CHAPTER V DEMAND VERSUS SUPPLY OF FOOD GRAINS IN INDIA: FUTURE SCENARIO

139 CHAPTER V DEMAND VERSUS SUPPLY OF FOOD GRAINS IN INDIA: FUTURE SCENARIO To project the future food security scenario of India is the objective of this chapter for which future demand and supply of food grains have been estimated on the basis of past performance. The estimation of plausible future food scenario is fraught with well known uncertainties and problems, but the trends and projections of demand and supply of various important food items help policy makers to take informed policy decisions relating to food security and food self sufficiency situation of the country which justify the need of the study. 5.1: Per Capita availability of Food Grains: In the pre reform period the growth of agriculture was not so impressive. In this time period the population and income grow at the fast rate. But the food production was not able to keep pace with it and it is the main reason of declining net per capita availability of food grains. Figure: 5.1 shows the trends in per capita food consumption since 1991: This shows a continuous declining trend. The annual per capita net availability of food grains has been falling steadily during reform period. If we consider the five year moving average from 1991 to 2012(Figure: 5.2) the figures decline every five year without exception from 186.2 kg/per year in 1991 to 164.2 kg/ per year in 2012. The cereal per capita availability declined from 171 kg/ per annum in 1991 to 149.1 kg/ per annum in 2012. In the decade of 2001 to 2011 the population of India has increased 17.64 per cent. This decade also witnessed the good production growth in cereals as compare to 1991-92 to 2000-01, but still the per capita consumption of all the food grains is declining. It is clear from above analysis that the main food grain demand pusher (population and per capita income), are growing faster than domestic production of food grains. The per capita cereals has declined by 12.8 percent (from 171 kg to 149.1 kg) in time period from 1991-92 to 2011-12 and by 3.6 percent (from 154.3 kg to 149.1 kg) in 2000-01 to 2011-12. The superior cereals rice and wheat, which are the main constituent of countries food security, their

140 per capita availability also declined over the period. The per capita availability of rice declined by 14 percent (from 80.9 kg to 69.4 kg) since 1991 and the wheat net per capita availability declined by 3.8 percent (from 60 kg to 57.7kg) during this period. The net per capita availability of pulses shows no change form 1991-92 to 2011-2. In the decades of nineties the production of pulses decline so the per capita availability 10.6 kg per year in 2003 from 15.2 kg in 1991. After 2007 it showed increasing trend because of special effort of government under NFSM which raised the production of pulses in the country. In 2012 the pulses net availability again increased to the level of 1991 i.e. 15.2. The net availability of food grains during the period of 1991 to 2012 decline by 11 percent and by 1 percent from 2001 to 2012. This negative trend in per capita production and availability of food grains had appeared in early 1991 and continues since then. So it shows that country is not able to keep pace with demand. Figure: 5.1 Trends in annual per capita consumption of food (in kgs) Source: Directorate of Economic and Statistics, Department of Agricultural and Cooperation.

141 Figure: 5.2 Five year moving average of annual per capita consumption of food (in kgs) Source: Directorate of Economic and Statistics, Department of Agricultural and Cooperation. In consequences of rising demand of food grains due to the factor like increase in population, rise in per capita income create a pressure of rising price in economy. After 2006-07 food price increase drastically (Table: 4.1). The rising pressure of world food demand and supply shocks also contributed in rise in prices of food grains. Table: 4.1 show the rate of inflation of Whole-sale Price Index from 2006-07 to 2012-13. Most of the time food grain inflation remains above the acceptable level of 4 percent. The year 2006-07, 2009-10 and 2012-13 faced the prominent rise in prices. Pulses which are the main source of protein of low income household face major burn of rising prices. In 2006-07 the pulses witnessed the 31.6 percent of growth in prices and 19.6 percent in 2012-13. The household with low income are more vulnerable to these rising prices and affect their food security by affecting their access to food grains. In India food expenditure constitute 38.6 percent of total household expenditure, so the rising price because of supply bottlenecks has serious impact upon country food security.

