Nino factor can be gauged from the fact that the previous five droughts in India were all because El Nino had appeared in a significant form. Globally, if you examine the meteorological data of past 110 years, of the 21 major droughts 15 were caused by El Nino. The fury and intensity of El Nino cannot be simply glossed over. 

It isn’t easy to make correct long-term predictions about the behaviour of monsoon. Not only the Indian Met department, even internationally the predictions have not been sharp and correct. This year the predictions by some of the best known institutes abroad for monsoon range from complete failure to normal. Over the years, the IMD has moved away from the statistical method to a more improved dynamic model but to expect that the predictions will hit the bull eye is still far away. In fact, the Met Dept has not been able to predict drought in the past 130 years. 

In 2009, the country faced one of the worst droughts in recent times. The Met Department had predicted 96 per cent rainfall in the long-term average. The actual rainfall was short by a whopping 23 per cent resulting in a loss in paddy production to the tune of 12 per cent. This year too, the Met Department has predicted monsoon to be in the range of 96 per cent, and there has already been a delay of about a fortnight in over 70 per cent of the geographical area. 

Even if the deficient monsoon turns into a drought, the redeeming factor is that the country is saddled with a record 82.4 million tonnes of wheat and rice. There is no danger of an impending famine in case production slumps from an impending drought. With such comfortable food stocks, the government should be able to judiciously distribute it among needy states and at the same time make open-market releases so as to bring price rise in staple food under control. Also, there will be no need to look for food imports considering the sufficient stocks lying within the country. In any case, international wheat supplies too is expected to slump following a severe drought in the midlands region of US, comprising the wheat production belt.   

This is why India must spurn the G-20 directive which makes it obligatory for member countries to export any surplus food. Although the G-20 objective is to ensure that the global food prices don’t harden in wake of short supplies, India cannot afford the luxury considering its huge population and the need to maintain enough foodstocks at all times for precariously balancing its food security needs. Domestic policies therefore have to take precedence over international obligations. Allowing the export of skimmed milk powder just a month before the monsoon begins too is not a worthwhile decision knowing well that milk production drops in summers. A prolonged dry spell is first going to hit dairy production. #