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Business News/ Industry / Will 2014 be a drought year?
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Will 2014 be a drought year?

Half of the country by area has received deficient or scanty rainfall in the south-west monsoon season so far this year

Overall, rainfall has fallen 18-20% short of the long-period average so far in the June-September monsoon, which waters most of India’s crops. Photo: BloombergPremium
Overall, rainfall has fallen 18-20% short of the long-period average so far in the June-September monsoon, which waters most of India’s crops. Photo: Bloomberg

New Delhi: Half of the country by area has received deficient or scanty rainfall in the south-west monsoon season so far this year, and some experts are veering around to the view that 2014 will be India’s first drought year since 2009.

Overall, rainfall has fallen 18-20% short of the long-period average so far in the June-September monsoon, which waters most of India’s crops.

According to the India Meteorological Department (IMD), when the rainfall deficit is more than 10% and when 20-40% of the country’s area is hit by drought, the year is termed an All India Drought Year.

As much as 47% of the country has received deficient rainfall and 3% received scanty rainfall. Rainfall is considered deficit when it is between 20% and 59% lower than average and scanty when it is between 60% and 99% lower.

“Some areas may recover in September, we will have to see. Going by the current situation, there is a chance that this year will be declared as a moderate or even severe drought," said Pulak Guhathakurta, senior scientist at the hydromet division of IMD in Pune.

IMD will take a final call at the end of September on whether 2014 qualifies as a drought year.

A drought could hurt farm production and boost food prices, fanning inflation that the government and the Reserve Bank of India (RBI) are trying to curb, and affect the livelihood of rural dwellers who make up two-thirds of the country’s population.

It has the potential to set back efforts by the newly elected National Democratic Alliance government to bolster economic growth that fell below 5% for two years on the trot.

Monsoon rainfall is the main source of irrigation for more than half of the cultivated land in India, and delayed rainfall in several states led to a delay in the sowing of kharif seeds. Farmers have been advised to sow short-duration crops this year after missing out on several days of the sowing period.

The deficient rainfall has to be assessed geographically to assess its impact on food production, said Madan Sabnavis, chief economist at Care Ratings, a rating company.

“Some of the regions that have been impacted include Vidarbha and Marathwada in Maharashtra, Gujarat, some parts of Andhra Pradesh and northern Karnataka. This will impact production of pulses, oil seeds and core cereals and consequently exert an upward pressure on food prices," he said.

As of 22 August, sowing of crops had been completed in 93.5 million hectare (ha), marginally lower than the 97.6 million ha sown by this time last year. The area under cultivation of coarse cereals, oilseeds and pulses showed a decline of 13%, 8.2% and 6.8%, respectively.

As of 26 August, East and North-East India had recorded a rainfall deficiency of 12% of the average, northwest India 34%, central India 17%, and south peninsula 12%.

While late July and August compensated somewhat for the poor rainfall in June and early July, monsoon rain has remained below average since 6 August. In the past week, Uttar Pradesh, Haryana, Chandigarh, Delhi, Punjab and East Madhya Pradesh received almost no rain.

The government agency said rainfall in the August-September would be 95% of the average, and that there was a 68% probability of seasonal rainfall being deficient and a 24% probability of seasonal rainfall being below normal.

In July, inflation based on the consumer price index, or retail inflation, increased to 7.96% from 7.46% in June because of higher food prices. Inflation based on the wholesale price index slowed to 5.19% in July, from 5.43% the previous month, mainly on account of lower fuel prices.

Food inflation continued to remain high at 8.43%, a marginal increase from 8.14% in June. The Narendra Modi-led government has already announced a 50% diesel subsidy to farmers to supplement irrigation to protect standing kharif crops in areas where rainfall deficit was more than 50% as of 15 July.

The annual report of RBI, released last week, said that in the face of a sub-normal monsoon, “food security management" will become a challenge. Although adequate stocks of wheat and rice are available to meet food requirements, it may prove a challenge to bring down price pressure on perishables like vegetables and fruits.

A drought may also hurt the agricultural loan book of banks. In case the government notifies a drought, banks may have to reschedule existing loans while at the same time provide fresh loans to ensure that next season’s sowing is not affected.

“While rainfall was great in the first few days of August, in the last 15 days rainfall has been missing in the core areas, which are central and north India," said G.P. Sharma, vice-president of meteorology at Skymet, a private weather forecaster.

“September will not be able to wipe out this seasonal deficiency as the normal rainfall for September is low and most of the rainfall is concentrated in July and August," he said. “This season will beyond doubt end with a drought. The question is will it be a mild drought or moderate drought."

Every month this monsoon season has produced deficient rainfall. June saw a 43% deficit, July recorded 10%, and August is, till now, at around 11%.

And heavy rainfall in some states tends to downplay the nationwide rainfall deficit, said Sharma.

Floods pushed by heavy rainfall have wreaked havoc in Assam, Odisha and Uttar Pradesh this month.

nikita.m@livemint.com

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Published: 27 Aug 2014, 11:52 PM IST
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