142 Table: 5.1 Growth rate of (Inflation) WPI of food grains (Base: 2004-05=100) Year (weight) Food grain (4.09) Cereals (3.37) Rice (1.79) Wheat (1.12) Pulses (0.72) 2006-07 14.1 10.1 4.6 19.1 31.6 2007-08 6.9 9.5 11.3 7.3-2.8 2008-09 11 11.9 14.8 9.9 7.5 2009-10 14.5 12.6 12.3 12.8 22.4 2010-11 4.9 5.3 5.9 3 3.2 2011-12 3.6 3.9 3.1-1.8 2.5 2012-13 14.6 13.4 12.7 15.6 19.6 Source: Agriculture Statistics at Glance, Ministry of Agriculture 5.2: Plausible Future Scenario of Food Security: In country like India it was always a big challenge to feed the growing population. With the robust economic growth, rising population, where agriculture still a gamble of monsoon; policy makers always face tough question like: what will be the food demand in future? Will India be able to feed its growing population or it will it have to depend on large amount of imports? So study projecting of food demand and supply is always like a light house that will guide their path in making appropriate policies. There is number of studies which projects future food grain demand and supply. Some of the well known studies of demand and supply projection of food grains are showed in Table: 5.2 and 5.3. The demand and supply projections are different for every study because of different assumptions made about the parameters on which demand and supply depends. The estimates for cereal demands range from 237.3 million tons (Rosegrant et.al., 1995) 1 to 374.7 million tons (Bhalla, 2001) 2 in 2020. It can be assumed from those studies the demand that on an average the food grain demand will range around 250-260 million tons. The demand for food grains range from 281 million tons to 296 million tons. On the other hand supply projection for the country range from 259.8 to 289.6 million tons for cereals and 296 to 24 million tons for food grains. These studies show India hardly meets its food

143 demand even in some cases supply can fall shorts of total food demand. This can be a major implication for the food security of country. During the period from 1991 to 2007 agriculture growth shows a declining trend in India. Most of these studies conducted on the basis of this time period. In 11 th FYP plan agriculture get more coverage and there were improvement agriculture production trends. It can be hoped there will be improvement in future food grain supply. Table: 5.2 Demand Projection (million tons) Study Year Rice Wheat Total cereals Pulses Food grain Rosegrant et. Al. (1995) 2020 -- -- 237.3 -- -- Kumar (1998) 3 2020 121.9 100.3 265.7 30.9 296.6 Bhalla (2001) 2020 -- -- 374.7 -- -- Chand (2007) 4 2020 -- -- 261.5 19.1 280.6 Mittal (2008) 5 2021 96.9 66.8 242.8 38.7 281.5 2026 102.2 69.1 273.5 51.5 324.5 Ganesh et. al. (2012) 6 2020 101.4 82.6 -- 13.1 -- 2025 104.7 91.5 -- 14.5 -- Table: 5.3 Supply Projection (million tons) Study Year Rice Wheat Total cereals Pulses Food grain Kumar (1998) 2020 130.40 127.3 309 -- -- Mittal (2000) 2020 149.3 128.5 -- -- -- Kumar & Mittal (2003) 7 2020 127 111.5 274. 15.2 289.2 Mittal (2008) 2021 105.8 91.6 242.2 17.6 259.8 2026 111.2 97.9 260.2 18.4 278.6 Ganesh et. al. (2012) 2020 135.9 96.3 -- -- -- 2025 153.1 102 -- -- --

144 5.3 Demand Forecast: Forecasting of food grains demands for India has been done on the basis of two techniques; Normative Approach and Absorption Approach. Besides direct demand, there is also an important component of total demand which includes seed, feed, industrial uses and wastage, and has been termed as indirect demand. Conventionally, the indirect demand is assumed to be 12.5 per cent of the total food grain production; an assumption being used since 1950s for all official estimates. 5.3.1 Normative Approach: The normative approach is based on the requirement of food and nutrient contents of balanced diet for moderately active person or for sedentary life style. The National Institute of Nutrition, Hyderabad has prescribed the normative requirement per capita per day for different life styles. As per NIN (ICMR2010) the recommended dietary allowance for Indian with moderate and sedentary life style are as following for food grains: Table: 5.4 Recommended Dietary Allowance for Indian of Different Life Styles (kgs/year/per capita) Food Items Annual per capita Requirements for Moderate Life Style Annual per capita Requirements for Sedentary Life Style Cereals 146 kg 122kg Pulses 29.2 kg 25 kg Edible Oils 10.5 kg 9 kg Source: Multiplying the per capita consumption by the projected population of each of the year gives the total requirement for human consumption. Total Domestic Demand = (Annual per capita Consumption * Population) + SFW. This approach also assume short term static Behaviour in Consumption, i.e. increase in income level has no effect on consumption. The demand projection based on the recommended diet for sedentary life style is shown in Table: 5.5 after adjusting it with SFW ratio it gives the minimum demand

