A fifth consecutive deficit monsoon will be devastating

A few years ago, the financial press was replete with claims that monsoons are not important to the Indian economy. These claims are less audible after four successive deficit monsoons. The first stage of the Indian Metrological Department’s (IMD) long-range forecast for 2019 monsoon was greeted with a premature sigh of relief. It forecast that the rainfall for June to September is likely to be 96% of the Long Period Average (LPA) — which is 89 centimetres. The LPA is from 1951-2000. A more sober indication is that the IMD’s forecast points to a 49% probability of the rainfall range being 96%, a 39% probability of it being 96-104% of LPA, a 10% probability that it will be 104-110% of LPA and just a 2% chance of excess rainfall.

Averages are often deceptive since they hide the wide variation in the monsoon distribution. The worry is compounded when we consider the diversity, size of the country, variations in geography and rainfall distribution. A fact not to be missed is that India had to grapple with 13 deficit monsoons in the past 18 years. After four successive deficit monsoons and droughts, we do not need a large deficit in rainfall for it to have the same impact as a drought. An unevenly distributed monsoon with a small departure from the forecast can have a devastating impact on rural India.

The importance of the monsoons is underscored by the well-known fact that about 75% of India’s rainfall occurs during the South-West Monsoon (June–September). On an average, about 58% of the ground water resources — 70% in the case of a few states — are recharged due to the monsoon. A deficit monsoon, especially a widely distributed deficit across districts, can wreak havoc on the socio-economic lives of rural India. Monsoons, or more precisely water, is central to large parts of the rural economy. This dependence is in the form of agriculture, livestock and drinking water needs.

The problem is magnified due to the increased tendency of governments to invest in huge irrigation projects while ignoring localised solutions spread across lakhs of villages. This lack of storage is acutely felt because the number of days that it rains has steadily declined while the rainfall received on rainy days has increased. This gives a semblance of sufficiency on an average basis. Unfortunately, agricultural operations benefit from rainfall that is evenly distributed. The net result of this erratic monsoon behaviour is that while the demand for water is exploding, the supply may be drying up at an alarming pace.

A problem with our policy response is that despite the increased frequency of droughts, the central and state governments do not seem to be interested in long-term, localised and viable solutions. This is worrisome, considering that a large part of Indian agriculture is still monsoon dependent. Statistics indicate that canals provide water only to about 16.3 million hectares out of the net irrigated area of 68.1 million hectares. In contrast tanks, tube-wells and other wells irrigate about 43.3 million hectares. It is safe to assume that a large number, if not all of these, are in rain-fed areas.

A scenario that plays out every summer, including the present one, is the sharp jump in investment in drilling borewells due to depleting groundwater level. In most parts of the country, in less than a decade, there is a need to reach double the depths to tap groundwater. An immediate consequence of a poor monsoon will be the huge increase in pressure on not only the recharge of groundwater but also due to increased withdrawal. The Central Ground Water Board estimates that 90% of the groundwater drawn is for irrigation.

Any deficit monsoon aggravates the downward spiral, thereby resulting in reduced incomes and increased expenditure. Livestock is the first to be affected by water shortages. A drought will invariably lead to a sharp increase in the cost of fodder and will only increase the pressure on the precarious water supply mechanisms (natural or otherwise) in the rural areas.

Farmers’ incomes

Monsoons have a major impact on yields, thereby affecting incomes of farmers. Official data indicates that during 2002 drought, rice yields fell from 2,079 kg per hectare to 1,744 kg — a 16% drop. The average in the case of other food grains was about 12%. In the case of 2009 drought, the decline in yields for food grains was about 6%.

One aspect that is often overlooked is the impact they have on the ability of farmers to repay their debts. Four successive deficit monsoons and lack of remunerative prices have led to a sharp increase in debt in the rural areas. RBI data indicates total credit advanced by the banks in rural areas increased to Rs 7.23 lakh crore at the end of March 2018 from Rs 5.98 lakh crore in March 2015.

Formal sector debt is at best a partial picture, since most rural households supplement formal sector debts with borrowings from the informal sector. The behavioural pattern of rural households combined with these formal sector debt statistics should make policymakers weary of yet another deficit monsoon.

Rural households tend to follow two major strategies for their investments in livestock. The more prosperous ones tend to use distress sales during peak summer while the rest tend to buy after the first burst of rains in June-July in the belief that monsoons will pan out as per their hopes. Any subsequent failure or reduced rain tends to have an impact on fodder availability.

This means that unless there is a dramatic rise in price of output, the margins will be squeezed, thereby compounding the pressure created by increased indebtedness. These problems often lead to the perception among rural households, especially the poorer ones, that distress migration is the only solution to improve their livelihoods. That sets off yet another complex and vicious cycle.

(The writer is an independent researcher based in Andhra Pradesh)