El Nino worries

El Nino is expected to hit in the second half of the monsoon period, but whether it will cause a drought is still not certain. While consumers may be spared because of the strong foodgrain buffer position, a deficient rainfall will affect farmers.

In Thrissur, Kerala, a farmer prepares his paddy field before the arrival of the monsoon.

AS reports of the chances of El Nino developing this year gain ground, countries across the world prepare to brace for the impact of the phenomenon that originates from the Pacific Ocean. Typically, abnormal warming of ocean currents in the Pacific leads to excessive rains in the southern United States and South America while adversely affecting rainfall in India, South-East Asia and eastern Australia.

Scientists are yet to figure out the reasons for the irregular heating of these water currents. The pressure reversals between the eastern and western Pacific are mostly simultaneous. It is called El Nino/Southern Oscillation, or ENSO, and it is said that South American fishermen gave it the name El Nino, which means “the boy” in Spanish or more specifically “the Christ Child, or Jesus,” because it occurs around Christmas time.

The fear generated by reports of a developing El Nino event is keeping weather watchers in India on the tenterhooks as it is feared that it may lead to a drought here, like in 2002, when it coincided with a strong El Nino. With the onset of the monsoon over a narrow patch on the western coast of India, the sowing season is expected to be in full swing by July.

Since February, many global weather agencies have warned of an El Nino event developing early, but there is no confirmation on when and whether there will be a full-fledged El Nino. Asian Development Outlook 2014, brought out by the Manila-based Asian Development Bank (ADB), states that a monsoon disrupted by El Nino could fuel food inflation in India. A favourable monsoon is assumed to help agriculture grow at close to its trend rate of 3 per cent, but even a weak El Nino could reduce rainfall in India and suppress agriculture growth, according to it.

The U.S.’ Climate Prediction Centre forecast a 70 per cent chance of El Nino during the northern hemisphere summer and an 80 per cent chance during the fall and winter. This is consistent with the projections of most other official forecasters. While Indian weather agencies are forecasting subnormal rainfall, they are not predicting a drought yet. For the country as a whole, the India Meteorological Department (IMD) data show that cumulative rainfall during this year’s monsoon until June 25 was 40 per cent below the Long Period Average (LPA).

The cumulative seasonal rainfall activity was deficient to scanty over all the homogeneous regions of India, ranging from 28 per cent below LPA in south peninsular India to 57 per cent below LPA in central India. Whether this is an El Nino effect or not is not very clear. But even after discounting El Nino’s impact, it looks like India may have a shortfall in rains this year.

In its June 25 update, the IMD’s extended range forecast from June 26 to July 15 is: normal to above normal rainfall activity over the north-eastern States and West Bengal and Sikkim on many days; a likely revival of the monsoon over many parts of eastern, adjoining central and north peninsular India from July 6 onwards when above normal rainfall activity is expected; on the west coast, above normal rainfall activity from the beginning of July; and below normal rainfall over the western parts of the country during the period. El Nino is generally known to return at an interval of three to five years—the last one being in 2009—and this indicates a possible drought in 2014, with its effects more pronounced towards August in areas potentially receiving less than 10 per cent rainfall. For India, that coincides with the second half of the southwest monsoon season from June to September.

Still, it is difficult to say whether India will have a drought year. A study of the past three decades shows that all six droughts were in El Nino years—1982, 1986, 1987, 2002, 2004 and 2009. But the reverse, every El Nino year being a drought year, is not true. For instance, in 1994 (a “moderate” El Nino year) and 1997 (a “strong” El Nino year), the country registered above normal monsoon precipitation. Rainfall was more or less the same in 2006 (a “weak” El Nino year), too.

The IMD and the private forecaster Skymet Weather Services concur that El Nino may hit India in the second half of the monsoon period. But whether it will cause a drought is still not certain. Therefore, monitoring these developments in the coming months becomes very crucial.

Drought and El Nino

A working paper by the Indian Council for Research on International Economic Relations (ICRIER), “El Nino and Indian droughts: A Scoping Exercise” by Shweta Saini, a consultant, and Ashok Gulati, a chair professor for Agriculture at the ICRIER, supports this rationale. In the past 14 years, of the four El Nino years globally, three resulted in Indian droughts.

“Looking at the relation between El Nino and Indian droughts since 1950, it is observed that India faced 13 droughts, and 10 of these were in El Nino years and one in a La Nina [opposite of El Nino] year. This indicates that there may not be a one-to-one correspondence between El Nino and Indian droughts. However, it may be worth noting that since 1980, all the six droughts faced by India were in El Nino years but still not all El Nino years led to drought in the country. But this relation appears to have strengthened in the 21st century. In the last 14 years, e.g., out of the four El Nino years globally, three resulted in Indian droughts,” states the paper.

