India has to raise wheat output to 111 mt by 2020 2009-08-27 10:35:00
NEW DELHI (Commodity Online): In recent times wheat has been India’s saviour on the foodgrains front thanks to record production and procurement by government agencies which has helped contain inflation.
According to news reports government plans to release 3 million tonnes of wheat in the open market to contain prices with wheat stocks currently at 31.62 million tonnes. The current yearly production is 76 million tonnes
According to latest data, India has procured 25.13 million tonnes of wheat in 2009/10 marketing year that began in April, up from 22.6 million tonnes in the previous year.
But all is not rosy for wheat according Associated Chambers of Commerce and Industry (ASSOCHAM) which cautions that India needs to maintain compound average growth rate of production at 3.09% for next 10 years so that India achieves a target of 111 million tonnes of wheat by 2020.
In a report titled Wheat Outlook for India, ASSOCHAM said while current level of wheat production stands about 76 million tones which is sufficient to meet present demand but there is a dire need to take it CAGR at over 3% in order to meet growing demand of wheat for next decade. Current growth rate of wheat production is around 1.6%. Explore Commodity Online Mobile Services
Releasing the Wheat Outlook, ASSOCHAM President, Sajjan Jindal said, “on the price front, since the cost of production is rising with steep increase in cost of inputs viz. fertilizers, energy etc., the government would be under heavy pressure to increase the minimum support price in future. In the last two years, it has increased by 43%.
With open market prices fetching a premium of 10-20% over government procurement price, rise in wheat prices seems inevitable as global surge in wheat prices too add to strengthening sentiments.
It is also seen that wheat yields in Punjab and Haryana has been showing a declining trend. Besides faster seed replacement, soil salinity/fatigue, excessive pesticide residues, depleted ground/canal water supply etc. need to be effectively addressed, feels the Chamber.
Global warming and climate change is expected to adversely affect wheat production in India. Any plan and program therefore should factor the impact of climate change on yield of wheat. The report has further warned that 0.50C increase in winter temperature would reduce wheat yield by 0.45 tonne a hectare.
Jindal said that globally wheat consumption is expected to go up due to population increase and growing affluence in China and India the two most densely populated Asian nations, where the consumption pattern is seen changing with a gradual shift from rice to wheat usage, besides poultry and meat products consumption.
The Chamber has stressed the need for a comprehensive grain policy to address the needs and challenges right from expanding area to all aspects of agriculture, research and marketing. Instead of the present ad-hoc approach, an evolving agricultural and grain policy will lead to a second green revolution.
Given the inherent nature of the business of agriculture, the associated risks are numerous and which continue to haunt the growers. For any economic activity, the risks should adequately covered so that focus could be on building the underlying activity. The risks could be defined in pre-harvest, seed quality, weather, financing options, price, post harvest, productivity,, storage facilities and price (for selling the produce).
The prime need of the hour is to increase the yield, given the constraint on land availability and shifting acreage from intensely competing crops. All research efforts should be focused on achieving higher yields coupled with adaptability to changing weather. Breakthrough in high yielding seeds, new irrigation techniques to conserve water resources and depleted soil management is the need of the hour.
The Wheat Outlook also emphasized to integrate commodity market activites including spot markets, regulated markets, futures market etc. so that the participants i.e. both producers and trade participants are able to realize the best price and have ready access to market information/data.
