Amid contrasting predictions for the 2012 southwest monsoon, all eyes are now on the India Meteorological Department (IMD)’s official monsoon forecast, expected by the middle of this month.
The forecast, the first in a series of such predictions, is vital not only to Indian agriculture, but also for the overall economy. This year is no different, barring the fact that an adverse performance of the monsoon would only jeopardise the green-shoots of economic recovery that are expected to sprout this financial year.
“After two consecutive years of good monsoon, the law of averages says 2012 could be a year of uneven rains. Hence, we are leaving nothing to chance,” said a senior farm ministry official.
Ahead of the official forecast, the Pune-based Indian Institute of Tropical Meteorology predicted the southwest monsoon in 2012 would be above average. The predictions were based on a new coupled forecast model, not the statistical model usually used.
“Although a weak El Nino may develop in the later part of the season, the experimental dynamical model still shows monsoon is more likely to be more than normal,” B N Goswami, a director at the institute, told Bloomberg.
This is in variance with the forecasts by the Japan Agency for Marine-Earth Science and Technology and the International Research Institute for Climate and Society, Columbia University, which predicted the chances of an above-normal monsoon in India this year were little.
The United Kingdom’s meteorological office, in its long-range global weather forecast, said the chances of above-normal rainfall in India during the four-month period of July to September were only 40 per cent.
A worried Indian agriculture ministry is leaving nothing to chance. It has already issued advisories to all states and Union territories to prepare a contingency plan in the event of low rains. It is especially focusing on drought-prone districts of the country.
“Till the time uncertainty over the weather is over, the country can just wait and watch, because the IMD’s annual monsoon forecast has also not always been accurate,” Ashok Gulati, chairman, Commission for Agriculture Costs and Prices, told Business Standard.
The target of achieving 7.6 per cent growth in gross domestic product in 2012-13 hinges on a decent agricultural performance, much of which is still dependent on the four-month southwest monsoon season.
For the corporate sector, the booming rural economy, which has helped tackle the slowdown, could head for a tailspin if the southwest monsoon is below par this year.
The biggest impact, however, would be on agriculture, as 55 per cent of India’s agriculture is still rain-fed. Production of vital kharif crops like paddy, coarse cereals, pulses, oilseeds and cotton is dependent on the four-month monsoon season starting June. The rains also provide critical moisture to the soil that helps sustain production during the ensuing rabi sowing season.
A good monsoon this year is doubly important for good agriculture production, as rains have been negligible in the country since mid-September.
According to the IMD, between October and December, the country received almost 40 per cent less rain, which means most of the farmland is currently devoid of any tangible moisture content.
As on April 4, the water level in the 80-odd major reservoirs across the country was 48.19 billion cubic centimetres, 83 per cent of last year’s storage during the same period and 31 per cent of the full-reservoir level. However, this being just the beginning of a long summer, these levels can decline quite fast.
Gulati said, “Though till now, nothing was clear on the monsoon front, we should not sit back, as some agencies have predicted the emergence of the dreaded el Nino phenomenon this year.”
“In 2011-12, despite a good monsoon, the production of coarse cereals, pulses and oilseeds dropped. Hence, this year’s monsoon would be vital to the performance of these three crops,” he added.
Not just agriculture, the rains are also critical for various companies as well. The sale of tractors in rural areas, which zoomed to about 18 per cent in the previous two years before petering off in 2011-12, could drop further if rains are dismal this year. Similar would be the impact on fast-moving consumer goods companies, which derive 30 per cent of their annual sales from rural areas.
“If you look at the past, tractor sales have shown a decline when monsoons failed. The situation is more severe if there are consecutive failures…. Nevertheless, we believe in 2012-13, out tractor sales should show reasonable growth, as labour has become costly and crop rotation has increased,” said a senior official from a large tractor manufacturer.
The Rs 100,000-crore Indian fertiliser market depends on the southwest monsoon season for much of its annual sales. A Roy, marketing director, Indian Farmers Fertiliser Cooperative Limited, told Business Standard, “If the monsoon is less, it would definitely impact the sale of fertilisers. If it doesn’t rain in major states like Rajasthan, Karnataka and Maharashtra, which are the major consumers of fertlisers, the impact would be more.”