145 of food grains for the country in coming decade. The population projection was used given by FAOSTAT based on current census. According to this approach the total demand for cereals will be 185.74 million tons in 2020-21 and 165.10 million only for food purposes. This demand increases to with increase in population to 194.72 million tons in 2025-26 and 202.63 million tons in 2030-31. Pulses which are very important for nutrition security of Indian population, where more than half people are vegetarian reached to 38 million tons in 2020-21, 39.90 million tons in 2025-26 and 41.52 million tons in 20230-31. That is the minimum demand that the country should meet to ensure nutrition security for its population. The total for food will be 223.80 million tons in 2020-21, 234.62 million tons in 2025-26 and 244.15 million tons in 2030-31. In which net food grain demand constitutes 198.93 million tons, 208.55 million tons and 217.02 million tons respectively for 2020-21, 2025-26 and 2030-31. Table: 5.5 Demand Projection with Sedentary Life Styles: (in million tons) Year Cereals Pulses Food Grain 2015-16 176.00 36.06 212.07 2020-21 185.74 38.06 223.80 2025-26 194.72 39.90 234.62 2030-31 202.63 41.52 244.15 Source: Based on table no. 5.4, Data for Population taken from FAOSTAT. Table: 5.6 shows the total food grain demand for moderate life style. The total food grain demand for moderate life style is greater than the food demand under sedentary life style a food requirement for moderate life style is higher compare to sedentary life style. The total cereal demand in 2020-21 will be 222.28 million tons and 197.5 million tons net cereal demand. The net cereals demand increase to 207.13 million tons in 2025-26 and total cereal demand will be 233.02 million tons. In 2030-31 the total cereal demand increases to242.50 million ton. The pulses demand will be 44.45 million in 2020-21which increase to 48.50 million tons in 2030-31. The total food grains demand according to recommended diet will be 266.73 million tons in 2020-21 and 237.09 million tons consist of net food grain demand. Food grains

146 demand will increase to 279.63 million tons in 2025-26. In 2030-31 the total food grain demand will be 290.99 million tons, and net food demand will be 258.66 million tons according to normative approach. Table: 5.6 Demand Projection with Moderate Life Style: (in million tons) Year Cereals Pulses Food Grain 2015-16 210.63 42.12 252.75 2020-21 222.28 44.45 266.73 2025-26 233.02 46.60 279.63 2030-31 242.50 48.50 290.99 Source: Based on table no. 5.4, Data for Population taken from FAOSTAT. The Food and Agriculture Organisation recommend the 440 gm of food grain per day for active and healthy life and ensure food security in India 8. The FAO dietary recommendation (160kg per year) falls within the range of dietary recommendation given by NIN for sedentary lifestyle (147 kg per year) and moderate lifestyle (175.2 kg per year). So, if we apply normative approach on FAO recommendation to find food demand, it will provide more balance picture. According to FAO norms the food demand will be 243.59 million tons in 2020-21. With the growing population this will reached to 255.37 million tons in 2025-26 and 265.74 million tons in 230-31. This is the minimum food grain requirement for country to ensure food security at national level. 5.3.2 Absorption Approach: The second approach of estimating demand is absorption approach. The biggest benefit of this approach is, there is no need to make any assumption seed, feed, wastage and industrial use and there is no reliable estimates regarding SFW. The absorption in economy includes human consumption, animal feed, seed, industrial use, wastage and any change in private stocks with traders, farmers and household. Actual demand absorption of a commodity in a particular year is estimated by addition of production and net imports minus change in government stocks. Normally the absorption has smooth behaviour, but many time it fluctuate due to change in

