There has been lot of hype around the EL Nino and the likely shortfall in rainfall in India this year. In my previous article I had pointed out that the two major indicators that impact monsoon rains in India i.e. Southern Oscillation Index (SOI) and Indian Ocean Dipole (IOD) had turned neutral to positive for the Indian Monsoons and do not indicate an EL Nino at this stage. As it turns out the shortfall in the monsoons in June is not due to El Nino but due to local factors.
Now to come to the impact of the monsoons on agricultural production. The good part is that there was so much noise around the El Nino that most farmers were already aware that rains might be late or deficient. As such plantations were delayed. The second and more important part is that except for West India the progress of the monsoons is reasonably fine. Moreover the shortfall of 42% in rains in June is not very significant as July and August rains are more important. Moreover statistical analysis of past data has revealed that whenever rainfall is deficient in June it is above average in July and August in 90% of such years. As such probability of above average rains over the next two months is quite high. So given that farmers delayed plantations and rains are most likely to recover we should have a reasonable agricultural season. There could be some shortfall due to reduction in yields but overall production should be good. This combined with proactive action by the government to prevent hoarding should keep food inflation under control. Let’s not forget that under the previous UPA government food inflation remained high despite excellent monsoons and agricultural production.
If we see the monthly average Long Period Average of monsoons in India the statistics are as follows
Month LPA (mm)
June 163.5
July 288.9
August 261.0
September 173.5
TOTAL 885
As such it is clear that June is the month of lowest precipitation and the following months are more important.
This is also empirically borne out by last year’s agricultural production data for the Kharif season where June saw very good & above average rains, however the monsoon continued to weaken mid July onwards and was below average in August and September. As such although the print figure of 106% of LPA was very good Agri Output was up just 0.9% as standing crops got damaged.
The important months are ahead of us. Rains have picked up quite a bit lately and given the historical statistics the probability of good rains going ahead are high & so is that of agricultural production. As such let’s not fear now but be hopeful of decent food grain production.