The Hindu Business Line : Giving unfettered role to pvt sector in marketing wheat

With a planted area of 26-27 million hectares and harvest of 75-77 million tonnes, India is world’s second largest producer and consumer of wheat after China. Yet, there are concerns. Planted area has been expanding at an extremely modest rate. For last ten years, the annual average growth in production has been a paltry 1.5 per cent. Wheat yields typically average 2.6- 2.7 tonnes a hectare, contrasting with China where yield averages 4.2 tonnes a hectare.

EMERGING SCENARIO

Importantly, China consumes three times more mineral fertilisers than India. For foodgrains in general and wheat in particular, the emerging scenario calls for urgent attention of the policymakers. Rising incomes and demographic pressure drive demand for a wide range of food products. Wheat is no exception. Government’s welfare programs like Antyodaya Anna Yojana generate additional demand. Indeed, changing food preferences are another factor.

The traditionally rice-eating South India is today the fastest growing market for wheat. The demand side is positive and growth is robust. On the supply side, there are concerns galore.

Wheat output has become unsteady because of several factors including weather conditions and water availability. Land constraints are coming to the fore. A huge ecological disaster may be waiting to happen in Green Revolution States (Punjab/Haryana) where water-table has dropped to alarmingly low levels. Mono-cropping (rice-wheat-rice cycle) of grains has completely enervated the soil, as a result of which yield increases are hard to come by.

Global warming has added a new dimension to our wheat worries. Indian wheat is at the limit of heat tolerance. Even a 1.0-1.5 degree Celsius rise in temperature during growing period can hurt yields. We need to evolve heat-tolerant varieties. Rising demand and unsteady output are tightening supplies and creating import dependence from time to time.

Global wheat prices are impacted not only by food and feed demand, but also demand from the biofuel sector (ethanol). High energy prices lift prices of grain such as wheat, corn and soybean. Overseas suppliers are keenly watching developments in India. The era of low global food prices seems to have ended. So, imports are not going to come cheap.

How does India propose to respond?

INVESTMENT IN R&D

Investment in research and policy support is the key. We need non-price and non-trade initiatives. Crop diversification in high input mono-cropping regions (Punjab, Haryana) is absolutely necessary. User charges should be levied on water and power.

Farm scientists must examine possibility of area- and yield-expansion in Uttar Pradesh, Rajasthan, Bihar and Madhya Pradesh. Price support and procurement policy for wheat deserves to be reviewed.

Grains management through government agencies provide scope for rationalisation and reduction of food subsidy burden. The private sector should have unfettered role in the marketing of the fine cereal.

(Business Line invites responses from readers. Responses may be sent to agribiz@thehindu.co.in)