Record output, stubborn prices

| Updated on March 09, 2018

The wide difference between farm-gate and retail prices lends credence to the suspicion that some of the final output numbers may have been overstated.

The agricultural performance in 2010-11 is perhaps testimony to the proposition that higher output is no guarantee for lower prices. The latest official estimates of crop production speak of a new high in agricultural output. The numbers, no doubt, point to a commendable overall achievement on the farm front with foodgrains as a whole, and wheat in particular, as also pulses scaling new peaks. Ironically, however, food prices have stayed at elevated levels despite the record harvests. Also, in terms of market prices, consumers have enjoyed rather limited relief. The wide difference between farm-gate and retail prices, while emphasising the need for improving supply-chain efficiencies also lends credence to the suspicion, voiced in some quarters, that some of the final output numbers may have been overstated.

That apart, the question is whether the farmers did anything dramatically different last year to harvest bumper crops. Or was it just favourable weather coupled with higher prices for official procurement and the prospect of better open market prices that encouraged growers? What drove farm output higher in 2010-11 will remain a debatable topic for some time; but the point to note is that new highs in farm output are possible to achieve, given the appropriate conditions. Availability of quality inputs (seeds and fertilisers), well-distributed rains and efficient agronomic practices are some of these requisites. And sustained efforts are imperative, not only to sustain such record output levels but also to ensure consistent annual growth. The management of the humungous foodgrain stocks with the government calls for a far more scientific and cost-conscious approach. Allowing exports in driblets is surely not one of them. From time to time, Indian agriculture proves its resilience; but there is simply no guarantee that it will continue to perform exceptionally well, season after season.

On current reckoning, looking at the performance of the south-west monsoon and available acreage data, the year under way may still be challenging. In many cases, the planted acreage has lagged vis-à-vis this time last year. Although the final picture will emerge by the end of this month, it must be stated there are early signs that kharif 2011 farm production may slip. In the event, control over food prices could become a lot more daunting. It is important that the government's various crop production programmes and schemes are implemented with full vigour so that actual output stays close to the target. Even as Krishi Bhawan deserves to be complimented for the record production in the year gone by, there is need for greater vigil to ensure that the gains of 2010-11 are sustained. The Agriculture Ministry has its task cut out.

Published on July 28, 2011

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