Assurance of a normal monsoon doesn’t decide agricultural performance anymore
Uncertainty grips the Indian agriculture economy as monsoon is about to enter the mainland by June 4, as per the India Meteorological Department (IMD) forecast. This is a delayed arrival. IMD has also said that the dreaded weather phenomenon El Nino would certainly set in and impact the monsoon in the second half (August-September).
But, IMD said, this monsoon will be a “normal” one. If it is so, India will have its fifth consecutive normal monsoon; and if El Nino makes an impact on the rainfall as per historical trend, this will be a deficit monsoon after four years.
Assurance of a normal monsoon doesn’t decide agricultural performance anymore. Its distribution as per normal pattern is what decides a farmer’s agricultural yield.
As seen in the past decade, erratic monsoon and long dry spells during the crucial second half of the cycle have damaged crops, brought down production and ultimately resulted in dipping income of farmers. But this season, farmers have additional unfavourable situations that hint of a major loss in agricultural operations. And this has a significant bearing on the national economy.
First, farmers and farm workers enter a new season (Kharif, which accounts for half of India’s food supply) without significant capital. Rural wage for the agriculture sector has not reported any growth when it is adjusted to retail inflation. The earning from the last season has not been a profitable one. An Indian farmer currently earns more from labour than crops.
To sum up, the capacity to invest in the new season is effectively nil. Anyway, farmers would sow, as this is the only dependable vocation available in face of low opportunity of non-farm works.
Second, in recent years farmers have been starting the crop cycle from July, as delayed monsoon and erratic progress in June has resulted in huge economic losses. But the El Nino impact would be felt starting August.
Erratic rainfall, longer dry spells and also overall deficit rainfall are the bench-marked impacts of El Nino. For farmers just beginning with the sowing, these would mean near total disruption of operation that would result in low crop yield. It might also lead to a large number of farmers abandoning farming for this season as well. In recent years, due to weather uncertainty, we have seen thousands of farmers simply not taking up farming.
Consulting agency ICRA recently said that due to on-setting El Nino the agricultural gross value added (GVA) growth in financial year 2023-24 will be just 2.5 per cent. According to provisional data of the Union Ministry of Statistics and Programme Implementation, the agri-GVA in 2022-23 was 4 per cent. Going by this data, agriculture sector growth played a defining role in the economic growth of the last financial year.
Private consumption accounts for nearly 60 per cent of India’s GDP, a significant part of it comes from the rural population which accounts for the country’s 65 per cent of population. Around 47 per cent people in the country depend on agriculture for livelihoods. So, a dip in this sector’s growth would mean income loss for a majority of India’s population. This will impact the level of private consumption that will result in the shrinking of the overall economy.
What does this uncertainty mean for the farmers? According to the National Statistical Office’s last survey in 2021, in the last decade the inflation-adjusted income growth rate of an agricultural household was 2.5 per cent. This survey also pointed out that income from cultivation accounts for just 38 per cent of income of such a household and livestock and daily wage account for the rest.
More to it, income from cultivation has been coming down over the decade. This season, if the agriculture sector takes another hit due to weather factors, a farmer’s income from crops will further dip. This means, to maintain the already low overall earning, a farmer will have to look for more non-farm wage jobs. But that is not in plenty supply. So for a farmer, the proverbial light at the end of the tunnel is always dim.
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