Dealing with a dampener

The prospect of a second straight below ‘normal monsoon’ is not good news at all for Indian agriculture. Last year, the southwest monsoon ended up being 12 per cent below the 50 year average (1951-2000), which is estimated at 89 cm. This year, the Indian Meteorological Department expects the monsoon to be 93 per cent of the long period average (LPA). Like last year, when its initial forecast was 95 per cent, we may end up with less. But an overall statistic of deficiency or excess does not convey very much because it conceals spatial variations as well as the time period over which rain is spread, and their significant impact on agriculture. For instance, the rainfall deficit by the end of June last year was 43 per cent, which came down to 17 per cent by the end of July. The shortfall was pronounced in northwest India, which experienced floods in September-October. Therefore, an all-encompassing number of minus 7 per cent for this year, thanks to the build up of El Nino conditions, points to a possible repeat of 2014 — a perplexing combination of floods, droughts and crop loss to cope with — if not worse. And it is no consolation that the IMD’s short-term forecasts have become more reliable in recent years. Therefore, if a truant monsoon dragged down agricultural growth to 1.1 per cent in 2014-15, from 3.7 per cent in 2013-14, we should be prepared for a repeat.

The government machinery is quite at a loss to cope with a weather-induced farm crisis, despite being armed with advance warning systems. Its response should be at three levels: technological preparedness, compensatory mechanisms, and macroeconomic policies. The government needs to move away from the ‘monsoon calendar’ mindset, with erratic rainfall being the order of the day, and instead have a flexible cropping strategy in place. Karnataka promotes late varieties of jowar and ragi to deal with a ‘new normal’, namely, a delayed monsoon, but there are few technological choices to deal with early onset of rain. The ICAR should actively promote both drought and flood resistant varieties of paddy.

An efficient compensatory mechanism requires a coordinated effort across government departments ranging from agriculture, finance, water resources, and chemicals and fertiliser as well as between the Centre and States, which is not in evidence. Weather-based insurance should be promoted on a war footing. Since the indemnity amount is based on rainfall variation rather than crop loss, it can be easily disbursed before the end of the cropping season, alleviating farm distress. Macroeconomic preparedness calls for coordination between support price and trade policies. There should be no need to resort to knee-jerk export bans or sudden entries into the world market as a bulk buyer. The deficit in storage is another huge concern, to address which FDI in retail must be prioritised. This is a plateful of policy concerns for the government, but they must be ingested.

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