147 especially related with the private sector stocks affects the total absorption in year 9. To estimate the future food demand the annual absorption since 1991-92 to 2010-11 annual absorption data had been taken. Over the years the absorption of major food grains shows increasing trends. The total absorption of food grains was 173.4 million tons in 1991-92 this increase to 232.9 million tons in 2010-11. Cereals absorption increase to 161 million tons in 1991-92 and increase to 212.4 million tons. The absorption of rice and wheat increases to 90.5 million and 82.5 million tons in 2011-12 from 75.6 million tons and 59.4 million tons. Pulses absorption increases to 20.5 million tons in 2010-11 from 12.3 million tons. Table: 5.7 Annual Absorption of Food Grains YEAR RICE Wheat Coarse Grain (in million tons) Cereals Pulses Food Grains 1991-92 75.6 59.4 26 161 12.3 173.4 1992-93 70.5 50.1 36.6 157.2 13.2 170.4 1993-94 75.3 57.5 30.7 163.5 13.9 177.3 1994-95 77.7 63.9 29.8 171.4 14.5 186 1995-96 75.6 66.6 29 171.2 12.7 183.9 1996-97 81.2 71.5 34 186.7 14.8 201.6 1997-98 79.1 62.8 30.4 172.3 13.8 186 1998-99 82.6 67.1 31.3 181 15.4 196.4 1999-2000 83.9 72.4 30.5 186.8 13.5 220.3 2000-01 75.2 57.7 30.8 163.7 11.2 174.9 2001-02 91.9 68 33.5 193.4 15.4 208.8 2002-03 77.8 79 26 182.8 13 195.7 2003-04 85.3 73.1 36.4 194.8 16.5 211.3 2004-05 79 71.3 32.3 182.6 14.2 196.9 2005-06 86.6 74.9 33 194.5 14.6 209.1 2006-07 88.8 77.1 34.4 200.3 16.2 216.5 2007-08 90 68.4 37.4 195.8 17.4 213.2 2008-09 88.3 72.7 35.5 196.5 16.9 213.4 2009-10 82.3 80.3 31.1 193.7 18.1 211.7 2010-11 90.5 82.5 39.4 212.4 20.5 232.9 Source: Planning Commission Report of Working Group on Food Grains

148 The absorption per year shows the increasing trend in table: 5.7. It can be assumed in normal conditions if population is increasing the absorption per year will also increase. There is some fluctuation in these trends; this is due to change in the stock with government and private traders. The projection of future food grain demands has been done different alternative scenario. First simple trend has been extrapolated to find the future demand. But, to smoothen the fluctuation three year and five year moving average has been calculated and corresponding growth rates has been estimated. The food grain demand was projected on the basis of point to point CAGR after taking different base year scenarios. Table: 5.8 show the projection of total demand of rice in coming decade. If we simply follow the absorption trend of rice consumption give in Table: 5.8 the rice demand will be around 97.6 million tons in 2020-21 which increase to 105 million tons in 2030-31. The demand for rice in 2030-31 ranges from 105 million tons to 108.5 million tons under alternative scenario. The projection using exponential trends gives highest projection. If we calculate rice demand using three year moving average; the compound annual growth rates of absorption comes 0.92 percent. Taking the average of 2008-11 as base year, the estimates for rice demand comes 96.25 million tons for 2015-16, 100.76 million tons for 2025-26 and 105.48 million tons for 2030-31. If we take five year moving average of absorption of rice then the CAGR was observed 1.1 percent and which gives the projection of demand 99.13 million tons in 2015-16. The rice demand will be 104.19 million tons in 2025-26 and 109.51 million tons in 2030-31 using this scenario. Table: 5.8 Rice Demand Projections (million tons) Year Trend Exponential 3 MA 5 MA Trend 2015-16 93.23 93.89 91.95 94.32 2020-21 97.16 98.52 96.25 99.13 2025-26 101.08 103.39 100.76 104.19 2030-31 105.00 108.5 105.48 109.51 Source: calculated from Table: 5.7

