Monitoring Agricultural Outlook for India: The Supply Side Challenges of Food Security

Transcription

1 Monitoring Agricultural Outlook for India: The Supply Side Challenges of Food Security Presentation By Shashanka Bhide, NCAER, New Delhi At UN ESCAP South Asia Policy Dialogue on Regional Cooperation for Strengthening National Food Security Strategies August 13-14, 2013 New Delhi

2 Acknowledgements National Food Security Mission Project Team at NCAER Most data are from Official Statistics

3 Outline of the Presentation (1) Backdrop (2) Drivers of Agricultural Outlook in the Medium Term (3) An assessment of the medium term prospects

4 Backdrop Ministry of Agriculture, Government of India, commissioned a project to NCAER to bring out short term and medium term Agricultural Outlook Reports focusing on food commodities. This 3- year project began towards the end of 2011 with the objective of integrating wide range of information available on the food sector and provide insights into the future scenarios. Starting from June 2012, five Quarterly Reports and one semiannual Medium Term Outlook Reports have been brought out so far. FAO is supporting supplementary activity in terms of collection of additional data and modelling alternative policy scenarios

5 A Framework for Assessing Agricultural Outlook Global prospects for supply and demand conditions: availability and prices of imports and demand and competitiveness of exports Policy support for agriculture: incentives for investment and productivity growth Emerging supply- demand balances for food commodities emerging from economy, policies, monsoon and inputs Regional variations within the country: need for spatial shifts; need for integrated markets

6 Sources of Information on Global Perspectives WB, IMF, UN: Overall economic growth, inflation, international prices, currencies, trade, population trends FAO, FAO-OECD reports, databases Agricultural Outlook Food price indices USDA, ABARES, IGC, FAPRI Pulses?

7 The national food economy Production prospects: Monsoon, market environment for producers, investment, input supplies, technology The market: Income growth, market infrastructure, policies Adjustment to imbalances: Prices, stocks, consumption Assessing sustainability of strategies: Supply-demand imbalances, water scenarios, fiscal pressures, lack of incentives to producers and supply chain, high food inflation

8 Monsoon Matters: Agricultural Production Index and Monsoon Rainfall as % of Normal PROD INDEX RAIN RAIN PROD INDEX (Estimated)

9 Drivers Of Outlook In The Medium Term

10 What Will Drive Production?

11 % of GDP (constant prices) Declining Share of Agriculture in the Economy Agriculture & allied activities Agriculture 10 0

12 Challenge of Small Farms No. of farm holdings with <= 1 ha (million) Avg holding size (ha) (Right)

13 Productivity Growth Driving Production: All Crops Indices, Average % Change Per Year Item to to to Area Yield Production

14 Productivity Growth Drives Production Growth: Rice Indices % Change YOY RCE_A RCE_Q RCE_Y

15 What Drives Productivity?

16 Productivity drivers Investments (Irrigation, infrastructure, technology) Input use (Fertilisers, machinery, new seeds) Higher value addition Spatial shifts in production Better terms of trade

17 Producer Prices Keep Up with Input Costs: Price Indices Index of Prices Received Index of prices paid Index of Prices Received Index of prices paid Index of Terms of Trade (Right)

18 Trends in the Ratio of Output Price to Input prices (%) Commodity Input Food grain Diesel Electricity Fertiliser Note: Ratios are based on wholesale price indices.

19 But Food Prices Rise: WPI, % Change YOY Cereals Pulses Vegetables Fruits Milk Edible oils Sugar All commodities

20 Accommodating Global Prices: FAO Price Indices Cereals Price Index Food Price Index

21 What is supply responding to? Rising income levels Urbanisation The Food Security Bill

22 Net Availability of Food Items: Grams/ day Item (P) Rice Wheat Cereals Pulses Edible oil Sugar Milk Net Availability= Production- (Seed, Feed, Wastage) + Imports Exports + (Beginning Stocks Closing stocks) P = Provisional

23 THE MEDIUM TERM OUTLOOK

24 Commodity Medium Term Projections and comparisons Estimates for Working Group Projections Alternative scenarios Rice Wheat Coarse cereals Cereals Pulses Foodgrain Oilseeds Potato Onion Banana Sugarcane Milk

25 The Supply Slide Goal: Sustaining food production capacity Concerns: Consumer subsidies and fiscal pressures Fiscal pressures and input subsidies Transition to more efficient markets

26 Thank You