This season’s persistent rains have Indian farmers bouncing between despair and hope. From June to September, the southwest monsoon nourishes the kharif crop, moistens land for the winter rabi crop, and replenishes reservoirs for future planting cycles.
Because subcontinent farmlands are not equally well-irrigated, rainfall quantity and dispersion are significant.
Rain-fed or under-irrigated regions are more vulnerable to monsoon deficiency.
Insufficient rains reduce agricultural yields, while too much can wash away seedlings and ruin harvests.
Therefore, an all-India ‘normal’ rainfall reading does not indicate everything is great.
Every fortnight, things change. In mid-June, the deficit was 53% over the usual.
This improved to 10% shortfall by June-end, 0% in mid-July, 5% surplus by end-July, and 5% deficiency by mid-August.
The northwest has continuously had excess rain, the north-east weak-to-deficient, the southern peninsula fluctuating between deficit and excess, and central India largely normal with a brief surplus.
As of July, Bihar, Jharkhand, and West Bengal had 22% to 48% kharif shortages, whereas Haryana, Rajasthan, Gujarat, Telangana, and Punjab had 38% to 78% excess.
By mid-August, Bihar and Jharkhand are deficiency and Haryana, Rajasthan, Gujarat, and Telangana are abundant. Normalcy has returned to West Bengal and Punjab.
Pulses, jute, mesta, cotton, and oilseeds have had lesser sowing acreage due to fluxes. West Bengal rains helped paddy sowing recover from a significant deficit.
Lower irrigation cover vulnerabilities must be considered for a whole state and crop viewpoint.
Irrigated land covers 57% of foodgrain production. Major producer Maharashtra has 19.1% irrigation coverage, whereas Punjab has 98.8%.
These figures vary crop-wise. Rice has 65% irrigation cover in India, although pulses (particularly tur) are more rain-fed at 23%.
Thus, low-irrigation areas like Maharashtra, Karnataka, and Odisha and crops like tur and coarse grains like bajra and jowar are particularly susceptible to weak rainfall.
CRISIL computes the Deficient Rainfall Irrigation Parameter (DRIP) by mapping rainfall data with irrigation cover to better understand ground-level susceptibilities.
The gauge shows endangered crops and states.
Between June 1 and August 9, five large states had poor DRIP scores. These are Bihar, Jharkhand, Karnataka, West Bengal, and Maharashtra, where rains have just caught up. Rice, tur, and jowar are struggling.
DRIP scores, unlike sowing data, are compared to the preceding season and the last five-year average for a more complete picture. Look at the granular impact.
This year, crop prospects are key due to price pressures from decreased supply and shortages locally and worldwide.
According to the Ministry of Agriculture’s third crop production estimate, rice output (kharif + rabi) decreased by ~3% last year. Rice output worldwide is at a historic low due to weather. Weather and geopolitical conflicts affect wheat availability and prices.
Pulses cycle up every three years. Additionally, kharif seeding has been impacted, and any monsoon distress from El Niño would increase inflation.
Cereals and pulses have 13% inflation. While government action through stock releases, imports, and hoarding and export restrictions can limit the upside, inflation rates in these two commodities are unlikely to fall this fiscal.
Due to increasing procurement and animal feed costs, milk, another major consumption item, has been inflating. Rains might affect livestock feed supply, raising milk costs.
Vegetables, which have been in the spotlight recently, seem to be most affected by weather.
While tomato prices tripled in July, other crops also cost more. Seasonality, the April temperatures, and irregular precipitation are to blame.
The July ‘TOP’ inflation rate was 52.6%. Even without it, vegetable inflation was 37.1%. That’s broad pressure.
West Bengal, Madhya Pradesh, Bihar, Maharashtra, and Gujarat cultivate more veggies.
High temperatures and lack of rain have affected West Bengal, the main producer.
The top fiscal policy priority is lowering inflation, spearheaded by supply-side initiatives.
The coming weeks are essential for policymakers.
Rains will affect inflation and monetary policy in the event of protracted inflation.
A drop in agricultural production can also strain rural earnings, which have been recovering slowly.