149 Table: 5.9 observed the future demand projection for wheat. The demand for wheat in 2030-31 ranges 102.18 million tons to 112.34 million tons. Simple trend analysis shows that wheat demand will be 90.87 in 2020-21, 96.52 million tons in 2025-26 and 102.18 million ton in 2030-31. Exponential trend slightly overestimated the demand in comparison of other alternatives. This trend shows the wheat demand will be 103.25 million tons in 2025-26 and 112.34 million tons in 2030-31. The estimates of wheat demand calculated on the basis of three year moving average shows the demand will be 107.31 million tons in 2030-31. The CAGR for three year moving average of absorption comes 1.5 percent, with the base year consumption 78.5 it shows that it will increase to 99.61 in 2025-26. The estimates based on five year moving average, with 1.4 percent CAGR, shows wheat consumption will be 96.51 million tons in 2025-26 and 103.46 million tons in 2030-31. Table: 5.9 Wheat Demand Projections (million tons) Year Trend Exponential 3 MA 5 MA Trend 2015-16 85.21 87.22 85.83 83.98 2020-21 90.87 94.90 92.46 90.03 2025-26 96.52 103.25 99.61 96.51 2030-31 102.18 112.34 107.31 103.46 Source: calculated from Table: 5.7 With the improvement in economic condition the consumption of coarse grain has been down but they are still play important role ensuring food security at local level. In recent decade there is increase in demand for coarse cereals because of increase in their industrial uses. The estimates show that the demand will be around 41 to 43 million tons for food grains in 2030-31. The projection based on three year moving average with 0.84 percent annual growth rate will be 40.39 million tons in 2025-26 and 42.11 million tons in 2030-31. Five year moving average of absorption with 0.89 annual growth rate estimate coarse grain demand 39.54 million tons in 2020-21, 41.34 million tons in 2025-26 and 43.21 million tons in 2030-31.

150 Table: 5.10 Coarse Cereals Demand Projections (million tons) Year Trend Exponential 3 MA 5 MA Trend 2015-16 36.87 36.98 37.15 37.83 2020-21 38.42 38.78 38.73 39.54 2025-26 39.96 40.67 40.39 41.34 2030-31 41.50 42.65 42.11 43.21 Source: calculated from Table: 5.7 In 2030-31 the total demand for cereals ranges from 246.81 million ton to 261.81 million tons. According to simple trends basis the total cereal demand will be 226.41 million tons in 2020-21, 237.58 million tons 2025-26 and 248.7 million tons in 2030-31. Based on three year moving average with 1.2 percent of annual growth rate the demand for cereals will reached to 229.03 million tons in 2020-21, 243.10 million tons in 2025-26 and 258.04 million tons in 2030-31. The five year moving average with 0.96 percent annual growth the demand will reach to 234.96 million tons in 2025-26 and 246.96 million tons in 2030-31. Table: 5.11 Total Cereals Demand Projection (million tons) Year Trend Exponential 3 MA 5 MA Trend 2015-16 215.33 217.91 215.76 213.55 2020-21 226.41 231.66 229.03 224.00 2025-26 237.58 246.27 243.10 234.96 2030-31 248.7 261.81 258.04 246.96 Source: calculated from Table: 5.7 The pulses consumption will rise with the increase in per capita income. The pulses demand will range from 21.71 to 24.22 million tons in 2025-26; this will reach around 24 to 26 million tons in 2030-31. The exponential trend shows the demand for

151 pulses will be 20.87 million tons in 2020-21, 22.82 million tons in 2025-26 and 24.94 million tons in 2030-31. The three year moving average taking average of 2008-09 to 2010-11 as base year with 1.7 growth rate the absorption of pulses will be 22.26 million tons in 2020-21, 24.22 million tons in 2025-26 and 26.35 million tons in 2030-31. With five year moving average, CAGR was observed 1.4 percent and estimates for total pulses demand comes 22.83 million tons for 2025-26 and 24.56 million tons for 2030-31. Table: 5.12 Pulses Demand Projection (million tons) Year Trend Exponential 3 MA 5 MA Trend 2015-16 18.93 19.1 20.46 19.73 2020-21 20.32 20.87 22.26 21.23 2025-26 21.71 22.82 24.22 22.83 2030-31 23.1 24.94 26.35 24.56 Source: calculated from Table: 5.7 The projection for total food grain demand will also made using alternative scenario. In 2020-21 the food grain demand will ranges between 246.85 million tons to 252.51 million tons, this will ranges between 271.38 million tons to 285.91 million tons in 2030-31. It can be safely assumed the food grain demand will be around 280 million tons in 2030-31. With three year moving average total food grain demand comes 252.81 million tons for 2020-21, 269.68 million tons in 2025-26 and 287.67 million tons in 2030-31, observing 1.3 percent of annual growth rate. The estimates for total food grain demand comes 252.51 million tons for 2020-21, 268.69 million tons for 2025-26 and 285.91 million tons for 2030-31, by taking five year moving average.

