India's foodgrain production hits record 250 million tonnes

Foodgrains production in India is estimated to have reached a record 250.42 million tonnes in 2011-12, up 18.35 million tonnes compared to 232.07 million tonnes in the previous year.

Wheat production is expected to have reached a record 88.31 million tonnes, pulses 17.28 million tonnes and cotton 34.09 million bales (of 170 kg. each) this year, as per second advance estimates of crop production released on Friday.

Total production of rice in the country is estimated at 102.75 million tones, which is an all-time record.

The record foodgrain production, resulting from the significant increases in the production of rice and wheat, has helped production levels to breach the target of 245 million tonnes fixed for the year.

The estimated production of foodgrains for the year is also higher by 5.64 million tonnes compared to the record foodgrain production of 244.78 million tonnes achieved last year.

Production of pulses and oilseeds is estimated at 17.28 million tonnes and 30.53 million tonnes, respectively.

Production of cotton, estimated at 34.09 million bales (of 170 kg bales), is also a new record.

Sugarcane production is estimated at 347.87 million tonnes, which is higher by 5.09 million tonnes compared to last year.

Minimum Supprot Price (MSP) for kharif crops for 2010-11

MSP for pulses has been raised substantially over the MSP for the last season. This is expected to encourage farmers to invest in pulses production. Among other crops, MSP for paddy has been raised by Rs. 50 per quintal.

Open market sale price for grain reduced

Following the lukewarm response to its Open Market Sale Scheme (OMSS), which is meant to offload excess grain stocks held with the Food Corporation of India (FCI) and state agencies to bulk buyers and small traders, the government has decided to reduce the price of grain offered under the scheme.

Henceforth the government would sell grain, mainly rice and wheat, to bulk buyers at a price calculated on the basis of purchase price for the FCI (the minimum support price offered to farmers) and half of the cost of freight from Ludhiana to the purchasing locations.

Earlier, the OMSS prices included the cost of purchase for the FCI and actual freight cost from Ludhiana. “Because of bumper production and sufficient stocks with FCI, the market price for all grain is below the OMSS price, leading to a lower offtake under the scheme,” said an FCI official.

Under OMSS, the government had allocated 1.2 million tonne wheat to bulk buyers such as floor millers during April-September this year. However, it could sell only 60,881 tonne till now and since last August, there are hardly any buyers for OMSS wheat.

“We will offer a lower rate for wheat under OMSS and an empowered group of ministers (EGoM) would decide the price during the next few weeks,” KV Thomas, Union food minister, had told FE in September.

“At present, while wheat under OMSS is offered at R1,158 per quintal, the prevailing market price is well below the price offered under the government scheme,” said a Delhi-based trader.

The extra allocation of wheat under OMSS to states for retail distribution has also not taken off. Against the allocations of close to one million tonne wheat during April-September 2011, states have lifted only 82,677 tonne.

According to the latest stock position with FCI and state agencies at the start of this month, the government has total grain stocks of 51.7 million tonne against the buffer stock and strategic reserves norm of 21.2 million tonne. The FCI and state agencies have a wheat stock of 20.3 million tonne and rice stock of 31.4 million tonne.

OMSS was launched in 2008-09 to sell excess wheat stocks in the open market. However, it has mostly failed to attract a large number of buyers due to the high price offered when compared to the market price.

In a bid to cut down on the cost involved in physical tendering, the FCI has been using the National Spot Exchange Limited platform to sell wheat under to bulk buyers under the scheme.

According to an FCI official, e-auctioning, besides reducing transaction cost, ensures quick settlement of payment and delivery, in turn leading to better price discovery. (Financial Express).

Kharif oilseed output may fall 4-5% on crop damage

The country’s total oilseed production this kharif harvesting season is likely to decline by four-five per cent season due to severe crop damage, especially of soybean, in major areas of Madhya Pradesh, India’s largest producing state. Against the first advanced estimate of 20.89 million tonnes (mt), given by the ministry of agriculture, the industry has pegged the total output at around 20 mt. The total oilseed output has stood at 20.85 mt last kharif season.

“We are certainly considering to lower the soybean crop estimates, though marginally, by 100,000-150,000 tonnes from the earlier estimates of 11.65 mt released on September 30, as the crop damage has been larger than expected,” said Rajesh Agrawal, spokesperson of the Soybean Processors Association of India (Sopa), an Indore-based trade body.

