Despite high price and demand, farmers not interested in maize

The domestic kharif maize output, which stood at nearly 20 million tonnes in 2017-18, dipped last year to below 19 MT

Growing corn consumption, coupled with remunerative market prices over the past few months, has not yet translated into higher maize acreage during the 2019-20 cycle, initial trends in the current kharif season suggested.
 
According to a preliminary report on kharif sowing on Friday (June 14), the area brought under maize crop during the week stood at only 300,000 hectare across India — 33 per cent lower compared to the corresponding acreage in 2018 at 4,50,000 hectares, which was the steepest among kharif crops like paddy, pulses, oilseeds and sugarcane.
 
Since domestic maize/corn prices had witnessed a record high of Rs 2,300 per quintal (100 kg) two-three months ago over short supply following crop loss, in addition to growing demand by the poultry sector for feedstock, it was expected that the area under crop would see an upsurge with farmers looking to encash the spurt in demand and market potential.
 
Last year, the Centre had increased the minimum support price (MSP) for kharif maize by Rs 275 per quintal or 20 per cent from Rs 1,425 per quintal to Rs 1,700 per quintal for 2018-19.
 
Sudhir Panwar, president of farmers’ advocacy group Kisan Jagriti Manch and former member of UP Planning Commission, told Business Standard maize is still considered by farmers as a feedstock crop and that the MSP is at best competitive to other kharif crops, including paddy and pulses, which does not offer many incentives to farmers to adopt its cultivation as a staple crop.

 
“The higher market price of maize over the past few months was a windfall, which does not guarantee continuity. Besides, farmers are not convinced about the market demand, the sustainability of the MSP structure and formalisation of the maize economy. There is a need to create awareness among farmers if the government is serious about increasing maize production,” he said.
 
The domestic kharif maize output, which stood at nearly 20 million tonnes (MT) in 2017-18, dipped last year to below 19 MT. Currently, nearly 60 per cent of the domestic maize production goes towards poultry and feed, and 20-25 per cent is diverted towards the production of industrial corn starch.
 
Owing to short supply, the Centre recently allowed state-run trading entities — NAFED and MMTC — to import 100,000 tonnes (50,000 tonnes each) of corn in 2019-20 at a lower 15 per cent import tax (against 60 per cent import duty), after the commodity prices jumped in anticipation of possible drought conditions in major maize-producing states.
 
Corn import to the tune of 2,25,000 tonnes was last allowed in 2016 under the tariff rate quota (TRQ) at 0 per cent duty. Karnataka, Andhra Pradesh, Tamil Nadu, Rajasthan, Maharashtra, Bihar, Uttar Pradesh, Madhya Pradesh, and Gujarat account for 85 per cent of India's maize production.
 
Sahyadri Starch and Industries Managing Director Vishal Majithia said that domestic maize prices would rise over the next two-three months over tepid availability. “Currently, we have to pay Rs 2,200 for a bag (100 kg) for the supply of corn from Bihar to Maharashtra,” he noted, adding that nearly 70 per cent of maize produced in Bihar had already been consumed by industry.

Crop matrix
 

• Maize logs steepest fall in sowing among kharif crops last week
• High market price and demand fails to enthuse Indian farmers to grow maize
• The Centre allows import of 100,000 tonnes of feed-grade maize by state-run trading firms
• Industry expects maize prices to jump in coming months over supply constraints
• Industry pegs maize market prices at as high as ~2,200 per quintal (100 kg)