Sub-par monsoon not a crisis; agriculture has shown resilience: Chand

Former NITI Aayog member and noted agriculture economist Ramesh Chand says India is better prepared to handle rainfall variability than in the past

With the 2026 southwest monsoon predicted to be below normal, former NITI Aayog member and noted agricultural economist Ramesh Chand says India is better prepared to handle rainfall variability than in the past. In an interaction with Business Standard as part of the “Business Standard Dialogue” webinar series, Chand spoke of monsoon forecasts, agricultural resilience, drought-proofing, and inflation risks. Edited excerpts:

 

This year is expected to see one of the worst El Niño events in recent years. Can this trigger a crisis?

 

There are two aspects here: Predictions about El Niño by international agencies and forecasts by our institutions. Experience shows that the monsoon forecasts by the India Meteorological Department (IMD) tend to be more reliable.

The IMD has likely factored in the evolving El Niño conditions. As of now, it has projected rainfall at about 92 per cent of the long-period average. Importantly, India has not experienced a year of deficit rain since 2015. We have had nearly a decade of normal or slightly above normal rainfall, never going below 94 per cent.

 

During this period, several structural improvements took place. One notable trend is that India has not seen a contraction in the agricultural sector since 2015, which is remarkable. Even when we consider weaker monsoon years like 2014 and 2015, when rainfall was 84-85 per cent, agriculture showed resilience.

 

My statistical analysis suggests that deviation in foodgrain production in such years was significantly lower than in earlier decades. This is because the amount of rain alone does not determine agricultural output. Timing and distribution are equally important.

 

For instance, excessive rain early in the season, followed by weak precipitation in August or September, can be harmful. Conversely, consistent and well-distributed rainfall — even if slightly below normal — can produce better outcomes than erratic or excessive rainfall.

 

Another crucial factor is the onset of the monsoon. If it arrives late, total precipitation, even if it is normal, may not prevent crop damage.

 

Irrigation has also emerged as a key buffer. Over the past decade, the irrigated area has expanded from about 50 per cent to nearly 60 per cent.

 

Additionally, the composition of agriculture has changed. The share of crops is gradually declining while livestock and fisheries, less dependent on the monsoon, are increasing.

 

The period of India seeing normal or excess rain coincides with your tenure at the NITI Aayog. What steps were taken to reduce the impact of poor monsoons?

 

It is important to distinguish between national and regional pictures. Even if the country as a whole did not face drought in the last decade, several states did experience deficit rain.

 

That said, the NITI Aayog was not complacent. A number of initiatives were undertaken to strengthen drought resilience. The focus has been on water-resource management, particularly conservation and enhancing storage capacity.

 

Today, reservoir levels are significantly higher. We have about 26 per cent more water in reservoirs over the 10-year average and about 14 per cent more than last year.

 

Another important initiative has been preparing and refining contingency plans in districts. These plans outline the things each district should do in the case of drought or deficient rainfall.

 

Schemes such as those under the Mahatma Gandhi National Rural Employment Guarantee Act have contributed to drought-proofing. These include constructing water-conservation structures and strengthening rural livelihoods. Irrigation expansion, as mentioned earlier, has been another major contributor.

 

With the possibility of a weak monsoon and ongoing geopolitical tensions, is this the right time to push reforms in sectors such as fertilisers?

 

The fertiliser sector is important, but I would not classify the current measures as “reforms” in the strict sense of the term. Reforms typically involve legislative or regulatory changes requiring parliamentary approval.

 

In the sector, most actions are administrative, such as decisions on levels of subsidies. Within this framework, there is considerable scope for improvement without major legal changes.

 

India needs more investment in fertiliser production. There is also significant potential in using the country’s large coal reserves for gasification, which can then be used for manufacturing urea.

 

Are these the only reforms needed now?

 

Reforms in agriculture are needed at multiple levels. But if I were to link them to the monsoon, we first need trade liberalisation, whether we have a surplus or deficit.

 

Second, there is ample evidence that agricultural diversification is happening in states that are relaxing rigidities in the Agricultural Produce Marketing Committee (APMC) Act and allowing direct sale by farmers. 

 

Thirdly, I feel there is a need to ease norms on land leasing. This is important because if in some part of the country the monsoon is weak, people might be forced to migrate for jobs to other states or to cities. In that situation, land leasing must be liberalised.

 

Then we are discussing areas such as the Seeds Bill and Pesticide Bill. But they come second.

 

Among cereals, pulses, and vegetables, which category faces the highest risk of price increase?

  In the case of cereals, the government plays a stabilising role through buffer stocks. Currently, we have around 60 million tonnes against a normative requirement of about 20 million tonnes.

 

This allows the government to intervene in markets and control price volatility. In fact, market signals suggest that private traders are not anticipating a sharp rise in cereal prices.

 

As a result, cereals are likely to remain stable. This is also reflected in the government’s decision to allow wheat exports despite concerns about monsoon performance.

 

Pulses, however, are more vulnerable. Although buffer stocks have improved, they are grown largely in rain-fed areas and are more sensitive to monsoon variability.

 

Vegetables are the most volatile segment because their prices tend to fluctuate with supply disruption. However, the inflation environment is relatively benign.