At major centres around Bhopal and Disa, soybean crop was severely affected due to waterlogging in fields. As a result, the yield in this region was likely to fall at least 33 per cent to 750 kg per hectare from 1,000-1,100 kg last year. Considering these, the earlier production forecast was unlikely to be met, especially for soybean, despite an increase of 1 million hectares in acreage, said Agrawal.

Not only the government, but industry trade bodies, along with other stakeholders, had earlier forecast India’s oilseed output to be bumper, setting new record this year. Traders hoped the import of vegetable oil would decline this year due to higher domestic output. But, with oilseed output estimated lower, India’s reliance on overseas import may continue, even widen, due to a sustained increase in per-capita consumption.

India imports crude palm oil from Indonesia. But, as the Indonesian government raised export duty on crude palm oil, Indian traders have increased the import of refined edible oils not only from Indonesia but also from other major destinations like Malaysia and Argentina. India imports 8.5-9 mt of vegetable oil to meet its domestic annual need of 15.5 mt.

Industry veteran Gobindbhai Patel, however, has already factored in the crop damage across all oilseed segments and forecast soybean output even lower than the industry’s estimates to 10.5-10.7 mt, against the last year’s output at 9.8 mt.

The case is somewhat similar for groundnut. Against the government estimate of 410,000 tonnes, the Mumbai-based Indian Oilseeds and Produce Export Promotion Council expects groundnut output to be 407,000 tonnes, almost the same as last year. The agency, however, estimated a 22 per cent fall in sesameseed output to 311,000 tonnes, which may be revised.

The rapidly falling acreage is set to bring down the sunflower seed output to 130,000 tonnes this summer-sown season from 140,000 tonnes last year.

“The government’s oilseed figures have always been unrealistic which vary with the figures from the trade with a wide margin. Therefore, the government’s production figures can not be relied upon. Trades always assess individual oilseed crops after visiting the field and considering all factors including post harvest management,” said Patel.

According to Naveen Mathur, associate director of Angel Broking, the oilseed output during the current kharif harvesting season beginning October may fall even below 20 mt due to crop damage in groundnut and soybean following unseasonal rainfall in the crop maturing period. (Business Standard)

India's food production expected to exceed the target in 2011-12

Agriculture and Food Processing Industries Minister, Shri Sharad Pawar, has expressed the hope that with record production in kharif and rabi seasons this year, the food production will exceed the target in 2011-12.

The Minister also stated that strategies for rejuvenating agriculture sector have been working well and the targeted 4% growth in agriculture sector would be achieved.

Shri Pawar said this in the Economic Editors’ Conference on 19th October 2011.

The following is the text of the Minister’s address:

“I am very happy to participate in this edition of Economic Editors’ Conference. It is a great opportunity for sharing with you our initiatives, successes and challenges in the field of agriculture and allied sectors. Your valued feedback will be important input to improve implementation of our existing schemes/programmes and to formulate future strategies. My office has already circulated the background note. I, therefore, have decided to limit myself to only the salient and important issues.

You are all aware that foodgrain production has reached a record level of 241.6 million tonne in 2010-11. We have also achieved highest ever production of wheat, pulses, oil seeds and cotton. Overall farm output has also achieved an impressive growth rate of 7.5% during the last quarter of 2010-11 thus helping Agriculture GDP to register a growth of 6.6 % during the year. This also makes average growth rate in current plan to be 3.2% which we could achieve under some of the worst climatic conditions like drought, un-seasonal rains, flood, frost etc. in recent past.

Monsoon 2011 has been very encouraging and our production outlook too. As per 1st Advance Estimates, Kharif 2011 production of Rice in the country is estimated at 87.10 million tonnes which will be an all time high. We are also expecting record productions in Cotton and Oilseeds this year. We hope to see a substantial expansion in crop area and to achieving record production in coming Rabi season too. We are confident that we will be able to surpass our own production record set last year.

All these give me great optimism that strategies for rejuvenating agriculture sector have been working well and we will now be able to achieve targeted 4% growth.

While the results are encouraging, we also have challenges ahead. Demand of food grain will grow rapidly in next few decades not only due to growing population but also due to rise in per capita income and various governmental interventions to ensure food and nutritional security to less advantaged people.

We have to produce more for ensuring food and nutritional security of our nation. But, this will be achieved with more competitive demand on land and water, progressive fragmentation of land holdings, degrading natural resource base and emerging concerns of climate change.

We know that increase in agricultural production would have to emanate only by enhancement in farm productivity from existing cultivated area. We have concentrated on enhancing production and productivity both by bringing in high yielding varieties, hybrids and efficient farm equipments. For this we need more investments in this sector.

