1. Introduction. 2. Past Trends of Foodgrains Demand. Growth of Agriculture & Allied and GDP Five Year Agriculture &

Transcription

1 Future Scenario of Foodgrains: A Case Study for Gap between Demand and Supply (Rajesh Kumar Vishwakarma, Economist (Transport & Economics), RITES Ltd., Gurgaon) 1. Introduction Foodgrains demand and supply estimation is very essential to assess the gap between demand and supply and achieve 9% annual economic growth with agriculture and allied sectors growing at the rate of 4% per annum which is estimate of Planning Commission for ideal economic growth in the 11 th five year plan. The following table/picture show the fact that ninth plan was beyond away from expectation of target however, tenth and eighth was plan trying to touch the goals of growth. Growth of Agriculture & Allied and GDP Five Year Agriculture & Plan Allied GDP Eighth plan Ninth Plan Tenth Plan This paper briefly describes, compares, analysis the mythologies and tools being used for estimating national and projected demand and supply of rice, wheat and pulses. Projection of demand based on growth of population, urbanisation and per capita consumption. Projection of supply is based on either domestic production or through imports. The data which are materializing in the prediction for this paper is based on RITES 2010 Total Transport System Study for Planning Commission, Government of India. Projection present short, medium and long-term demand and supply for the base year and horizon years i.e , , and in respect of 3 major commodities of foodgrains viz., rice, wheat and Pulses. A comparison of demand and supply estimated by other studies is also presented during the discussion. 2. Past Trends of Foodgrains Demand The following table indicated a declining trend in the consumption expenditure of total cereals while increasing in case of rice and wheat. Consumption of per capita rice and wheat increases from 68.1 to 72.9 kg/annum and 47.9 to 52.7 kg/annum respectively and pulses declined from 10.1 to 8.5 kg/annum from the year 1983 to This may be attributed to diversification in consumption pattern, easily available of other agricultural commodities, changes tastes and preferences and changes in the items of food prices. indiastat.com February March, socio - economic voices

2 Table 2 show rural people expended more on rice and cereals while less in case of wheat and pulses. Table 1: Trends of Annual Per Capita Consumption of Rice, Wheat, Pulses and Cereals (Kg/Annam) (National Sample Survey Organization (NSSO) in the different round to the period 1983, 1999 and 2004) Table 2: Average Per Capita Consumption Expenditure of Rural and Urban (Kg/Annum) Average and Crop Rural Urban Rice Wheat Cereals Pulses Source: 55th and 61st round of NSSO 3. Expert Projection of Foodgrains Demand Future foodgrains demand estimates made by some experts are given in the table 3 Table 3: demand projections made by various experts (million tonnes) Commodity Year By Working Group By Mittal, 2008 By Kumar, 1998 By Hanchate & Dyson, 2004 Rice Wheat Pulses indiastat.com February March, socio - economic voices

3 The estimates vary owing to difference in methodology and variables adopted. Kumar (1998) (Pradum Kumar (1998). Food Demand and Supply Projections for India) used food characteristic demand system. Hanchate & Dyson (2004) (Amresh Hanchant & Tim Dyson (2004) Prospects for Food Demand and Supply in the Book Twenty First Century) projected the total demand for pulses at 16 million tonnes in 2026 based on NSS consumer expenditure and expenditure elasticity. Mittal (2008) (Mittal, Surabhi (working paper No. 209, ICRIER, 2008) used population, expenditure elasticity and economic growth for estimating the demand. 4. Projection of Foodgrains Demand The methodology used for the projection of foodgrains is as follows Foodgrain Demand = Projected District-wise Rural and Urban Population x Projected State-wise Per Capita Rural and Urban Consumption Projection of State-wise Per Capita Consumption: The behavioural approach used by Mittal (2008) (Pradum Kumar (1998). Food Demand and Supply Projections for India) were interpolated for obtaining the national demand for different horizon years and segregated into rural and urban consumption based on proportion of rural and urban used in the NSSO estimates. State-wise per capita consumption for rural and urban are uses from NSSO, consumption expenditure survey conducted in for rice, wheat and in for pulses. Projection of State-wise per capita consumption estimated based on national per capita consumption for the horizon years obtained was weighted by NSSO data to obtain state level per capita rural and urban consumption. Projection of Population: District level rural and urban population was projected using population trends made by Registrar General of India and urban growth trends by the 11th Plan Working Group. On the basis of above methodology national demand for rice, wheat and pulses estimated for horizon years is given in the Table 4 indiastat.com February March, socio - economic voices

4 Table 4: demand projections of rice, wheat and pulses (Million Tonnes) Commodity Rural Rice Urban Total Rural Wheat Urban Total Rural Pulses Urban Total Past Trends of Foodgrains Supply Table 5: Past Trends of Foodgrains Supply (Million Tones) Year Rice Wheat Pulses The production of rice, wheat, and pulses increased at the growth rate of 2.4, 1.7, and 2.8 per cent per annum, respectively during above mentioned period. The above trends of foodgrains supply are no danger to food security but the production can be increased mainly through improvement in productivity. A high rate of increase in productivity calls for a priority in agricultural research system with the development of new production technologies for foodgrains. indiastat.com February March, socio - economic voices

