Siraj Hussain Visiting Senior Fellow

ICRIER

From being a ship to mouth food economy in 1950s, India jumped to become self sufficient in most food items by 1980s

Green revolution was a success in irrigated area with use of chemical fertilisers, seeds, extension, remunerative prices and assured prices in a few states

Food grain production increased from about 50 Million Metric Tonnes (MMT) in 1950 to 272 MMT Million in 2016-17

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.019

50-5

1

1952

-53

1954

-55

1956

-57

1958

-59

1960

-61

1962

-63

1964

-65

1966

-67

1968

-69

1970

-71

1972

-73

1974

-75

1976

-77

1978

-79

1980

-81

1982

-83

1984

-85

1986

-87

1988

-89

1990

-91

1992

-93

1994

-95

1996

-97

1998

-99

2000

-01

2002

-03

2004

-05

2006

-07

2008

-09

2010

-11

2012

-13

2014

-15

2016

-17

In M

illio

n M

etric

Ton

nes

Production of Wheat, Rice and Other Cereals (In Million Tonnes)

Other cereals + Pulses Rice Wheat*2nd Advanced estimate Source: Statistics at Glance, 2016

0

5

10

15

20

25

30

35

40

1950

-51

1952

-53

1954

-55

1956

-57

1958

-59

1960

-61

1962

-63

1964

-65

1966

-67

1968

-69

1970

-71

1972

-73

1974

-75

1976

-77

1978

-79

1980

-81

1982

-83

1984

-85

1986

-87

1988

-89

1990

-91

1992

-93

1994

-95

1996

-97

1998

-99

2000

-01

2002

-03

2004

-05

2006

-07

2008

-09

2010

-11

2012

-13

2014

-15

2016

-17

In M

illio

n Ba

les

Cotton Production (In Million Bales)

*2nd Advanced estimate Source: Statistics at Glance, 2016

0.0020.0040.0060.0080.00

100.00120.00140.00160.00180.00

1960

-61

1962

-63

1964

-65

1966

-67

1968

-69

1970

-71

1972

-73

1974

-75

1976

-77

1978

-79

1980

-81

1982

-83

1984

-85

1986

-87

1988

-89

1990

-91

1992

-93

1994

-95

1996

-97

1998

-99

2000

-01

2002

-03

2004

-05

2006

-07

2008

-09

2010

-11

2012

-13

2014

-15

2016

-17

In M

illio

n To

nnes

Milk Production (in Million Tonnes)

Source: Source: NDDB, FAO,USDA, Dept. Of Animal Husbandry, Dairying & Fisheries

0

50

100

150

200

250

300

In M

illio

n To

nnes

Production of Fruits and Vegetables (In Million Tonnes)

Vegetables Fruits

Note: Vegetables include Melons, Roots and Tubers and Fruits exclude melons Source: FAOSTAT 2016

0.000

0.500

1.000

1.500

2.000

2.500

3.000

3.500

4.00019

61-…

1963

-…

1965

-…

1967

-…

1969

-…

1971

-…

1973

-…

1975

-…

1977

-…

1979

-…

1981

-…

1983

-…

1985

-…

1987

-…

1989

-…

1991

-…

1993

-…

1995

-…

1997

-…

1999

-…

2001

-…

2003

-…

2005

-…

2007

-…

2009

-…

2011

-…

2013

-…

2015

-…

In M

illio

n To

nnes

All India Poultry Meat Production (In Million Tonnes)

Source: FAOSTAT 2016

0.0010.0020.0030.0040.0050.0060.0070.0080.0090.00

100.0019

80-8

1

1982

-83

1984

-85

1986

-87

1988

-89

1990

-91

1992

-93

1994

-95

1996

-97

1998

-99

2000

-01

2002

-03

2004

-05

2006

-07

2008

-09

2010

-11

2012

-13

2014

-15

2016

-17

In B

illio

n N

os.

Egg Production (In billion numbers)

Source: Department of Animal Husbandry, Dairying and Fisheries

Tendulkar Committee estimated 21.9 per cent population was poor (2011-12)

World Bank (2015) estimated 12.4 per cent poverty ratio at 1.9 USD per day for 2011-12 (PPP 2011)

Differences in estimates due to various reasons including recall period

Any hint of food inflation beyond 5% attracts action from Govt as it hits the poor

Export of essential food items is discouraged when inflation/expectation is high

Average land holding size 1.16 ha Small and marginal farmers (up to 2 ha) occupy 44% of

operational area And the plots held by farmers may not be at one location Most of small farmers do not have access to bank credit These farmers are poorly placed to make required

investments in farming

India has only marginal surpluses in most agri-products. Aggregation from small and marginal farmers is cumbersome

and expensive Corporate agriculture is completely missing from Indian scene

except for plantation crops Infrastructure for aggregation, assaying, storage and

movement is rather poor to allow large exports from producing areas

Uncertainty about Govt policies discourages private investment in value chain

26.5

13.5 6.0

42.4 37.8

2.6 15.9

24.3

0

5

10

15

20

25

30

35

40

45

US$

Bn

18 years of Indian Agri-trade

Trade surplus Agricultural Exports Agricultural Imports

Source: FTPA, MoC&I

Rice 6 billion Marine products 5.8 billion Meat & Preparations 4 billion Cotton 1.99 billion

Declining under-ground water level in most productive regions

52% of agriculture is rain-fed 78% of water resources used for agriculture 60% of irrigation water used for rice and sugar cane Punjab and Haryana-major rice exporting states are in acute

crisis of under ground water When policies on free electricity and water reflect the true

economic cost of water, production of rice will go down in north-west India

Restrictions were imposed in 2017 on trading of animals in markets

Fear of violence also contributing to reduced trade Incentives for setting up integrated cold chains for meat

withdrawn Exports are stagnating at about 4 billion USD for several years

Exports of several commodities regulated through quotas, duties, minimum export prices, bans

During FY 2002 to FY 2015, wheat and rice faced quantitative restrictions, Minimum Export Prices (MEPs), bans on future trading and exports

Cotton export restricted through export duty and bans Export of pulses banned for several years Potato and onion subjected to MEP and bans in several years Edible oil exports restricted to small packs and in limited

quantity

Essential Commodities Act, 1955 empowers Govt to regulate prices, supply, distribution

Seven essential commodities are listed but food-stuffs cover every thing used as food

Govt can impose stock limits, movement restrictions, MEPs, controls on future trading and even complete bans on exports

Private sector fearful of criminal action so it is reluctant to invest in value chains

Any hint of excessive price rise can attract action under EC Act and

Increase export from 30 billion USD to 60 billion USD by 2022 Set up export centric clusters Promote value added exports Certain items identified as having high export potential ◦ Shrimps and meat ◦ basmati rice ◦ bananas, pomegranate, vegetables including potatoes ◦ cashew ◦ medicinal herbs, herbal medicines ◦ Nutraceuticals ◦ aromatics, spices (cumin, turmeric, pepper) ◦ ethnic & organic food

Items identified as essential will continue to be subject to export restrictions like MEPs and bans

Processed and organic products will be exempted from any restrictions on exports

The policy may also exempt items identified as non-essential food products from export restrictions

Items considered sensitive for food inflation will continue to invite restrictions on trade and export

Major items of current agri-export basket are under threat due to ground water depletion and restrictive domestic policies

Export clusters may be successful if high class infrastructure in built and trade policies remain predictable and stable

Key to exports lies in domestic policies on subsidies, trade and infrastructure

India unlikely to pose any serious threat to dominant players on global scene