We have, over last few years, been able to ensure higher investments both private and public. Gross Capital Formation (GCF) as percentage of agricultural GDP clocked 18.7% during first three years of current plan, which is significantly higher compared to 12.5% during whole of tenth plan. Simultaneously, we have been able to enhance Plan outlay substantially to reach Rs. 21, 530 crore in 2011-12.

Rashtriya Krishi Vikas Yojana (RKVY), launched in August 2007, has become the principal instrument for increasing the States’ investment in this sector. Outlay under RKVY has been substantially increased to Rs. 7,810 crore in 2011-12, which now includes several commodity specific measures namely ‘Bringing Green Revolution to the Eastern Region of India”, ‘Special Initiative for Pulses and Oilseeds’, ‘Accelerating Fodder production’, ‘Creating Vegetable Clusters’, ‘Nutri-Cereals’, ‘Oil Palm development’ etc.

Alongwith RKVY, National Food Security Mission (NFSM) has also emerged as another path breaking intervention. I take pride to mention that NFSM has already accomplished its target of producing additional production of 20 million tons within 4 years of its implementation.

With successful implementation of MGNREGA and other anti poverty programme of the Government, there is now pressure on availability of farm labour. While we are attempting to innovatively utilise MGNREGA for augmenting activities that directly add to farm productivity; for compensating scarcity of labour, I am proposing a large programme for agricultural mechanisation during 12th Plan.

Agriculture Credit plays an important role in improving agricultural production, productivity and mitigating both climatic and non-climatic risks. Our concerted effort has seen surpassing credit flow target in 2010-11 by about 19%. We are hopeful to surpass target in this year too. Similarly, price signals are an extremely effective tool for increasing agricultural production and productivity. Government has been upwardly revising MSP of major crops such as paddy, wheat and pulses at regular interval for incentivising farmers to produce more.

We all know that Animal Husbandry, Dairying and Fisheries plays significant role in supplementing incomes and generating gainful employment in the rural areas, particularly among the landless labourers, small and marginal farmers and women. It also acts as an insurance against vagaries of nature like drought, famine and other natural calamities. For sustaining growth and enhancing productivity in this sector, ICAR has initiated several special efforts namely establishment of elite herds of important buffalo breeds, diagnostic kit ‘DIVA’ for differentiating Foot and Mouth Disease Infected and vaccinated animals, characterisation of new goat breeds etc.

As a result, India continues to be the largest producer of milk in the World. Small, marginal farmers and landless labourers are majority producers of milk in India. To ensure a steady market and remunerative prices for them, about 14.08 million farmers have been brought under the ambit of about 1.35 lakhs village level dairy cooperative societies in the country.

Food processing industry is now increasingly being seen as a potential source for driving rural economy towards prosperity by brining increased farm gate prices and reduced wastages. During current plan, we are giving special emphasis on developing Infrastructure for food processing. So far projects for 15 Mega Food Parks, 49 Cold Chain and 10 Abattoir are already approved by the Ministry. Besides special focus is being given for capacity building, R&D, quality assurance and skill development with selective but active collaboration with established foreign universities etc. I take pride to inform you that Indian Institute of Crop Processing Technology (IICPT) has been fully functional for the last three years and National Institute for Food Technology and Entrepreneurship Management (NIFTEM) is coming up fast on the outskirts of Delhi at Kundli.

With a large diversified production base, coupled with modern technology and low manpower cost, the Indian food processing sector is poised for growth.

Future of Indian agriculture would be technology driven; whether be in Biotechnology or efficient mechanisation or use of remote sensing tools. ICAR through National Initiatives on Climate Resilient Agriculture (NICRA) has been creating synergy with other ongoing research projects. Its National Agricultural Innovation Project (NAIP) is helping to foster and strengthen partnerships with stakeholders’ including in Private Sector for ensuring sustainable development of Indian agriculture.

ICAR is gradually becoming a one stop destination for innovative agro-industry and entrepreneurship. AGRINDIA has been established for promoting spread and commercialisation of R&D Outcome, protecting Intellectual Property Rights (IPR) and forging partnership with Industries. A range of other business incubation and promotion efforts are helping rural youths, budding entrepreneurs and Industries.

I would like to conclude by saying that for the whole world and for developing nations in particular, development in its truest sense can only take place when economic growth fosters social equity. For this to happen we have to keep agriculture in the forefront of our nation’s developmental effort.”