In India's grain bowl, recent rains ease weak monsoon worries

Reuters News
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Posted: May 01, 2015 6:50 AM

By Ratnajyoti Dutta

NEW DELHI (Reuters) - Recent unseasonal rainfall in India has come as a blessing for some farmers as it has replenished reservoirs in parts of the country, allaying concerns stemming from forecasts for a weak summer monsoon this year.

High water levels should also help ease the pain for Prime Minister Narendra Modi's government which is struggling to address rural distress after the unseasonal rains damaged winter crops like wheat, rapeseed and potato.

But these rains have driven up reservoir levels in paddy-growing states of Punjab and Himachal Pradesh, the country's grain bowl in the north, to higher than both a year ago and the average of the past decade, government data showed on Friday.

"This is a case of cold comfort, but the excessive rainfall that we have witnessed in the past six weeks have replenished reservoirs which would help mitigate the impact of deficient monsoon rains," said Aditi Nayar, senior economist at ICRA, the Indian arm of ratings agency Moody's.

India is expected to see below-average rains this year as the emergence of an El Nino weather pattern will likely cause dry spells across South Asia.

The monsoons are vital for India as its farm sector accounts for 14 percent of its economy, and half of its farm land lacks irrigation. Weak rains have cut farm output in the past, stoking food price inflation in the country.

But this year, there is unlikely to be a big shortage even if monsoons turn out to be weak as the government storehouses are brimming with rice and wheat.

However, for millions of farmers, the fate of a single crop can be the difference between life and death.

Dozens of farmers have committed suicide after the damage from unseasonal rains, denting Modi's popularity in the countryside and presenting an opportunity to the opposition Congress party to tap into farmers' anger ahead of elections in the agrarian state of Bihar later this year.

Another area of concern for the government is the likely deficit of edible oils derived from soybean, which is grown mainly in the central state of Madhya Pradesh where reservoir levels have fallen below last year's levels.

India imports about 60 percent of its edible oil needs at an annual cost of up to $10 billion - its third-biggest import item after crude oil and gold.

"India is all set to import more edible oil and pulses, though a clear picture will emerge once monsoon covers the entire country," said P. Chengal Reddy, secretary general of the Consortium of Indian Farmers Associations.

(Writing by Krishna N. Das; Editing by Himani Sarkar)