Nor­mal rain fore­cast boosts farm hopes

IMD fore­casts rain­fall at 97% of long pe­riod av­er­age

Business Standard - - FRONT PAGE - SANJEEB MUKHER­JEE

The 2018 south­west mon­soon is ex­pected to be ‘nor­mal’, bright­en­ing chances of re­cov­ery in the farm sec­tor, which has seen fluc­tu­at­ing growth rates in the re­cent past.

The mon­soon rains were a tad be­low nor­mal the pre­vi­ous year, though the weather depart­ment had pro­jected those to be nor­mal.

Re­leas­ing its first fore­cast for the south­west mon­soon, the In­dia Me­te­o­ro­log­i­cal Depart­ment (IMD) said rain­fall in June-Septem­ber was pro­jected at 97 per cent of the long pe­riod av­er­age (LPA), with a model er­ror of plus and mi­nus 5 per cent.

The LPA is av­er­age rain across the coun­try from 1951 to 2000, es­ti­mated to be 89 cm. The mon­soon is con­sid­ered nor­mal at 96-104 per cent of the LPA.

A nor­mal mon­soon will not only aid growth in the agri­cul­tural sec­tor but could also have a pos­i­tive im­pact on the ru­ral econ­omy ahead of cru­cial state elec­tions, fol­lowed by the gen­eral elec­tion in 2019.

“El Niño, gen­er­ally as­so­ci­ated with low rain­fall, is ex­pected to be weak dur­ing the start of the mon­soon sea­son in June. The In­dian Ocean Dipole (IOD), an­other crit­i­cal fac­tor in­flu­enc­ing the mon­soon, is also pro­jected to be weak but will oc­cur only at the later stages. Also, most global mon­soon models are pre­dict­ing ‘nor­mal’ rain­fall for In­dia this year,” said IMD Di­rec­tor-Gen­eral K J Ramesh.

He said there was a 42 per cent chance of rain­fall be­ing nor­mal this year, and a 30 per cent prob­a­bil­ity of it be­ing be­low nor­mal.

El Niño is a warm­ing of the sea sur­face along the equa­to­rial Pa­cific Ocean. In the IOD, the sea sur­face in the west­ern In­dian Ocean be­comes al­ter­nately warmer and cooler than the eastern part.

The IMD will up­date its fore­cast in June, when it is­sues re­gion-wise fore­casts. Of­fi­cials said the pre­lim­i­nary in­di­ca­tions were that rain­fall could be fairly dis­trib­uted across most parts of the coun­try, bar­ring south and north­east In­dia. The IMD also said there was ‘low prob­a­bil­ity’ of rain­fall be­ing de­fi­cient this sea­son.

En­cour­aged by the fore­cast, Agri­cul­ture Sec­re­tary S K Pat­tanayak said food­grain pro­duc­tion might sur­pass this year’s es­ti­mated record high of 277.49 mil­lion tonnes (mt). “The nor­mal mon­soon will boost kharif sow­ing, which starts in June,” he told PTI.

Any slight de­fi­ciency of rain­fall in the south­ern penin­su­lar and north-eastern re­gions for a month would re­cover, he felt.

Pulses and paddy are among the main crops grown in south In­dia.

For the 2017-18 crop year, which ends in June, the agri­cul­ture min­istry has pegged over­all food­grain out­put at 277.49 mt against 275.11 mt last year.

A good har­vest could also de­press farm in­comes, un­less sup­ported by strong off­take mea­sures.

In its re­cent mon­e­tary re­view, the Re­serve Bank of In­dia (RBI) stated over­all food in­fla­tion should re­main under check, on the as­sump­tion of a nor­mal mon­soon and ef­fec­tive sup­ply man­age­ment by the gov­ern­ment. Con­sumer price in­dexbased food in­fla­tion dropped to 2.81 per cent in March from 3.26 per cent in the same month the pre­vi­ous year.

“Good rain­fall is a pre­req­ui­site for in­dus­tries such as agrochem, fer­tilis­ers, seeds and ir­ri­ga­tion equip­ment. In­dus­tries such as sugar, ed­i­ble oils, other food prod­ucts and tex­tiles are di­rectly af­fected by the mon­soon. Rain­fall needs to be mon­i­tored closely as we ap­proach the sea­son,” said Madan Sab­navis, chief econ­o­mist, CARE Rat­ings.

Ear­lier this month, pri­vate weather fore­cast­ing agency Skymet said rain­fall in 2018 would be at 100 per cent of the LPA. It also said that there was zero pos­si­bil­ity of na­tion­wide drought or de­fi­cient rain, when the to­tal cu­mu­la­tive sea­sonal rain­fall across the coun­try falls be­low 90 per cent of the LPA.

“These are early fore­casts. Timely ar­rival of the mon­soon, fol­lowed by healthy monthly and re­gional dis­tri­bu­tion, will be cru­cial,” rat­ings agency CRISIL said.

It added for 2018-2019, agri­cul­tural growth would be 3 per cent, the same as in the pre­vi­ous fi­nan­cial year.

As for gross do­mes­tic prod­uct growth, its fore­cast is 7.5 per cent, up from 6.6 per cent in 2017-18.

ICRA Prin­ci­pal Econ­o­mist Aditi Na­yar ex­pected agri­cul­tural GVA growth to be mod­est at 3-3.5 per cent in 2018-19, if the tem­po­ral and spa­tial dis­tri­bu­tion of the mon­soon was nor­mal.

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