India’s monsoon rains, which run from June to September, so far are a fifth below average levels. Western India has been worst hit, with rains as much as 70 percent below average in some areas.
Farmers in and around Lasalgaon, a rural town in western India, are seeing brief drizzles each day instead of the usual hours of downpours. In Mumbai, the financial capital on the western coast, roads that usually flood this time of year, forcing the cancellation of business meetings, are open.
India’s government had predicted a normal rainy season, but this week it forecast that the overall monsoon would produce 92 percent of average rainfall, edging closer to the 90 percent mark that signals the first level of drought. More than half of India’s farmlands are not irrigated and rely wholly on rain. Skymet, a private weather forecaster, says there is a 60 percent chance of a drought.
A failed monsoon for one of the world’s biggest producers of grains and sugar could add to pressure on global food prices, with corn and soybean futures hitting record highs this month as the United States experiences its worst drought in 50 years. India’s poor rains likewise threaten yields of soybeans, corn, sugar cane and rice, monsoon-
dependent crops with long germination periods. India’s Agriculture Ministry recently said that rice planting was down by a 10th compared with this time last year, as farmers await rain.
India’s government says it has enough grain stored to feed its people if necessary, although distribution networks are weak.
Yet the main concern is that a poor monsoon — India relies on the monsoon for three-quarters of its annual rainfall — would exacerbate the country’s economic slowdown.
India’s economy grew by 5.3 percent between January and March, the slowest quarterly rate for seven years. Economists say such a rate, if sustained, cannot support the rapidly growing population of India, which is home to 1.2 billion people and is set to overtake China as the world’s most populous country by 2025.
“We are already fighting an economic slowdown, so the chance of a drought adds to the worry,” said Anubhuti Sahay, a senior economist at Standard Chartered Bank in India.
Homegrown and foreign companies alike have been hoping that rural consumers will offset falling sales in the cities this year. India’s farmers have been largely sheltered from the slowdown because of good monsoons and high government subsidies in recent years, as well as their low reliance on bank credit. Consumer goods companies have thus been racing to design low-wattage fans and humidity-resistant televisions for countryside customers.
“Over the last year, we have been doing a lot of research into these smaller towns to find out what these consumers want,” said Mahesh Krishnan, who heads the home appliances division at Samsung India.
But a poor monsoon could dash corporate India’s contingency plan. Weak rains can cut farmers’ spending for a whole year, denting sales of everything from shampoo to gold jewelry. Pawar, the farmer in Lasalgaon, who lives on a 10-acre site inherited from his father, said that he has enough savings for this year should most of his crops fail but that he and his family of five would have to live far more frugally.
India’s fractious coalition government, weighed down by infighting, corruption scandals and a slowing economy, also has much to lose. Prime Minister Manmohan Singh will have to bail out farmers should rains remain elusive. Agriculture contributes 17 percent to India’s gross domestic product but employs 60 percent of its population, making farmers a vital voting bloc. Any increase in food prices, which are already high because of a weak rupee, will further alienate rural and urban voters.
This week, Singh’s office announced a package of handouts that could be deployed if the monsoon continues to disappoint. The proposals include higher subsidies for pulses such as lentils and chickpeas, staples of the Indian diet, and an expansion of rural job-creation schemes.
The coming week will tell whether India experiences a drought this year, said Jatin Singh, Skymet’s founder.
“If July finishes still down by a fifth, then drought is imminent,” he said. “You would need a third more rains in August, which is unlikely.”
For now, Lasalgaon’s farmers watch the skies as anxiously as Mumbai’s traders watch the descending rupee.
Ajit Bhosale, who runs a fertilizer shop in Lasalgaon, said his sales are down by half compared to last July.
“Usually by this time it has already rained enough for us to know that our troubles are over,” he said, looking around the empty shop and at the light drizzle outside.