El Nino doesn’t always cause drought, reveals Icrier study

NEW DELHI: Amid concerns of deficient rains this monsoon, a new study has shown that since 1980, all El Nino years have not resulted in a drought, although all droughts have happened in years of El Nino. In the last 34 years, there were six droughts in El Nino years, while there were six other years that did not convert into droughts, Icrier's Ashok Gulati and Shweta Saini said in a yet-to-be released study. The analysis will offer comfort to those wary of the adverse effects of weak rains on an already struggling economy.

Although the economists said that farm GDP falls 0.35% with every 1% deficiency from the average rainfall, they added that there is no reason to panic as their model does not point to a very high probability of a drought this year. Several other economists have said that a weak monsoon will only have a moderate impact.

The Icrier study pointed out that in 2000, 2005 and 2009, agriculture GDP rose despite rains being significantly below average. But the study did suggest that the government would do well by preparing in advance. On the positive side, Gulati, who recently stepped down as the chairman of the Commission for Agricultural Costs and Prices, and Saini said that there was sufficient water level in reservoirs and ample foodgrain stock in godowns. The stock of wheat and rice for instance is estimated at over 53 million tones, which is two-and-a-half times the buffer requirement.

Similarly, 85 major reservoirs have more than double the storage level compared to last year or average for last 10 years. Himachal Pradesh, Punjab, Rajasthan, Odisha, West Bengal, Gujarat, Maharashtra, Uttar Pradesh, Uttarakhand, Madhya Pradesh, Chhattisgarh, Karnataka, Kerala, and Tamil Nadu have better storage today than last year, it said.

In terms of preparation, economists suggested that the government should either expand the farm insurance cover or put in place a contingency reserve of Rs 5,000 crore.

"Although at the All-India level a declaration of drought requires more than 10% deficiency compared to LPA (long period average), agricultural production can get impacted significantly even if the overall deficiency is, say, 5-9% over LPA, depending upon the spatial spread of rains," the report said.