152 Table: 5.13 Total Food Grain Demand Projections: Year Trend Exponential 3 MA 5 MA Trend 2015-16 234.57 237.45 237.00 237.3 2020-21 246.85 252.65 252.81 252.51 2025-26 259.12 268.93 269.68 268.69 2030-31 271.38 286.2 287.67 285.91 Source: calculated from Table: 5.7 5.4 Food Grain Supply Projection: The future food grain supply of India is projected on two methods. The first simple business as usual approach the by fitting simple linear regression equation as under: Y i = a + bt i Simple regression estimates on time as explanatory variable from 1991-92 to 2012-13 has been extrapolated to find the future supply. This approach assumed future movement in data series is determined by the past pattern embedded in the series and past trend will continue in future also. The second approach based upon simple The second approach based on simple production function approach i.e. Production = f (Area, Yield) Production= Area * Yield To project the future supply average annual growth rates of area and yield was calculated and on the basis of growth rate future area and yield of particular crops was estimated and this estimated area and yield was used to project the future food grain supply. This approach assumed the current increase in productivity growth will remain in future also, and area expansion will also take place. Table: 5.14 shows the future supply of food grains in India. Rice and wheat are the main cereals, on which India food security depends. The production of rice based on the production trend from 1991-91 to 2012-13 shows that the rice supply will be around 111.44 million tons in 2020-21, 117.87 million tons in 2025-26 and

153 124.29 2030-31. If the growth rates of area and yield are calculated for this period the growth came 0.005 percent for area and 1.3 percent for yield. It shows that the further area expansion is not possible and the increase in future supply will depend upon yield growth. On the basis of yield and area growth the supply of rice comes 112.31 million tons for 2020-21, 120.40 million tons for 2025-26 and 129.07 million tons in 2030-31. The supply of wheat based first method shows that the wheat production will be 100.90 million tons in 2020-21, 108.52 million tons in 2025-26 and 116.16 million tons in 2030-31(Table: 5.14). The wheat area registered the average annual growth 0.85 percent and yield growth rate was observed 1.13 percent by assuming triennium ending 2012-13 as base year the wheat production will be 106.96 million tons in 2020-21, 118.03 million tons in 2025-26 and 130.25 million tons in 2030-31. If we assume no further area expansion will not be possible the wheat production will be 105.73 million tons in 2025-26 and 111.84 million tons in 2030-31. The supply of coarse cereals will be around 44.04 million tons in 2020-21 and 46.75 million tons in 2025-26, this will reached to 49.47 percent in 2030-31. With the advent of green revolution the importance of coarse cereals declines. The area under coarse cereals registered negative growth of 1.08 percent during the time period from 1991-91 to 2012-13; in the same period the yield registered the growth of 2.7 percent. Based upon this scenario taking triennium ended 2012-13 as base period the production of coarse cereals will be 47.63 million tons in 2020-21, 51.62 million tons in 2025-26 and 55.95 million tons in 2030-31 (Table: 5.14). The total cereal production of country will be around 253.61 million tons in 2020-21, 269.74 million tons in 2025-26 and 285.81 million tons in 2030-31. (Table: 5.14). The pulses production be extrapolating current production trends comes 17.7 million tons in 2020-21, 18.68 million tons in 2025-26 and 19.67 million tons in 2030-31. The area under pulses registered the annual growth rate of 0.38 percent during the time period from 1991-91 to 2012-13 and the yield registered the growth of 1 percent. Based upon these growth rates and taking triennium ended 2012-13 as base period the production of pulses will be 20.05 million tons in 2020-21, 21.48 million tons in 2025-26 and 23.01 million tons in 2030-31 (Table: 5.14). During the green revolution pulses did not get enough policy importance and their production decline

