Dinesh Kamath's Editorial 'Can normal monsoon prevent income shocks for farmers?' that was published in Newsband

Can normal monsoon prevent income shocks for farmers?

The India Meteorological Department’s (IMD) has made a forecast of a third consecutive normal monsoon. It is too early to be factoring positive fallouts for the economy from the monsoon — be it from higher GDP growth, agricultural prosperity or the feel-good factor that propels rural consumption.

Even if this monsoon turns out to be normal, this is no guarantee of robust growth in the agriculture leg of GDP. It has become quite evident in recent years that a bountiful monsoon that leads to a bumper agri-output is a mixed blessing for farmers, though it tempers consumer price inflation. Unremunerative prices for wheat, oilseeds, pulses and vegetables have been at the centre-stage of farmers’ agitations in the last couple of years. As it is buoyant farm income that catalyses rural prosperity and spending, normal monsoons may not necessarily guarantee rural feel-good.

For the NDA, in its pre-poll year, the monsoon forecast may make for a tightrope walk between balancing the interests of inflation-afflicted consumers, and the income expectations of farmers who have been assured a 50 per cent profit over their costs. The Agriculture Ministry also needs to vastly improve its production forecasting skills, so that any policy can be taken in a planned and proactive manner, without causing income shocks to the farmer.

Feel-good factor for farmers plays out when monsoon translates into bumper agri produce, supported by remunerative prices. 50% profit over agri costs is not unachievable, if in between traders' profit spread is checked. Traders’ profits seem to be very high which needs to be effectively intervened if real benefits are to reach the farmers and consumers. The wholesale and retail trade in the country is so effectively structured and organised in such way so as to guarantee handsome to bountiful profits in all seasons by influencing the prices to their advantage. As direct marketing by farmers is beset with problems, a way out is to encourage big retail supermarkets to build more direct contact with farmers eliminating middle men to the least.

There was a time when co-operatives were used to hold the price line. Politics played havoc however to marginalise them.

However, the Application Laboratory of the Japanese national weather forecaster Jamstec is the latest to predict a ‘wetter-than-normal’ condition for India and Pakistan in terms of the expected seasonally averaged rainfall this summer. During its positive phase, the western basin of the Indian Ocean warms up relative to the East, and boosts a concurrent Indian monsoon. During a negative IOD, the East of the basin warms up but doesn’t help the monsoon. It starts around May or June, peaks in August-October and rapidly decays when the monsoon moves into the southern hemisphere.

The Japanese agency says North-West India alone would witness above normal temperatures in May. For the rest of the country it forecasts below normal temperatures ahead of the monsoon. May would also bring normal to excess showers for the South and slightly less for the North. June, the first monsoon month, is expected to be cooler than normal for most of the country. Rainfall during June would likely be above normal mostly except for parts of interior South Peninsula. Kerala and Tamil Nadu may fall under the less-than-normal rainfall category. In July, normally the rainiest month, the monsoon would be reasonably good for most parts of the country except in Rajasthan, Madhya Pradesh, Chhattisgarh, Uttar Pradesh and the North-East. Combined June-July-August outlook suggests heavy rain along the West Coast; a slight deficit in Haryana, Delhi, Uttar Pradesh, the East Coast and Karnataka. The North-Eastern States might witness a larger deficit. September-October-November will see normal to slightly above normal rain in the South Peninsula and East-Central India, indicating a reasonably good North-East monsoon.

But below normal rainfall is forecast during this three-month period for Jammu & Kashmir, Punjab, Haryana, Uttarakhand, West Madhya Pradesh, South Uttar Pradesh and Bihar.