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Indian farmers anxious about patchy monsoon rains

Atul Prakash in Mumbai

India's four-month southwest monsoon, the lifeline of agriculture and the economy, has turned into a nightmare as patchy rainfall in many parts of the country raises the spectre of drought after over a decade.

Good rains are crucial in India, driving rural consumption and demand for industrial products. More than 70 per cent of the billion-plus population earn their living from agriculture, which accounts for a quarter of gross domestic product.

Only a third of India's arable land is irrigated.

"Crops like coarse cereals, oilseeds and grains have been damaged. Even if the rains come now, productivity will suffer," a senior agriculture ministry official said.

The June-September monsoon rains have so far been deficient or scanty in 22 of 36 meteorological divisions, mainly in the central, western and some southern parts of the country, weather officials say. They see little chance of an improvement in drought-hit areas over the next few days.

The agriculture ministry says rainfall across India has averaged 25.03 centimetres this monsoon, compared with an average of 33.32 centimetres last year.

Analysts said a drop in agricultural output could lead to a significant rise in imports of farm commodities such as edible oils and cotton. It would also hurt economic growth and curtail rural spending.

"The drought-like condition is fairly broad-based and there could be a substantial contraction in rural incomes," said Abusaleh Shariff, chief economist at the National Council of Applied Economic Research.

NO FOOD SHORTAGES

But there are no threats of famine or food shortages, last seen in the 1950s, thanks to adequate food stocks.

India's grain stocks totalled 65 million tonnes as at June 1, more than 30 per cent its annual output. It also has about 18 million tonnes of sugar, slightly above its annual output.

A fall in oilseeds output would lead to more imports of edible oils and firmer global and domestic prices.

India, the world's largest edible oil importer, purchases almost half its requirement from countries such as Malaysia, Indonesia, Brazil, Argentina and the United States.

Edible oil imports for 2001-02 (November-October) are estimated at 4.3 million tonnes, down from 4.8 million a year ago.

Analysts say India has enough foreign exchange reserves to pay for more edible oil imports and global supplies are adequate.

But they say lower farm output would mean less disposable income for farmers, affecting demand for consumer goods, cement and cars. The rural segment accounts for 35-50 per cent of the market for several key consumer goods.

In 2001-02 (April-March), the farm sector bounced sharply from two years of anaemic growth to expand 5.7 per cent, pushing the economy out of a two-year slowdown with growth of an estimated 5.4 per cent, compared with 4.0 per cent in 2000-01.

"As of now, I think farm growth will be minus one to two percent this year," said Abhijit Sen, a professor at the New Delhi-based Jawaharlal Nehru University.

As a result, GDP growth could slip to 5.1 per cent in the current year against a forecast of 6.0-6.5 per cent.

Analysts said farm output could also be hit in the summer as water reservoirs were down and rivers receded. This would lead to a lack of soil moisture for the summer sowing season in November and December.

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