Industry
Mint Explainer: With food security in focus, how do India food stocks stack up?
Summary
- Although experts foresee a marginal drop in rice production this year, food security is not an immediate worry given that the government has banned exports of non-basmati white rice and broken rice and undertaken other measures
As food prices soar, particularly those of staples like rice and wheat, the central government has implemented various strategies to mitigate food inflation. The measures encompass open market sales of wheat and rice, setting stockholding limits, and prohibiting exports of non-basmati white rice. Yet, there has been no let up in food prices.
Data from the Consumer Affairs ministry's price monitoring division reveals that retail prices for wheat and rice have surged roughly 7% and 11.3%, respectively, from July 2022 to July 2023. Mint delves into how the government, via the Food Corp. of India (FCI), is bolstering food reserves, emphasizing food security.
Q. What is the status of food stocks from central pool?
As on 8 August, the government had nearly 28 million tonne of wheat and 24.6 million tonne rice in the central pool, including quantities in transit, totalling 52.7 million tonne of food grains. This compares to the buffer stock norm of 308 million tonne as on 1 October.
The FCI requires 36 million tonne of rice and 18.5 million tonne of wheat in a year for allocation under the National Food Security Act (NFSA). Considering the requirement, the country has stocks for a little less than one year.
Also, the government on Wednesday announced that it will offload an additional 5 million tonne wheat and 2.5 million tonne rice under the open market sale scheme (OMSS).
Rice stocks, however, will see an upswing with fresh procurement following paddy harvest which will begin on 1 October.
Q. What is the outlook for Kharif crops in 2023-24 (July-June) crop year?
After the monsoon current picked up pace in July, bringing rains to north, northwest and central India, sowing of Kharif crops has picked up. As of 4 August, farmers across India had sown crops in 91.5 million hectare, nearly 4% higher on year, including 28.3 million hectare under paddy, the most important crop of the season. Paddy sowing is 9.2% higher year-on-year.
Pulses acreage has declined 11% on year to 10.6 million hectare.
Although experts foresee a marginal drop in rice production this year, food security is not an immediate worry given that the government has banned exports of non-basmati white rice and broken rice and undertaken other measures.
However, the diversion of rice stocks for ethanol production has triggered some concerns. The government aims to allocate about 3.4 million tonne of rice held in FCI reserves to distilleries during the current ethanol year started December; of which 1.3 million tonne has already been sold till 10 July.
Q. What are the current concerns related to food production?
According to farm experts, if August sees a poor monsoon, as forecast by Indian Meteorological Department, with rains weak in September, as well, crop yields may be hurt.
In case of short duration crops such as moong and urad, which are conventionally in their harvesting stage during September, are expected to be in late vegetative growth to pod formation stage during August as sowing was delayed due to slow progress of the monsoon. Weak rains in August could impact flowering and thus yields.
Pulses, which have their sowing window in May and June, have seen a sharp decline in sown area due to lower-than-normal rainfall in June, in key growing regions of Maharashtra and Karnataka. A decline in pulses output will fuel price rise, which are already elevated. Hence, pulses inflation is a concern. Economists see pulses inflation to rise another six to seven months to reach its next peak.
National Agricultural Cooperative Marketing Federation of India is expected to intervene with supplies in the open market this month, which could bring temporary relief to consumers.