Wildly unusual weather

In 1982-83, El Nino caused wildly unusual weather in the U.S. throughout the year, including severe winter storms in south California, widespread flooding across the South, and unusually mild winter weather in the central and northern parts of the country. It resulted in failed fishing harvests in Peru and Ecuador and drought in the Western Pacific region, and led to disastrous forest fires in Indonesia and Australia. The overall loss to the world economy was over $8 billion. In a similar event in 1997-98, which was the worst El Nino year in history, there was an estimated global loss of $25-33 billion, and as according to a study by the University of New South Wales, it claimed 23,000 lives.

Dr J.S. Sandhu, Agriculture Commissioner, Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, dismisses reports of a drought this year and says there is no need for unnecessary panic. He is of the opinion that if at all El Nino hits, it will hit in the second half of the monsoon or by September end, by when it cannot have a devastating effect on agriculture.

“As yet, there is no prediction by the IMD on September rainfall. In June and July, we do not foresee any effect. It is to be noted that the IMD is only predicting less rainfall—that does not translate into a drought, and with our water reservoir levels, we shall be able to mitigate the situation,” he said. As on June 12 this year, the national mean of 85 reservoirs stood at 39.32 billion cubic metres as against 31.225 bcm during the same time last year. The 10-year average stands at 26.064 bcm. “Besides, States such as Rajasthan, Punjab, Haryana, Uttar Pradesh, Himachal Pradesh, Uttarakhand and the Union Territories of Delhi and Chandigarh, which are expected to have less than normal rainfall, have relatively better irrigation resources, and with better technology at our disposal now, we can handle these situations,” he added.

An Associated Chamber of Commerce and Industry of India paper, “India’s likely tryst with Edible Oil: Impact of El Nino factor”, states that India’s import bill on account of edible oils is likely to shoot up to $14 billion in the current financial year from $9.3 billion in 2013-14 as production of oilseeds will be affected to an extent of at least 8-10 per cent by deficient monsoon rains.

“As per the initial indications, the rainfall in the edible-oil-growing States of Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Karnataka, Tamil Nadu, West Bengal and Andhra Pradesh would be deficient due to El Nino factor hitting the output which in turn will result in higher import dependence on the edible oil,” according to the paper.

Foodgrain position

Historically, it is seen that deficient rainfall affects the production of foodgrains in the country, and in such a situation, the government would be well advised to prepare contingency measures. According to the Department of Agriculture & Cooperation’s third advance estimates of production of foodgrains for 2013-14, as on May 2014, the total foodgrain production was 264.38 million tonnes (m.t.), exceeding the target of 259 m.t. It is to be noted that 2013 was not a drought year. The production in 2009, the last drought year, stood at 218.11 m.t., down from the previous year’s 234.47 m.t. Similarly, production in the drought year 2004 fell to 198.36 m.t. from the previous year’s 213.19 m.t., and in 2002 it came down to 174.77 m.t. from the previous year’s 212.85 m.t. This means that if El Nino does make its presence felt this year, then foodgrain production will be hit and that will affect farmers. In order to mitigate such an impact on farmers, the ICRIER paper suggests the creation of a dedicated fund of Rs.5,000 crore towards insurance/income stabilisation of farmers likely to be hit by drought. For the long run, it suggests investments in agriculture, mainly in irrigation.

“For the consumers, in the short run, government can liquidate the excessive buffer stocks of grains in the open market, cut down import tariffs on fruits and vegetables, skimmed milk powder, and chicken legs, etc., to contain potential abnormal price increases, in case it turns out to be a drought year. In the medium to long run, building more efficient value chains for perishables is the way to go. Also, by reorienting MGNREGA [Mahatma Gandhi National Rural Employment Guarantee Act] towards recharging groundwater, and/or rejuvenating forests, improving farm practices, etc., Indian agriculture can be made more resilient to face El Nino and droughts,” the paper states.

Consumers are unlikely to bear the brunt of an El Nino event or a weak monsoon as the government has sufficient stock of foodgrains at its disposal. So far, prices of foodgrains have been stable as compared to last year, but the same cannot be said of vegetables and fruits. According to the price report of the Department of Consumer Affairs, as on June 16, the price of a kilogram of onion in Delhi stood at Rs.23 against Rs.20 last year, potato was Rs.24 (Rs.18), a litre of milk Rs.38 (Rs.32), a kilo of sugar Rs.38 (Rs.37), urad dal Rs.74 (Rs.69), rice Rs.29 (Rs.28), wheat Rs.20 (Rs.18), and moong dal Rs.91 (Rs.83). Prices of certain commodities have, in fact, fallen: chana dal Rs.49 (Rs.56), arhar Rs.73 (Rs.78), groundnut oil Rs.157 (Rs.162) and tomato Rs.14 (Rs.18).

So, while consumers may or may not be affected much, the farmer is in for a tough time. With or without El Nino, the monsoon does not look promising and food inflation remains a major concern for the economy. It is incumbent upon the policymakers to prepare in advance for any exigencies. In any case, El Nino should not be an excuse for the government to push prices up further.