Vulnerability of agriculture to monsoon shock has reduced: India Ratings

New Delhi [India], April 28 : India Ratings and Research (Ind-Ra) on Friday said it believes the resilience of Indian agriculture towards adverse weather shocks has undoubtedly increased over the years, owing to increased irrigation intensity. However, the ability of the sector to absorb the shock varies across states is linked to the overall area under irrigation.
According to India Ratings, at the all-India level, the area under irrigation was 54.32 per cent in 2018-19 (FY19) compared with 41.7 per cent in 1996-97. As a result, the correlation between the kharif foodgrain output and monsoon rains from June till September was 0.4 over FY13-FY21 compared with 0.6 and 0.8 during FY97-FY04 and FY05-FY12, respectively.
However, India Ratings said the correlation varies across regions with both -- the area sown and the foodgrain output. "A glance at the region-wise correlation for the entire period during FY97-FY21 or any truncated period in between suggests that south peninsular India is more vulnerable to a shortfall in monsoon rains than any other region in terms of both - the area sown and the food grain output," it added.
Interestingly, central India (CI), which was more vulnerable during FY05-FY12, became less susceptible to monsoon rainfall during FY13-FY21, India Ratings said.
It said one of the probable reasons could be the expansion of irrigated area in this region. "While the irrigated area in Madhya Pradesh increased to 61.6 per cent in FY19 from 40.1 per cent in FY05, during the same period irrigated area increased to 33 per cent in Rajasthan and 51 per cent in Gujarat from 23.4 per cent and 33 per cent, respectively," India Ratings said.
The negative correlation between monsoon rainfall and kharif acreage or output shows the adverse impact of heavy rainfall, which often leads to floods and the destruction of crops. While this situation could arise in any part of the country, it was pronounced in Northeast India (NEI), with respect to the output during FY97-FY04 and in CI with respect to the area during FY13-FY21.
Ind-Ra believes another factor that has lessened the adverse impact of the deficient monsoon on India's agriculture is the increase in the rabi crop output. Historically, agriculture production used to be higher in the kharif season than in the rabi season.
India Ratings said, "However, rabi food grain output/production over the past several years has been mostly either at par or higher (consistently during FY18 to FY22) than kharif production."
According to the forecast of the Indian Meteorological Department (IMD), the monsoon rainfall in 2023 is likely to be 4 per cent lower than the long-period average (LPA). The shortfall in monsoon rainfall is attributed to the El Nino conditions that are likely to develop during the monsoon season.
Chances of low rainfall undeniably increase in an El Nino year, but Ind-Ra believes there is no one-to-one correspondence between the emergence of El Nino and deficient monsoon rainfall in India. An emergence of El Nino does not necessarily mean a significant drop in rainfall and/or drought.
"Ten out of the 33 years ranging from 1990-2022 were classified as El Nino years of variable intensity. However, India experienced rainfall deficiency of over 5 per cent in seven of these 10 years and only five of these seven years were classified as drought years," India Ratings.
Monsoon rainfall is a complex phenomenon and its performance over India is influenced by a number of factors which included El Nino/La-Nina, the state of the Indian Ocean Dipole (IOD), the Tropical Atlantic SST and Eurasian land heating.
"If the IOD value remains at or above the threshold of 0.4, it creates favourable conditions for the monsoon rainfall. Currently, neutral IOD conditions are present over the Indian Ocean, but the IMD expects positive IOD conditions to develop during the 2023 southwest monsoon season. If this happens, there is still a fair chance of limiting the downside arising out of El Nino on monsoon rainfall in 2023," India Ratings added.