The return of the rain

Cautious optimism about the revival of the monsoon

A progressive improvement in the monsoon, after a dismal June that saw rainfall deficient by over 30 per cent, has eased some worries over kharif crop production. Since then the rainfall deficit has been halved to 15 per cent, dispelling fears of a situation as bad as in 2009, when severe drought lowered foodgrain production by seven per cent. In addition, the fact that the monsoon’s revival is late does not affect the fact that the water level in major reservoirs has reached normal levels, ensuring that water will be available for post-monsoon crop irrigation, hydroelectric power production and other needs. Also, rural demand for both power and diesel has fallen sharply, softening the power rates in the spot energy market from their peaks two weeks ago.

However, fingers still need to be kept crossed: more rain is needed till the end of September to see the crops through. A reassuring factor for kharif output is that the area planted under some major crops – particularly paddy, oilseeds, cotton, jute and sugarcane – has already made up the earlier shortfall. The area under coarse cereals and pulses is still below normal, although sowing is still continuing for these crops. A notable feature of the current monsoon season is that the rainfall deficit has been worst in the northwest (Punjab, Haryana and western Uttar Pradesh), where agriculture is largely irrigated; and in the arid belt of western Rajasthan, where crop productivity is, in any case, low. The real worry was about interior Karnataka and parts of Gujarat and Rajasthan. Luckily, many of these areas have had good showers in the past week or so, facilitating crop sowing, even though belated. Thus, the earlier gloom has given way to cautious optimism about a kharif harvest only marginally short of the last year’s record.

That said, it needs to be understood that a drought no longer impacts either agriculture or the overall economy with the same intensity as it used to when the sector’s share of GDP was as high as 50 per cent (the 1950s) or 30 per cent (the 1970s). Agriculture’s share now is only 14 per cent. Therefore, it cannot affect overall GDP in a major way. The composition of the broad agricultural sector too has changed, with a perceptible decline in the share of crops and an increase in that of fast-growing sub-sectors like horticulture, livestock and fisheries. Going by official numbers, the share of crops in agricultural GDP has shrunk from 49 per cent in the triennium ending 1990-91 to 41 per cent in 2009-10. And, within the crops group, the contribution of cereals (rice, wheat and coarse grains) has dipped from 23 per cent to a mere 18 per cent. Incredibly, milk is now the country’s largest farm product in terms of both production (estimated at over 125 million tonnes) and value, leaving rice or wheat far behind. These, evidently, are the telling indicators of the ongoing diversification of the Indian agriculture with greater emphasis on high-value products. This trend needs to be encouraged to boost the agriculture sector’s resilience against adverse weather, and to meet the growing demand for such products.