India’s agricultural sector is poised to create a record production record this year. According to the second advance estimate of foodgrain production for 2021-22, released by the Ministry of Agriculture and Farmers’ Welfare last week, India’s total foodgrain production will top 316 million tonnes. . This is 1.7% more than the total production of the previous year. But what really accounts for the remarkable growth in Indian agricultural production is the strong trend over the past six years: foodgrain production has increased from 252 million tonnes in 2015-2016 to 316 million tonnes today. today; increasing every year. Compare that with the performance of the six years before 2016-2017 – production fluctuated between 244 and 265 million tonnes.
Although overall agricultural production has increased, trends diverge. Among cereals, coarse grains such as jowar, bajra and ragi are expected to experience lower production, while maize is expected to reverse the trend. With good monsoons, rice production in both the kharif and rabi seasons is expected to increase by almost 3%. Wheat production is also expected to increase by 2%. Pulses should see their production increase by nearly 6%, with the exception of tur, which is expected to drop by 7%. Oilseeds are expected to see production growth of 3.3%, driven by large increases in mustard and soybeans, offsetting lower groundnut production. Among the main cash crops, sugar cane is expected to jump by more than 4% while cotton production could decline by more than 3%.
Two policy concerns emerge from these data. First, what happens to food inflation. For example, wholesale inflation was 10.5% for wheat, 14.5% for corn, over 23% for oilseeds and 45% for cotton. While domestic production is an important factor influencing prices, government-announced minimum support prices (pulses) as well as international prices (oilseeds) for these products also have an impact on them. The combination of these factors will play out in the coming year. For example, a decline in cotton production when prices are already high will increase the raw material costs of the domestic textile industry, weakening its competitiveness. The other concern would be to ensure better remuneration for farmers. The ironic – and disturbing – aspect of India’s sustained increase in agricultural production over the past 5-6 years has been the simultaneous increase in farmers’ distress as the terms of trade have deteriorated. .
This editorial first appeared in the print edition of February 21, 2022 under the title “After the harvest”.