Food for thought

Updated on: Feb 28, 2022

Record procurement and ballooning stocks of rice and wheat point to cropping imbalance

India’s record procurement levels should not be viewed as an achievement, but instead as pointers to deep flaws in the agriculture marketing system. They have led to excessive stocks of wheat and rice, created by a procurement system that inadvertently ends up encouraging the cultivation of these two crops alone. To be sure, the Centre has, in recent years, announced generous relative increases in support prices of pulses and millets to boost their production. But unless this is backed by a robust procurement or marketing system, the price incentives will not achieve their goal of weaning acreage away from wheat and rice towards more sustainable crops. The Centre’s push to sustainable cropping does not sit well with the way it patted itself on the back recently for achieving record procurement levels — of wheat and rice, since little else is procured. Procurement must be supplemented by the creation of strong private markets and institutions such as cooperative FPOs in the long term, which reduce intermediation costs. At present, the imbalances are only too visible. Wheat procured annually has risen over 70 per cent between 2013-14 and now to 44 million tonnes, and doubled in the case of paddy over this period to 70 million tonnes. An expected food stockpile of 90 million tonnes towards July-August, as in 2021, becomes hard to manage.

At the same time, a weak procurement mechanism for pulses has been keenly felt. For instance, in recent years, tur growers in northern Karnataka have been forced to sell their output at way below the MSP. NAFED, the procurement agency for pulses and oilseeds, buys barely 10 per cent of the pulses out of 25 million tonnes, whereas in the case of oilseeds it procures barely 2.5 per cent of the annual output of close to 40 million tonnes. It has not been able to match its pulses procurement of over 4 million tonnes in 2018-19. Pulses output jumped as a result of MSP hikes, from 16.3 million tonnes in 2015-16 to current levels, but for this to continue NAFED as well as the State procurement agencies must step up their acts. More importantly, private market institutions must be bolstered. A Centre-State body to coordinate procurement of non-cereal crops will help in sorting out issues of logistics and finance.

For a change in cropping, a push to millets too is called for. At present they are not in sufficient demand at the retail level, save high-end, health-conscious urban consumers. It is, therefore, not surprising that despite MSP hikes and other promotional efforts, the production of coarse grains or ‘nutricereals’ has hovered around 40 million tonnes in recent years. For a crop that consumes just a tenth of the water needed to grow a unit of paddy, it makes sense to invest in processing and exports, for which the market is growing. Exports at less than $30 million account for less than 6 per cent of the global share. A push here would yield multiple benefits, including a lower obligation to procure paddy and wheat.

Published on February 27, 2022
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