Statsguru: Why wheat production has been a cause for concern in India

Data released by the agriculture ministry last week showed that India might beat the target for food grain production in 2021-22. The fourth advanced estimate, released by the ministry, indicated that rice production is expected to touch an all-time high of 130 million tonnes in 2021-22—a 4.8 per cent increase compared to last year. Rice production is expected to be 7.6 per cent higher than the target (chart 1). Pulses and cereal production is expected to touch all-time high as well (chart 2).

Wheat production, however, has been a cause for concern. Wheat production declined by 2.5 per cent compared to last year—its lowest level in three years. Compared to the target of 110 million tonnes, wheat production, as per the estimates, is expected to be 106.84 million tonnes (chart 3). Although the buffer stock has remained above the Food Corporation of India’s (FCI’s) norms, data shows the stock has reduced for wheat. In August 2022, the food grain stock available with the central pool was 26.6 million metric tonnes, lower than 56.5 million metric tonnes in August 2021 and 51.3 million metric tonnes in August 2020 (chart 4).

Procurements have also declined. Until August 15, the total procurement for the central pool for wheat was 18.8 million metric tonnes. On the other hand, rice procurement was 59.1 million MT — slightly lower than 60.2 million MT procured in 2022-23 (chart 5). It remains to be seen if the government extends the Pradhan Mantri Garib Kalyan Anna Yojana, which provides 5 kg wheat/rice and 1 kg dal to 810 million beneficiaries. An extension would mean additional pressure on both the buffer stock and the exchequer. The government, until July 12, had spent Rs 3.17 trillion on the scheme. FCI has incurred a cost of Rs 2.78 trillion, whereas the Department of Food & Public Distribution has released Rs 39,073 crore to the states (chart 6). Extension by another six months would translate into an additional expenditure of at least Rs 80,000 crore.
 

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