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Indian Foodgrain Sector: Prospects and Challenges

Indian Foodgrain Sector: Prospects and Challenges. Ashok Gulati and Shweta Saini (Chair Professor and Consultant, respectively) Indian Council for Research on International Economic Relations (ICRIER) NCAER Workshop on ‘Medium Term Outlook for India’s Food Sector’ ,

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Indian Foodgrain Sector: Prospects and Challenges

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  1. Indian Foodgrain Sector:Prospects and Challenges Ashok Gulati and Shweta Saini (Chair Professor and Consultant, respectively) Indian Council for Research on International Economic Relations (ICRIER) NCAER Workshop on ‘Medium Term Outlook for India’s Food Sector’ , June 26, 2014. New Delhi

  2. Looking back: Grain Production(up from 176.4 mt in 1990-91 to 264.4 mt in 2013-14)

  3. Closer look: Wheat and rice both going strong since 2000-01

  4. Closer Look: Revolution in Maize; Pulses breaking new grounds

  5. Grain Stocks: Overflowing!

  6. Cereal Exports: Record breaking!

  7. What about domestic demand? Cereals losing out in the Consumption basket

  8. Futuristic Scenario • Depends on Technology & delivery systems • Our productivity levels in rice, wheat and maize still way below what current technology can provide • Challenge of delivering good seeds and farming practices • Investments in irrigation will have large pay offs • Incentive Structures: • Tilted towards wheat and rice through MSP regime • Broadly following global prices with some time lag

  9. Price Incentives: Domestic and Global Cereal Price IndicesGlobal Transmission WPI- Cereals above is calculated for Rice, wheat and Maize only as the FAO Cereals’ Index comprises of these

  10. Future Projections: Many studies in the past had forecast India to be a large importer of grains…will they prove right? Some notable ones are: • Bhalla, Hazell and Kerr (1999): India will import 64-115 mt of grains by 2020 • Planning Commission (GoI, 2006): demand-supply deficit of 10 mt by 2011-12 • Binswanger, Parikh, et.al (2011): could be 70 mt of imports by 2039

  11. Supply-demand gap in 2010/2011-12 (mt)

  12. Supply-demand gap in 2020/2020-21(million tonnes)

  13. 12 Five Year Plan Projections for DD-SS

  14. Grain demand for feed … • A big unknown? Poultry-corn-soya showing trends • How far will poultry and dairy go to demand grains as feed? Will structural transformation in dairy and poultry sector trigger this demand? 20? 30? 40? 50mt? in the next 10 years • Currently shortage of fodder (dry, green) about 40% • Will today’s exports of oilmeals be feeding our cattle tomorrow?

  15. So, how does the future look like? • Next 5-10 years, ample scope to raise productivity and production of grains for food and feed… question of right incentives and investments… • India will keep feeding itself in cereals, except for some occasional dips caused by bad weather • Will remain dependent on imports for edible oils unless some major policy decisions are taken to turn around (oil palm on one million hectares)…

  16. Feeding for Meat: Issues to ponder…India 2nd largest exporter of beef (buffalo) • Live to dressed, how many years/decades? • From road side slaughterhouse/vendor to organized systems…when will food safety concerns drive it? Any lessons from dairy? • Of legs and breasts! When will cut legs start pouring in? (import duty 100% in 2014)

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