India’s agriculture-based economy gripped in uncertainty as IMD revises monsoon arrival
India’s agriculture-based economy gripped in uncertainty
as IMD revises monsoon arrival
India’s agriculture-based economy is gripped in uncertainty as IMD revised South West Monsoon arrival.
Till June 29, many districts of Kerala, did not receive any heavy rainfall when it should be raining heavily, except for a few scattered showers here and there. The IMD has predicted a delayed arrival of the southwest monsoon, which is crucial for the kharif season in India when major food crops like rice are grown. The IMD has also warned that the dreaded El Nino, characterised by extreme sea surface warming and delayed monsoon, is expected to set in, and the second half of the season (August to September) is also expected to experience low rainfall.
If El Nino impacts rainfall as per historical trends, India will face a deficit monsoon after four years. However, the IMD maintains that the monsoon will be “normal.” El Nino is a climate pattern characterised by unusual warming of surface waters in the eastern Pacific Ocean, leading to an escalation of ambient temperature.
The assurance of a normal monsoon no longer determines a farmer’s agricultural yields. Instead, it is the distribution of rainfall that determines crop yields. As per past decade observation, erratic monsoons and prolonged dry spells during the crucial second half of the farming cycle have damaged crops and reduced production, resulting in a steep decline in farmers’ income. However, this season, farmers are facing additional unfavourable conditions that hint at significant losses in agricultural operations. This will have a significant impact on the Indian economy.
Firstly, farmers and farm workers enter the new season, kharif, which accounts for half of India’s food supply, without significant capital. Rural wages in the agriculture sector have not shown any growth when adjusted for retail inflation. Earnings from the previous season have not been profitable. Currently, farmers earn more from their labour than from growing crops, rendering their capacity to invest in the new season negligible. However, farmers will sow, as agriculture is the only dependable occupation available to them, and opportunities in non-farm work are limited. Secondly, in recent years, farmers have been starting the crop cycle in July due to the delayed monsoon and erratic progress of rains in June, which have resulted in significant economic losses. However, the effects of El Nino may be felt from August onward. Erratic and overall deficient rainfall, along with consequent dry spells, are characteristic impacts of El Nino. For farmers who have just started sowing, these adverse effects would mean a total disruption of farm operations, leading to low crop yields. This may also result in a large number of farmers abandoning farming for this season. In recent years, thousands of farmers have simply not undertaken farming due to weather uncertainty.
ICRA, the consulting agency (Investment Information and Credit Rating), predicts that due to the onset of El Nino, agricultural gross value added (GVA) growth will be only 2.5 per cent for 2023-2024. According to provisional data from the Union Ministry of Statistics and Programme Implementation, Agri GVA in 2022-2023 was 4 per cent. Based on this data, the growth of the agriculture sector played a crucial and defining role in India’s last financial year.
Therefore, a dip in the agriculture sector’s growth would result in income loss for the majority of the Indian population. This will inevitably have an adverse impact on private consumption, leading to a significant contraction of the overall Indian economy.
News Edit K.V.Raman