5 6. Expert Projection of Foodgrains Supply Food grains demand is met through either domestic production or through imports. Supply projections made by various agencies/research scholars are given in the Table 5. Table 6: supply projections made by various agencies (Million Tonnes) Commodity Year 11th Plan Working Mittal Kumar Kumar & Group (2008) (1998) Mittal Rice Wheat Pulses Based on broad review of above projection, it is estimated that supply increased by 1.0%, 1.34% and 0.89% per annum for rice, wheat and pulses, respectively. On the basis of these trends supply projections for rice, wheat and pulses for different horizon years are estimated. 7. Projection of Foodgrains Supply On the basis of above trends supply projections for rice, wheat and pulses for different horizon years was estimated. Table 7: supply projections of rice, wheat and pulses (in million tonnes) Commodity/ Year Rice Wheat Pulses indiastat.com February March, socio - economic voices

6 From the expected production a certain proportion does not enter the market as it is consumed towards seeds, animal feed, wastages and industrial use. The quantity not entering the market is estimated by the Working Group for 11th Plan to be 12.5% for wheat and pulses and 7.6% for rice. By reducing the production by this proportion the total quantity of supply is given in Table 7. Table 8: supply projections of rice, wheat and pulses (after adjusting for seed, feed, waste & industrial uses) (million tonnes) Commo dity/yea Rice Wheat Pulses In case supply is less than demand, imports cover the difference. If estimated supply of food grains exceeds the demand, exports on the existing pattern may be considered. 8. Policy Suggestions As per medium and long term agricultural policy, there is need for bridging the gap between supply and demand for foodgrains to able the country to achieve a higher rate of economic growth on a sustained basis. According to projection in the present paper it has been required to import rice and pulses around 12 to 15 million tonnes and 13 to 20 million tonnes respectively in all horizon years while wheat may be export of about 14 to 15 million tonnes in all horizon years. In case of rice, when comparison of practices at state level between improved and former practices, table 9 shows most of states have yield gap more than 20 % while some states have this gap around 50 to 77 %. It can be estimated that these gaps can accomplished future demand of rice by adopting yield by improved practices in the respective states. Similarly the gap between demand and supply of pulses can be minimise by adopting improved practice in which national indiastat.com February March, socio - economic voices

7 yield increase from 625 qt/ ha to 1000 qt/ha. Excess production of foodgrains can be utilize in value addition/food processing industries. demand or through value added product. i.e. monetary value of the country can be increased either by export after fulfils of the country requirements. Table 9 State-wise average ( ) yield performance of wheat by improved practice and former practice State Yield by Improved Practice Yield by Former Practice % Yield Gap Uttaranchal MP WB Karnataka UP Bihar HP Maharashtra Gujarat Punjab Rajasthan Haryana Source: Ministry of agriculture. Table 10 State-wise average ( ) yield performance of rice by improved practice and former practice State Yield by Improved Practice Yield by Former Practice % Yield Gap Average of Irrigated and Rainfed (uplandshallow land) Rice 2003 Manipur Jharkhand UP Chhattisgarh Assam J & K Uttaranchal Bihar Gujrat Source: Ministry of agriculture. II. Another important thing is investment in agriculture. The following table 10 indicated that the trend of low public investment continued in comparison of private investment. The following table also shows insignificant gap between contributions of agriculture and allied in total GDP and their investment. indiastat.com February March, socio - economic voices

8 Table 11 Investment and Contributions of Agriculture and Allied of Total GDP Year Percentage Investment in Agriculture Percentage Share in GDP and Allied Sectors Public Private Investmen Agricultur Agriculture Allied GDP Investment Investment t of GDP e & Allied Source: - Central Statistical Organisation, New Delhi. Rate of capitalization in agriculture and allied has been poor. This is the cause of decline in the public investment. Public investment in different agricultural activities could make agricultural profitability and could boost up private investment. 9. References RITES 2010, Total Transport System Study for Planning Commission, Government of India. National Sample Survey Organisation (NSSO) of different round to the period 1983, 1999 and 2004 Census 2001 Central Statistical Organisation, New Delhi. Agricultural Statistics at a Glance 2005, 2006 and 2007, Directorate of Economics and Statistics, Govt. of India Annual Survey of Industry from the year to Working Paper No. 209, Demand-Supply Trends and Projections of Food in India by Surabhi Mittal, March 2008 Tim Dyson and Amresh Hanchante (2000). India s demographic and Food Prospects-State-level Analysis. EPW Nov.11 Surabhi Mittal (2006). Structural Shift in Demand for Food: India s prospects in ICRIER Working Paper. R. Thamarajakshi (2001). Demand and Supply of foodgrains in 2020 in the book Towards Hunger Free India edited by M.D. Asthana and Pedro Medrano. New Delhi, Manohar. Punjab Singh (2001). Agricultural Policy Vision: Background paper for Planning Commission Vision Amresh Hanchante and Tim Dyson (2004) Prospects for food demand and supply in the book twenty first century India, edited by Tim Dyson, Robert Cassen and L. Visaria, Oxford University Press. FAOSTAT data. indiastat.com February March, socio - economic voices