Could drought derail everything?

"We have enough difficulty forecasting the economy and markets, so we are not about to delve into long run weather forecasts. But this story has popped up on Reuters and it notes that El Nino is "all but certain" this year. For Australia, this means an "all but certain" drought.

While farm output is a small share of GDP (about 2.5%), even a 20% fall in output will cut GDP by about 0.5 percentage points. Rural goods make up about 11% of exports, so a severe drought would hurt the trade accounts...

Implications:

The drought shouldn't have a huge impact on RBA deliberations (even Glenn Stevens can't make it rain) but with the drought occurring at a time of recession elsewhere in the economy, the gloomy mood is likely to impact negative on the economy as a whole. At the margin, it adds to the case for lower interest rates. It may also weight on the AUD given a likely sharp deterioration in the trade accounts.

Reuters Story is below:

El Nino seems all but certain - Australia Met Bureau

* El Nino weather event may be declared within weeks

* Australia wheat crop, India sugar at risk from weak rains

* New El Nino update due July 8

By Bruce Hextall and Michael Perry

SYDNEY, July 2 (Reuters) - An El Nino weather pattern this year appears almost certain, Australia's Bureau of Meteorology said on Wednesday in a revised forecast, raising the prospect of drought in Australia and a even weaker monsoon in India.

The odds for El Nino, an abnormal warming of the eastern Pacific Ocean that creates havoc in weather patterns across the Asia-Pacific region, had risen significantly since two weeks ago, when the bureau said there was a more than 50 percent chance.

"El Nino is a little bit like recession, you are in it before you can say you have one. If it continues as it is now, the historians will say the El Nino started in May," said David Jones, head of the bureau's climate analysis, told Reuters.

He said they could declare a full El Nino within weeks.

That's probably bad news for farmers in Australia who have sown near record acreage, and in India, which is already bracing for below-average monsoon rains, the lifeblood of the country's agriculture.

It would also have implications for commodity markets, potentially lifting wheat prices that have slumped over the past month on expectations of a bumper global harvest, and adding further fuel to soaring sugar prices that are already bracing for a second disappointing crop year from top consumer India.

Most of Australia's 2009/10 wheat crop has been planted following plentiful rain, leading to forecasts of a harvest of as much as 23 million tonnes, the best since 2005/06 when 25.2 million tonnes were harvested.

"The growers I speak to say if we were to get some rains in spring we could get above average yields. But if the El Nino forecast materialised, we are again at risk of having a sub-standard crop," said Richard Koch, managing director of farm advisory firm Profarmer.

Australia's grain production is still recovering from the worst drought in more than 100 years that cut the annual wheat harvest to as little as 10.6 million tonnes in 2006/07.

India's weather office last week cut its forecast for the June-September monsoon rains by 3 percentage points to 93 percent of normal, after four years of above average rainfall. From June 1 to June 24 rains were 54 percent below normal.

A severe El Nino spawns searing drought in countries in southeast Asia, harming rubber production, while causing heavy flooding in Peru, Ecuador and Chile, among others.

LITTLE CHANCE OF AVOIDING EL NINO

The bureau's latest report found that the eastern Pacific Ocean was continuing to warm, with sea temperatures one degree Celsius above normal, and trade winds were continuing to weaken.

The Southern Oscillation Index (SOI), calculated from monthly and seasonal fluctuations in air pressure between Tahiti and Darwin, remained at around negative 2, while the monthly value for May was negative 5.

A sustained negative SOI often indicates El Nino.

"A more complete picture of the situation in the Pacific will be available next week when the final June indices are calculated," said the report on http://www.bom.gov.au/climate/enso/

The next report is due on July 8.

The Climate Prediction Center in the United States said in June that conditions were favourable for a switch to El Nino conditions during June to August.

Original from:: http://petermartin.blogspot.com/2009/07/could-drought-derail-everything.html

Chennai - Fast moving Thunder cell can be seen over South-South-East of Chennai.

Chennai - Nice low cloud movements from west-south-west... Passing showers possible over southern suburbs in next 30min.

Chennai - July month's all time temperature High: 41.1 C (4.7.1915)

Chennai - Thin High cloud cover from morning.. Temperature 36.9°C (1:52pm)... Some low cloud formations can be seen over western Horizon.

Heavy rain on way for Maharastra coast and Mumbai.

On June-30:: Cherrapunji records 43cm, while Vadakara in Kerala records 27 cm of rainfall.

Latest MONSOON satellite shot...Monsoon clouds over west coast and over heavy showers over Central and East India.. http://ping.fm/84a6q

Untapping the resources .. http://digg.com/u179jj

Untapping the resources

It was once said that Indian agriculture was a gamble in the monsoon. That was when traditional agriculture was practised and, with limited irrigation, was monsoon-dependent. With the growth of irrigation and new crop varieties and technologies, Indian agriculture appeared to be reasonably drought-proof. The gamble has returned with climate change - a long-term secular change in rainfall patterns going beyond the shorter term hydrological cycles with which we have long been familiar.

