Economic Advisor, IMC and IMC-ERTF Panel Discussion on Southwest Monsoon Outlook and Kharif Crop Prospects 2017 Mumbai. May 30, 2017 Theme Address G. Chandrashekhar Economic Advisor, IMC and Director, IMC-ERTF

2017 monsoon break !!

Why is agriculture critical? Contributes only 14-15% to GDP, but employs >50% of workforce Driver of rural incomes; critical for ‘growth with equity & inclusiveness’ SW monsoon driver of farm output (irrigated cultivation on only 40% of land)

Why is 2017 SW monsoon important? In 2014 and in 2015, India faced El Nino induced dry conditions; Lower crop size; widened demand-supply mismatch; Food inflation (moderated partly by low crude oil prices); fall in rural incomes; rural distress In 2016, near-normal monsoon; rebound in crop output; yet, growers distressed

2017 SW Monsoon – the forecast IMD and others have forecast ‘normal’ rainfall (LPA 880 mm) Has raised hopes of higher output second year in a row Spatial and temporal distribution of rainfall critical to boost Kharif crop prospects

Major Kharif Crops: Actual 2015 and 2016; Target 2017 (million tons) Crop 2015 2016 2017 Rice 91.4 96.1 ?? Maize 16.1 19.2 ?? Pulses 5.5 9.1 ?? Oilseeds 16.7 22.8 ?? Cotton * 30.0 32.6 ?? Sugarcane 348.4 306.0 ??

SW Monsoon status Government of India, Earth System Science Organization, Ministry of Earth Sciences, India Meteorological Department 25 May, 2017 Current Weather Status and Outlook for next two weeks Southwest Monsoon: On account of the formation of a low pressure area over southeast & adjoining central parts of Bay of Bengal, south westerlies are strengthening over the region. Hence, conditions are favourable for further advance of southwest monsoon over southern parts of Comorin area, some more parts of southwest, southeast & east central Bay of Bengal during next 24 hours. Forecast for 2017 Monsoon Onset over Kerala: Monsoon onset over Kerala in this year likely to be close to normal date. The southwest monsoon is likely to set over Kerala on 30th May with a model error of ± 4 days.

SW Monsoon 2017 : Status Set to hit Kerala coast usual date June 1 Robust onset and steady progress critical; July and August - months of heaviest rainfall El Nino scare discounted; yet, Agri Ministry has advised States to be vigilant, be ready with contingency plan

Any risk? Pity, no announcement of MSP and production target (till May 29) Disillusioned growers of pulses and oilseeds may shift to other crops Government should be ready with instruments of policy response (fiscal, monetary, trade, tariff, administrative) Agri trade should exercise caution

Thank You G. Chandrashekhar Economic Advisor, IMC and Director, IMC-ERTF Phone: 91 9821147594 email: gchandrashekhar@gmail.com