Weather watchers around the world are abuzz with the possibility of a strong El Nio in 2014something akin to the monstrous one in 1997, the worst recorded so far, which played havoc in many parts of the world. Estimates of economic losses from the 1997 El Nio vary widely, but one such estimate by the University of New South Wales puts it around $35 billion, besides the loss of 23,000 human lives.
In India, El Nio is generally feared to be causing droughts. For example, in 2002, there was El Nio and India had more than 19% deficient rainfallbelow Long Period Average (LPA)resulting in a severe drought. While the foodgrain production tumbled by 18% (38.1 million tonnes), the overall agri-GDP dropped by about 7%, implying a loss of more than $8 billion (2004-05 prices). Such a drop in food production can set food prices soaring, and given that food inflation in India is already at uncomfortably high levels, this can send shivers down the spine of many people and policy makers. Yet, it is worth remembering that India had escaped the worst El Nio till date (1997) without a scratch!
So, what is the relation between El Nio and droughts, and what is their probability of coinciding in India this year This is the key question that policy makers and traders are interested in as it has huge implications for the economy, especially food prices and agri-trade. In the worst case scenario, this may turn out to be the toughest test for the incoming government after the elections, forcing it to hit the ground running!
What is El Nio
Very briefly and in a lay mans language, El Nio refers to the changes in the world climate triggered by rising sea surface temperatures in the Pacific Ocean. These temperature deviations, measured from an average temperature during 1971-2000, are called sea-surface temperature anomalies (SSTA) and are captured as three months moving averages in the Oceanic Nio Index (ONI). When this ONI crosses +0.5 (-0.5) degrees Celsius for five consecutive time periods in a year, the year is declared as El Nio (La Nia) year. Weather scientists are continuously trying to establish the relation of such climatic changes to direction and speed of winds, and consequent storms, droughts and floods in different parts of the world. The effort is to forecast extreme climatic events well in time to minimise losses and human suffering. The scientific community still does not have a full grip on the causes and its interactions with other variables, and therefore an element of uncertainty and surprise always remains.
El Nio and Indian droughts
A drought in India is defined as the June-September rainfall falling by 10% or more from its long period average (LPA) (89 cm). If one compares the data on global El Nio years and Indian droughts since 1950, one finds that overall there were 23 El Nio years, but there were only 13 years when India faced drought and one year, 1991, was very close to it with 9.3% fall in rainfall from the LPA. That clearly indicates that every El Nio year globally did not result in a drought in India. And interestingly, the years 1966, 1974 and 1979, were not El-Nio but turned out to be years of severe droughts in India.
However, if one looked at the same data from 1980 onwards, one finds that there were 12 El Nio years globally but only 6 resulted in droughts in India, with 1991 being a borderline case. Interestingly, during this period, all drought years were El Nio years, but not all El Nio were drought years, as the accompanying graph shows.
This led us to dig a little deeper with a view to have a better mapping of El Nio and Indian droughts. Our hypothesis was that for any year, not all the 12 readings of ONI would be of importance to our June-September monsoon rainsof the three-monthly-moving-averages, the October-November-December to Feb-March-April readings may not have much impact on the Indian monsoons. So, if one looks at ONI data more relevant for India, say, from April-May-June to September-October-November, from 1980 onwards, one finds that there were only 7 El Nio years, not 12 as was found by the global El Nio watch. Of these 7 El Nios, 5 converted to Indian droughts (1997 El Nio did not imply Indian drought and 1991 being a borderline year). So, may be the temperature changes of this period could explain better the relationship of El Nio with Indian droughts.
However, such narrowed mapping also runs the risk of missing out the 1986 El Nio and drought, with sea temperature warming visible only after September that year. Suffice to say that, so far, there is no one-to-one correspondence between El Nio globally, or one that could be tailored specifically for India, and Indian droughts.
Nevertheless, when one looks comparatively at shorter-period values of ONI changes, the chances of predicting an India-relevant El Nio is greater. Since 2000, there were four El Nio years globally and three India-relevant ones and all three resulted in Indian droughts. So, there is a lesson for policy makers: dont be caught unaware! Better be on the alert, monitor the sea-surface temperatures more closely, and prepare well in advance for any exigency.
Skymet has forecast 25% probability of drought and 40% probability of below normal rainfall (94% of LPA) in 2014. Skymet has also indicated that north-west India and western India may face a drought-like situation. IMD forecast is awaited.
In case of a drought
At the moment, weather conditions dont point to a very high probability of a drought, so there is no need to panic. But looking at the frequency of droughts in India since 1980, almost every fifth year has been a drought, and the last drought India had was in 2009. So, purely from statistical analysis, 2014 could be a drought. Looking at the somewhat freaky weather already, when it is raining at harvest time, it does not give the comfort of a normal rainfall year. So, wisdom lies in preparing well in advance in case of an exigency.
From that viewpoint, the north-west India being a more irrigated belt, can stand the pressure of a drought better than western India which is much more rain-fed. North-west is also cereal belt, and we have ample stocks of wheat and rice in FCI godowns. But with western
India being an oilseeds, pulses, and cotton belt, there could be pressures on their prices. Open imports policy already exist, and let traders do their guessing and business. They may import these commodities in large quantities and this will help automatically stabilise Indian prices at global levels. Cotton may have a little set back in exports.
But what about farmers One needs to expand insurance cover to them, or have an insurance/income stabilisation fund (say of R5,000 crore) to take care of any such exigency. This is what can be done in the short-run. Over a longer period, however, India will have to invest heavily in water sector, both on the supply side as well on better demand management, with more innovative policies, technology and products. India will have to learn how to use its scarce water resources to cope with droughts and El Nios.
Gulati is a Chair Professor for Agriculture and Saini is a Consultant at the Indian Council for Research on International Economic Relations