New Delhi: The monsoon is set to bring cheers to Indian farmers this year after the first back-to-back shortfall in rainfall in three decades ravaged crops.

Showers during the four-month rainy season starting June will probably be normal as the El Nino is seen returning to neutral conditions by the middle of the year, according to Skymet Weather Services Pvt. Rainfall was 14% below a 50-year average last year, preceded by a 12% shortfall in 2014, data from the India Meteorological Department (IMD) show.

Prime Minister Narendra Modi’s government is counting on a normal monsoon to sustain economic growth and contain food costs after the lowest rainfall since 2009 parched vast tracts of farm land, hurting rice, corn, sugar cane and oilseed crops last year. About half of India’s 1.3 billion population is employed in agriculture, which accounts for roughly 18% of the nation’s $2 trillion gross domestic product (GDP).

“A normal monsoon is very critical for the economy this year," said Dharmakirti Joshi, an economist at Crisil Ltd., the local unit of Standard and Poor’s. “If the monsoon is normal, that will be the major driver of growth because agriculture has suffered in the last two years. Normal rainfall can give a one-time kicker to the economy."

Water scarcity

Deficient rain last year wilted crops and cut water levels in India’s main dams. The nation’s reservoir levels are three- quarters of the past decade’s average. Water scarcity could hurt crops, push up prices and dent economic growth in Asia’s third-biggest economy.

The El Nino has already peaked and will continue to decline, according to forecasters from the US to Australia. The probability of the emergence of La Nina conditions augur well for rain in India.

“We can see improvement in the rainfall as El Nino is decreasing and becomes neutral in June," said G.P. Sharma, vice president at Skymet, a New Delhi-based private forecaster. “Rains will be more or less normal. I expect La Nina to occur after September."

La Nina, sometimes thought of as El Nino’s opposite, typically brings more rainfall to parts of Asia, including India. El Nino is a warming in the equatorial Pacific Ocean, while La Nina is a cooling of the waters. Each can impact agricultural markets as farmers contend with too much or too little rain.

La Nina probability

Based on the 26 El Nino events since 1900, about 50 % have been followed by a neutral year with 40% by La Nina, according to Australia’s Bureau of Meteorology. The previous La Nina began in 2010 and endured into 2012. Conditions typically last between 9 months and 12 months, while some episodes may persist for as long as two years, according to the National Oceanic and Atmospheric Administration.

The monsoon accounts for about 80% of India’s total showers, and affects both summer and winter sowing. The seasonal precipitation waters more than half of the farmland, where sowing begins in June.

Normal rainfall will boost India’s agricultural production and improve demand for two-wheelers, motor cycles and tractors, Crisil’s Joshi said. Bigger harvests will also help the South Asian nation contain food prices, he said. Bloomberg

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