154 continuously. But in 2007-08 they again get the policy focus and under NFSM effort are done to increase the productivity of pulses in low productivity areas. This is the reason during the period from 2001-02 to 2012-13 the area under pulses registered the growth of 1.2 percent and productivity of pulses rise with rate of 2.3 percent per annum. If we take this scenario continue the pulses production will be around 23.71 million tons in 2020-21, 28.20 million tons in 2025-26 and 33.54 million tons in 2030-31. The total food production of the country will be around 271.32 million tons in 2020-21, 288.44 million tons in 2025-26 and 305.56 million tons in 2030-31 (Table: 5.14). Table: 5.14 Supply Projections of Food Grains (million tons) Crops Methods 2015-16 2020-21 2025-26 2030-31 Rice I 105.02 111.44 117.87 124.29 II 104.76 112.31 120.40 129.07 Wheat I 93.28 100.90 108.52 116.16 II 96.92 106.96 118.03 130.25 Coarse Cereals I 41.32 44.04 46.75 49.47 II 43.95 47.63 51.62 55.95 Pulses I 16.71 17.7 18.62 19.67 II 18.72 20.05 21.48 23.01 Cereals I 237.48 253.61 269.74 285.87 Food grain I 254.2 271.32 288.44 305.56 Source: Calculation based on data from various issues of Agriculture Statistics at Glance. 5.5 Future Food Security Situation: Comparison of the projected demand for food grains for 2015-16, 2020-21, 2025-26 and 2030-31 with their corresponding forecasted supply (domestic production) will provide an estimate of the possible future surplus or deficit. The future surplus and deficit situation is predicted by taking average of demand and supply projected from all scenarios. Figure: 5.3 and 5.4 show that there will be surplus situation for two main cereals rice and wheat. In case of rice the surplus

155 ranges from 13 million tons to 16 million tons in 2020-21, 16 to 19 million tons in 2025-26 and 14 to 19 million tons in 2030-31. In case of wheat the surplus will ranges from 10 million tons to 14 million tons in 2020-21, 5 to 12 million tons in 2025-26 and 13 to 17 million in 2030-31. Figure: 5.3 Future Demand and Supply of Rice Source: based on Table 5.8 & 5.14 Figure: 5.4 Future Demand and Supply of Wheat Source: based on Table 5.9 & 5.14 Figure: 5.5 show the situation of pulses in coming decade in India. The analysis shows there will be deficit of pulses production. The green line in figure shows the pulses demand based on absorption approach and red line shows the

156 demand projection based on normative approach. The normative approach gives the minimum requirement of pulses, to maintain the healthy life. Pulses are the key of nutritional security of India. Still India s pulses absorption is very low to recommend diet. This analysis shows that despite the fact India is the largest producer of pulses; it has to depend upon the import of pulses. The deficit of pulses will be around 20 million tons based on the normative approach and 3 million tons according to absorption approach in 2030-31. Figure: 5.5 Future Demand and Supply of Pulses Source: based on Table 5.12 & 5.14 Figure: 5.6 Future Demand and Supply of Coarse Cereals Source: based on Table 5.10 & 5.14

157 Figure: 5.7 Future Demand and Supply of Cereals Source: based on Table 5.11 & 5.14 Figure: 5.8 Future Demand and Supply of Food Grain Source: based on Table 5.13 & 5.14 Figure: 5.6 presents demand and supply balance of coarse cereals. The coarse cereals used for dual purpose food and fodder as well. After green revolution period the coarse grains lost area on the account of declining demand due to change in food habits. However, coarse grain uses has increased feed and fodder use in livestock sector. The figure: 5.6 shows surplus in coarse grain production. But it can be possible

158 with the increasing importance of livestock sector; there can be increase in coarse grain demand, which can create stress on surplus of coarse cereals. The cereals supply and demand balance is shown in Figure: 5.7. In case of cereals the surplus ranges from 12 million tons to 25 million tons in 2025-26, 14 million tons to 25 million tons in 2025-26, this surplus can be around 30 million tons in 2030-31. In case of food grain India will remain self-sufficient and food surplus will range around 20 to 30 million tons in 2030-31. These trends suggest that managing the projected growth in surplus rather than managing any deficit is likely to be the bigger policy challenge for India in the future, especially in the case of rice and wheat. According to the expenditure estimates by NSSO, the share of cereals in total food expenditure is declining with the increase in income. The share of cereals expenditure comes down to 12 percent in rural area and 7.3 percent in urban area in 2012-12 from 24.2 percent and 14 percent respectively in 1993-94. On the other hand the share of livestock products and edible oil is increasing. In case of edible oil India is net importer. This makes a case for diversification of agriculture. With declining cereal demand and in case of cereals production India will remain self sufficient, so there is need to focus more on pulses production and horticulture products. 5.6 Haryana: Future Supply of Food Grains: Haryana is being the granary of country; play important role in securing food self sufficiency. Haryana almost cover 3 percent area of country under total food grain production and contribute around 7 percent of food grain. The major contribution of state is in terms of rice and production. Haryana contribute around 4 percent of rice and 11 percent of wheat in national production. In case of procurement of wheat and rice the Haryana share is around 6 to 7 percent for rice and around 25 percent for wheat. Thus Haryana is the key state, which holds the foundation of country food security firm. After estimating future supply for country in this section we will estimate the future supply of wheat and rice of Haryana. Table 5.15 provides the future wheat and rice supply scenario in Haryana. The first method project the supply by extrapolating the past production trend, the second

