A Spatially Skewed Story
This year's monsoon, influenced by a strengthening El Niño, has been highly erratic. The season is ending with a significant national rainfall deficit of around 14-15%. However, this single number hides a more complex reality. The rainfall has been what
experts call “spatially skewed,” meaning its distribution has been extremely uneven across the country. While some regions in western and central India received heavy rains, others faced severe shortfalls. The south peninsula has been hit hardest with a deficit of around 28%, followed by east and northeast India at 25%. Key agricultural states like Andhra Pradesh, Punjab, Bihar, and Karnataka are reporting deficits ranging from 29% to over 40%, creating deep concern as the Kharif (monsoon crop) harvest concludes and preparations for Rabi sowing begin.
Water in the Bank?
The performance of the monsoon directly impacts India’s “water bank account”—the 178 major reservoirs monitored by the Central Water Commission. These reservoirs are vital for irrigating the Rabi crops, which account for about half of India's food grain production. As of mid-September, national water storage was about 7% below the normal long-term average and significantly lower than last year. This national average is again misleading. While storage in western and central India has improved, levels in the northern and especially the southern regions remain sharply below normal. States like Tamil Nadu, Andhra Pradesh, and Karnataka, which are major Rabi producers, are reporting concerning gaps in their reservoir levels, threatening the prospects for water-intensive winter crops.
Crops on the Watchlist
The combination of low soil moisture from a deficient monsoon and reduced reservoir levels puts several key Rabi crops at risk. The winter season is when India grows most of its wheat, along with other essential commodities like mustard (rapeseed), chana (chickpeas), and barley. These crops, particularly wheat, rely heavily on residual moisture in the soil and access to irrigation. With less water available, farmers may be forced to delay sowing or even switch to less water-intensive crops. This could potentially impact the overall production volume of these staples. The Finance Ministry has already flagged concerns that the El Niño effect could pose risks to Rabi output, particularly for wheat and mustard. The next few weeks will be critical as farmers make their planting decisions based on the available water resources.
The Specter of Food Inflation
Reduced agricultural output often translates to higher prices for consumers, and the current situation is no different. The potential for a weaker Rabi harvest is raising concerns about food inflation, which has already been a persistent issue. While government officials have stated the monsoon shortfall is “manageable” and that they expect a good crop output, the risk remains. Food inflation in August was recorded at around 6%, and the reservoir position is a key factor in determining future price trends. Projections made earlier in the year suggested food inflation could average around 6% for the fiscal year if the monsoon proved to be poor. The government holds significant buffer stocks of grains like wheat, which can be released to cool prices, but a shortfall in other commodities like pulses and oilseeds could still pinch household budgets.
Government's Balancing Act
The government is actively monitoring the situation and has already taken steps to support farmers ahead of the Rabi season. The Cabinet Committee on Economic Affairs approved an increase in the Minimum Support Prices (MSP) for all mandated Rabi crops for the 2026-27 marketing season. The sharpest hikes were for safflower and lentils (masur), with notable increases for mustard, gram, and wheat as well. This move is intended to ensure remunerative prices for farmers and encourage crop diversification. Additionally, the government has approved the procurement of gram, mustard, and lentils under its Price Support Scheme (PSS) in several states to safeguard farmers from falling market prices. These policy measures aim to cushion farmers from the economic impact of the erratic monsoon and stabilize the agricultural sector through a period of uncertainty.
