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Monsoon 2014: Challenges and Policy Responses for Indian Agribusiness

The Indian Merchants' Chamber hosted a panel discussion on June 26, 2014, focusing on the anticipated below-normal Southwest monsoon. With the India Meteorological Department predicting rainfall at 93% of Long Period Average (LPA), the implications for agriculture, which supports 53% of the workforce and constitutes 15% of GDP, are significant. The discussion addressed the looming threat of El Niño, its uncertain timing, and effects on crop planting and harvests. Key policy responses were deliberated, including fiscal, monetary, and administrative measures to mitigate potential impacts.

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Monsoon 2014: Challenges and Policy Responses for Indian Agribusiness

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  1. Indian Merchants’ Chamber Panel discussion on: Monsoon 2014 and Effective Policy ResponseMumbai. June 26, 2014. Theme Address / Opening Remarks G. Chandrashekhar Chairman, IMC Committee for Agribusiness, Food Processing and Commodities

  2. Background • IMD has forecast below-normal Southwest monsoon 2014 • Southwest monsoon in 2014 for whole country (June-September) likely to be below normal (90-96% of LPA) • Quantitatively, monsoon season rainfall for the country as a whole is likely to be 93% of LPA with model error of ±4% • Region-wise, season rainfall likely to be 85% of LPA over North-West India, 94% of LPA over Central India, 93% of LPA over South Peninsula and 99% of LPA over North-East India, all with a model error of ± 8 % • Monthly rainfall over the country as whole likely to be 93% of its LPA during July and 96% of LPA during August, both with a model error of ± 9 %.

  3. Looming threat of El Nino • Indications of developing El Nino – dry conditions across South Asia and Southeast Asia • El Nino likely to strike in H2 2014; but timing and intensity uncertain • When El Nino hits Asia, North America usually enjoys good spring crops (grains, oilseeds)

  4. INDIA: what’s in store? • As of June 26, monsoon onset delayed and weak; movement stalled near southeast coast; central and western parts are dry; • June accounts for 15% of total rains; yet, delay has set off alarm bells; crop plantings lagging markedly;

  5. INDIA: What’s in store? • Effect on crop harvests, people, policies, politics . . . . . • Agri: 15% of GDP shared by 53% of workforce; where’s the equity? • Instruments of policy response: Fiscal, Monetary, Trade, Tariff, Administrative; • Any +ve role private enterprise can play?

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