It’s a rather long expedition that nature undertakes each summer. Moisture-laden winds in the south-Pacific start racing northwards, preparing to travel more than 8,000 km to reach the Indian subcontinent on time. If the winds survive natural disruptions during its ocean journey, a hot Indian summer will turn them into a refreshing June-September monsoon. But the monsoon is more than just a cool respite. It is said to be the lifeblood of the economy. The rains are critical because two-thirds of Indians depend on a farm income and nearly 60% of India’s net-sown area does not have irrigation cover. India will be lucky if a fairly widespread drought doesn’t shrivel farm incomes this year, as the rains have been 18% deficient so far. The deficiency in June was higher at 33%. Naturally, a truant monsoon has sparked concerns, since its impacts ripple around the economy. Poor rainfall has shrunk the sowing of summer crops — accounting for half of India’s annual food output — by 7%.
Yet, this paper would like to point out that some old concerns associated with droughts may no longer be relevant. In the British colonial era, drought was a word for famines. The 1943 Bengal famine, following a missed monsoon, killed an estimated four million. In 2009, a drought year, the country managed to produce a million more tonne of foodgrains than it did in 2007, a normal year. This obviously has to do with better agricultural practices, leading to higher productivity. Moreover, there is no one-on-one correlation between high food inflation and droughts. There are inflationary spikes in perishables anyway, even in a normal year. Rather than food scarcity, droughts have become an issue of balance-of-payments crisis, power shortfall and water crises.
As far as farm incomes are concerned, the rains do matter. When agricultural output is robust and rural incomes rise, rural spending on almost everything, from television sets to gold, goes up. This creates demand for manufactured goods. For instance, 48% of all motorcycles and 44% of TV sets are sold in rural India. It is these inter-sectoral linkages between agriculture and industry that ultimately matter. Without rural demand, industrial growth itself tends to sputter. The real impact of a failed monsoon on agriculture today is on farm incomes through decreased yields. The government can prevent this by doubling down on India’s well-honed drought contingency plan customised for various agro-climatic conditions. The government would do well to focus on the plan’s implementation more than anything else.
{{/usCountry}}As far as farm incomes are concerned, the rains do matter. When agricultural output is robust and rural incomes rise, rural spending on almost everything, from television sets to gold, goes up. This creates demand for manufactured goods. For instance, 48% of all motorcycles and 44% of TV sets are sold in rural India. It is these inter-sectoral linkages between agriculture and industry that ultimately matter. Without rural demand, industrial growth itself tends to sputter. The real impact of a failed monsoon on agriculture today is on farm incomes through decreased yields. The government can prevent this by doubling down on India’s well-honed drought contingency plan customised for various agro-climatic conditions. The government would do well to focus on the plan’s implementation more than anything else.
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