Prospects for staple commodities production
Source: Flickr, IFPRI SAO

Recent reports have covered the latest movement of prices for staple grains in the country. The new country brief published by FAO notes that all major cereal production seems to be on recovery compared to last year. However, farmers have encountered problems in buying inputs due to demonetization. To meet this need, the government has extended special support in farm credit as well as crop insurance.

The FAO report notes that early prospects of winter wheat are positive, given strong monsoon rains that favored planting. The area sown in wheat area is twelve percent larger than it was a year ago and is projected to result in yields five percent greater than the 2015 level, according to government estimations. However, despite these favorable yield predictions for 2017, Reuters reports that wheat stocks as of April this year are expected to be at a ten-year low due to previous droughts. As a result of these low stocks and increased domestic demand for feed and starch, exports are forecasted to be lower than last year and at around 30 percent below the five-year average. FAO and Reuters report that prices of wheat have been on the rise, which has motivated the Government to eliminate import duties on wheat and distribute the commodity through the Open Market Sale Scheme. Imports for the next two years are expected to be 6 million tonnes (40 percent higher than current amounts).

Rice production is estimated to be three percent higher than the 2015 levels for the Kharif paddy crop. With the addition of the secondary Rabi crop to be harvested in March, estimates of rice imply a three percent recovery from last year’s output which was affected by drought. Rice exports are registered to be 10 percent lower due to smaller foreign demand and a decline in availability. Prices of rice have remained stable and even decreased at the end of the year, given the domestic production.

Maize output forecast is 20 percent higher than last year, due to sowed area expansion as well. Maize exports are projected to recover with a doubling from last year’s amounts, but still not enough to surpass the five-year average.

FAO’s brief notes that overall food security is satisfactory due to several assistance and distribution programs, especially the implementation of the National Food Security Act. The losses provoked by heavy rains during the monsoon season were concentrated in the northeast of the country, and affected 6 million people (less than if the rains had been more widespread).

Despite this, Reuters reports that the government-run Food Corporation of India needs to have 7.5 million tonnes of wheat to distribute it among more than 800 million poor people. Representatives of the organization have expressed concern about the low stocks and making arrangements for the acquisition of imports to supplement the national production.

A November brief by the World Food Programme described the programs implemented with the Government under the Country Strategic Plan 2015-2018. Under this plan, three safety nets for food security are supported: The Targeted Public Distribution System (TPDS), covering more than half of the Indian population; The Midday Meal Scheme (MDMS) that provides to 120 million children of ages between 6 and 14 years; and the Integrated Child Development Services (ICDS) for pregnant and nursing women and children below age six.

State governments are being directly included in these strategies, such as Odisha and Kerala. In Odisha, the automation of the Fair Price Shops through TPDS initiative has started as well as fortification of school meals under MDDS and baseline data is being collected to evaluate results. The automation implies that a ration card will include biometrics to ensure proper targeting of the project and tracking of results. Associated with the MDDS efforts, these will include also real time tracking through a messaging application, to ensure the proper and uninterrupted distribution, involving teachers, helpers, cooks and school administration. In Kerala meal ration distribution for fortification of children under the age of three, with the support of ICDS is being implemented, with the respective baseline data collection as well.

Written by: Flor Paz

Photo credit:Flickr, IFPRI SAO