Photographer: Prashanth Vishwanathan/Bloomberg

Monsoon’s Delay Has Indian Farmers on Edge After Two Droughts

  • Farmers need rain immediately to ease acute water shortage
  • Monsoon to arrive one week late, may be above average in 2016

Time is running out for the 70 acres of sugar cane and fruit that Balasaheb Pandharinath Shende farms in India’s Maharashtra state. After two years of drought, his fields are parched and his wells have dried up.

Monsoon rains that usually arrive this time of year should help, but the government says they will be at least a week later than normal. That has some growers worried, even though the India Meteorological Department forecasts the rainy season will eventually produce above-normal moisture for the first time since 2013.

“We need rains as soon as possible as the water shortage is acute,” said Shende. “If it doesn’t rain in the next 15 days there will be severe damage to my partially-dried sugar cane crop.”

India is counting on a return to normal rainfall to boost crop production, help keep food prices in check and ease a drinking-water shortage caused by the first back-to-back monsoon shortfall in three decades. The monsoon waters about half of India’s crops, and agriculture accounts for about 18 percent of the economy. More than 800 million people live in villages and depend on farming.

The season usually starts on June 1 and lasts into September. This year, it probably won’t start until June 7, the meteorological department says. But once it arrives, total rainfall will be 106 percent of the 50-year average of 89 centimeters (35 inches), according to the government. Skymet Weather Services Pvt., a New Delhi-based private forecaster, expects the season to start in the next few days and may be 109 percent of the average, bringing the most rain since 1994.

Last year’s monsoon rainfall was 14 percent below average after a 12 percent shortfall in 2014, data from the weather bureau show. Maharashtra along with Uttar Pradesh, Bihar, Chhattisgarh, Madhya Pradesh, Karnataka, Telangana, Odisha and West Bengal all declared droughts in 2015.

Rain Boost

Production of crops including rice, corn, sugar cane and oilseeds fell last year, increasing the cost of food in Asia’s third-largest economy. Sugar production will probably drop to a seven-year low of 23.5 million tons in the year beginning Oct. 1 due to dry conditions, according to a Bloomberg News survey in April.

“Even if the onset is delayed, it can later pick up and cover the country very well on time,” Prerana Desai, vice president for research at Edelweiss Agri Services & Credit, said by phone from Mumbai on Monday. “An improvement in farm incomes will definitely help boost the economy as a whole.”

Indian central bank Governor Raghuram Rajan said in May that expectations a good monsoon will boost food production may help temper inflation after a jump in April. Higher agricultural output may also be a political boon for Prime Minister Narendra Modi, who has sought to counter rising discontent in villages ahead of key state elections with a pledge to double farmer incomes by 2022.

The area planted with monsoon-sown food-grain crops is set to increase by as much as 20 percent, boosting production to around 129 million tons to 130 million tons this year, according to Skymet. That compares with 124 million tons in 2015, according to farm ministry data. Soybean, peanut and pulses plantings may climb, while cotton area will probably decline marginally and sugar cane may remain the same, the forecaster said.

“After two deficient seasons we have to keep our fingers crossed for actual rainfall,” said Veeresh Hiremath, head of research at Hyderabad-based Karvy Comtrade Ltd. “Distribution and progress of rain will be important.”

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE