Many a slip...

A round of cheers has gone around in the markets, on the India Meteorological Department’s prediction of a near normal South-West monsoon for 2019. In its first forecast for this year, the IMD has said that it expects the overall quantum of rainfall for June-September to be 96 per cent of the Long Period Average (LPA). A normal monsoon would be quite welcome this year because, with the failure of the previous North-East monsoon, over 40 per cent of the country is reeling under drought-like conditions, facing moisture stress and severe water shortages. Economy watchers seem to be looking to a good monsoon to lift flagging rural consumption and alleviate farm distress. But the track record of IMD’s initial forecasts and the many imponderables hanging over rainfall patterns suggests that it is much too early to celebrate.

While IMD’s headline forecast seems to be positive, a deeper dive into it shows that it pegs the probability of a ‘near normal’ monsoon at just 39 per cent, with the likelihood of below normal and deficient monsoons also quite high at 31 and 17 per cent respectively. Global weather watchers have been warning of developing El Nino conditions in the Pacific this year and the phenomenon has always been a wild card factor for Indian monsoons. The IMD has made light of this risk, citing a weak El Nino and pinning its hopes on a positive Indian Ocean Dipole developing over the season, to bring about normal rains. But as an RBI paper noted in 2015, even weak El Nino conditions have been known to precipitate severe droughts in India, as had transpired in 2002. The IMD’s early monsoon forecasts are also known to be wide off the mark, with its June and August updates presenting a more realistic picture. In 2015, the worst drought year in recent memory, IMD’s April forecast pegged rainfall at 93 per cent of LPA, but season ended with a 14 per cent deficit. Nor is it a given that healthy quantum of rainfall will alleviate rural distress as the distribution of rains between irrigated and non-irrigated regions matters. In any case, the main problem faced by Indian agriculture today is one of high marketable surpluses. In the last four years, despite sub-par monsoons, domestic farm incomes have been battered by falling produce prices.

All this suggests that the poll-bound government cannot afford to get complacent about the farm economy based on the forecast and must ready contingency plans to deal with a sub-par monsoon. Undertaking water conservation measures on a war footing, ensuring timely credits of income support/subsidies, ensuring adequate insurance coverage against crop losses and a proactive trade policy on agri-commodities would be essential components of this plan. It is also time for the IMD to move to more decentralised forecasts that offer more insights on spatial and temporal distribution of rains, for them to be of greater utility to growers and policymakers.

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