Timing of rain is critical, say Indian farmers

Ravi Chandran, a farmer in Tamil Nadu in India, is worried about the strength of the monsoon rains this season.

“Monsoon is our lifeline,” he says. “So far the south-west monsoon is subnormal. We need more rain in catchment areas so that our reservoirs are full.”

There should have been enough water by now, but weak rainfall over the past few weeks means that there is not enough for irrigation, delaying the sowing of crops, explains Mr Chandran, who has been farming for 30 years.

“If the monsoon revives, there is every likelihood that the dam would be opened for irrigation in another 10 to 15 days,” he says. “Further delay will harm.”

He says that Tamil Nadu receives a lot of its rain during the north-east monsoon, between October and December, but farmers in the area are also dependent on the south-west monsoon during June to September, when kharif, or summer crops are grown.

“If water is released late, sowing of rice in our area will also be delayed,” Mr Chandran says. “So by the time the crop establishes, north-east monsoon would set. The transplanted young rice seedling will be submerged during north-east monsoon.”

While the monsoon has been intensifying in recent days, he says that the area where he farms is in a “rain shadow” region.

Heavy rainfall over the coming weeks will be crucial to Mr Chandran and farmers across India.

“Production depends not just on the quantum of rainfall but also its timing and distribution,” according to Crisil. Punjab, Haryana, and Gujarat are the states that have the highest deficiency in rainfall, its research shows.

“Even as the all-India deficiency has come down to 24 per cent of normal from over 40 per cent in June, such a national average doesn’t reveal much about the regional impact,” Crisil said. Spatial distribution is what determines which crops are likely to be affected.”

business@thenational.ae

Follow The National's Business section on Twitter

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”