159 method based on area and yield growth rates. Analysis in chapter three shows that area under most of food grain production in Haryana reached to plateau and there is very minimal possibility to increase production by raising the area. So, the method three assume constant area and supply projection is made assuming that there will be only increase in yield rates. The table shows that the production of rice will be remain 4 to 5 million tonnes in 2030-31 and the share of Haryana in total rice production remain consistent around 3 to 4 percent. The production of wheat reached to 20.9 million tonnes in 2030-31, if the growth observed from 1991-92 to 2012-13 will remain continue i.e. 1.8 percent per annum for area and 1.3 percent per annum for yield. If there is no further increase in area than the wheat production will be around 15.88 million tonnes in 2030-31. The share of Haryana in wheat production will be remain stable around 12 percent. The yield growth will be key to increase in future production of food grains. But the yield growth of rice and wheat are not so robust for Haryana. The analysis in chapter four shows that because of inherent structural constraints the food grain production in other states is low. So Haryana and Punjab region will also hold important place in future food grain self-sufficiency. Stagnation in yield growth rates is cause of concern which requires extra efforts on policy and research front. Table: 5.15 Future Rice and Wheat Supply of Haryana Year Rice Wheat I II III I II III 2015-16 4.13 3.90 3.80 12.53 13.2 12.33 2020-21 4.62 4.38 4.01 13.76 15.41 13.42 2025-26 5.11 4.9 4.24 15 17.6 14.60 2030-31 5.60 5.5 4.47 16.21 20.9 15.88 Source: Calculations based on the data from various issue of Statistical Abstract of Haryana

160 5.7 Conclusion: This chapter examined the future demand and supply of food grains and the scenario of food security in the coming decade. After reform period the annual per capita net availability of food grains has been falling steadily. The five year moving average of per capita net availability of food grains from 1991 to 2012 declines every five year without exception from 186.2 kg/per year in 1991 to 164.2 kg/ per year in 2012. The cereal per capita availability declined from 171 kg/ per annum in 1991 to 149.1 kg/ per annum in 2012. The food inflation also witnessed rising trend in recent decade because of increasing population pressure and supply bottlenecks. This make a case to study the future demand and supply situation of food grains to ensure food security of country. According to normative approach based on the recommended diet by the national institute of nutrition the demand for food grain will range from 212 million tonnes to 252 million tonnes in 2015-16 based on different life style. In 2030-31 the demand for food grains will range from 244 million tonnes to 290 million tonnes. The demand projection based on absorption approach showed that the food grain demand will be range from 271 million tonnes to 287 million tonnes in 2030-31. The supply of food grain for this time period will be around 305 million tonnes. if the demand and supply balance of individual food crops is considered, there will be a surplus in case of wheat and rice. The surplus in case of rice in 2030-31 will range between 14 to 19 million tonnes and 13 to 17 million tonnes for wheat. In case of coarse cereals there will also a situation of surplus. But in case of pulses, which is the major source of nutrition the huge deficit is noted. The gap between demand and supply of pulses will be around 20 million tonnes in 2030-31. The contribution of Haryana will remain consistent in wheat and rice production of the country. In the nutshell managing the projected growth in surplus rather than managing any deficit is likely to be the bigger policy challenge for India in the future, especially in case of rice and

161 wheat. There is need to focus more on pulses production which is the need of the day. Every possible effort need to be made for efficient implementation of NFSA 2013 which requires the role of all the stakeholders of food security of India.

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