The south-west and north-east precipitation bring rain and floods from excess run-off, part of which is trapped in underground aquifers and more of which can be stored through induced recharge and rainwater and rooftop harvesting, watershed management and storages ranging from ponds and bandhs to larger storages behind multi-purpose dams. The winter westerlies bring snow to the northern latitudes and serve as a savings deposit with a delayed discharge of snow and glacial melt with rising temperatures through the spring and summer. This is the new hydrological cycle affected by global warming and climate change that we must learn to live with and manage.

Most storages, the Bhakra-Pong, for example, are depleted in relation to annual averages and there has been less snowmelt. Glacier recession in the Himalayas and the Karakoram implies higher glacial melt that will provide short-term well-being after which summer discharges will drop significantly. Lower run-off and diminished storages also entail loss of hydropower that could otherwise be used to lift groundwater, where available, and for industrial and cooling purposes.

India is a wasteful user of water and energy, with foolish politicians encouraging waste and misuse through free or concessional water to the 'poor' (which seldom reaches them). This has invariably resulted in poor or no maintenance resulting in asset deterioration. The government has followed a strategy of supply augmentation (necessary in a rapidly expanding economy) while ignoring the related and supremely important strategy of conservation through demand management. The country boasts some fine irrigation and power engineers, but they are trained and devote most of their attention to supply augmentation, whereas 'supply' could perhaps be augmented by as much as a third or more at a mere fraction of the cost by suitable demand management, more appropriate cropping patterns and pricing policies, better use of better technology (drip, sprinkler, recycling, improved maintenance, more efficient lighting systems), and superior regulatory mechanisms that are not handicapped by political interference.

The problems in Punjab and Haryana and the Cauveri basin largely stem from these factors, especially insistence on the paddy-wheat-sugarcane cycle rather than crop diversification, and antique systems of flood irrigation in the Tanjore delta. The argument about big and small dams, raindrop harvesting and surface and groundwater storage, especially large dams, is misplaced and often ideological. Each has its place in an ascending hierarchy. Large storages with huge catchments and commands provide a degree of insurance and carry-over benefits that micro- and mini-schemes simply do not provide. They have all to be worked in tandem through public-private partnerships. If farmers or consumers have ownership of a water supply scheme, or any segment of it, they will ensure efficient management, policing, maintenance and collection of service charges. Hence the importance of participatory irrigation management, which is evident in groundwater schemes.

Aberrant weather must be expected with climate change, with episodic cloudbursts such as those that drowned Mumbai, Bangalore and Chennai some years ago and caused drought in Assam and the Northeast in some of the historically wettest regions in the world. In this situation, the rainfall must be captured when and where it falls, with destructive flood 'surpluses' caught behind dams. Further, given spatial and seasonal variations in rainfall patterns, water can and must be moved from 'surplus' to 'deficit' regions over time and space. This is what storage irrigation does, augmented by inter-basin and trans-basin transfers, a hoary practice in India and around the world. This is how the unimaginatively named Inter-Linking of Rivers (ILR) proposal was conceptualised, but never envisaged as a single mammoth 'project' except by uninformed politicians, judges and critics who combined to conjure up a myth that did no service to the basic idea. ILR survives and, apart from the Ken-Betwa link, two other west coast northward trans-basin diversions in Gujarat are under study.

Since rivers flow across national and internal political boundaries, they must be seen and planned in terms of natural resource regions. The Constitution provides for river basin authorities. But these have never been pursued on account of parochial political feuding, often resulting in wasteful schemes being taken up to pre-empt any raid on alleged surpluses. One brave effort, the Damodar Valley Corporation (DVC), was killed by West Bengal within less than a decade of its launch. Maybe the institution of water markets (with independent regulators to oversee suitable safeguards for weaker players) and water parliaments (that bring together upper and lower riparians across river basins with statutory safeguards) could provide answers.

International rivers (the Indus, Ganga and Brahmaputra-Meghna systems) can also only be developed optimally through regional cooperation. Here, new strategies must be devised, including joint management and operation of sensitive projects. The Tipaimukh multi-purpose project in Manipur, which could immensely benefit Bangladesh too, suggests itself as a good candidate. The scare about Chinese plans to divert the Brahmaputra northwards is a piece of uninformed nonsense. More to the point, the Indian government should urge Pakistan to move forward on Indus II, providing for joint exploration, construction, operation and management of the Upper Indus basin on both sides of the Line of Control to ward off the common peril of climate change.

Meanwhile, if the delayed rains spread this week as expected and the country gets 85-95 per cent of July-September rainfall, drought can be averted with alternative cropping patterns and staggered load-shedding. Advancing the clock by 60-90 minutes for daylight saving could yield some dividends too while an expanded National Rural Employment Guarantee Act could stave off hunger and help build farm capital assets. Finally, long-term water management dictates a restructuring of the Ministry of Water Resources, the Central Water Commission and related agencies that are old fashioned supply-side organisations that lack the inter-disciplinary competence required to manage India's water future.

B.G. Verghese is a Visiting Professor, Centre for Policy Research, New Delhi

Original from:: http://www.hindustantimes.com/StoryPage/StoryPage.aspx?sectionName=HomePage&id=e09cc357-4dd5-4520-a21e-e0748aa643a0&Headline=Untapping+the+resources