The Reserve Bank of India (RBI) today said growth in foodgrain production has been achieved on the back of increased productivity but asserted that the momentum needs to be sustained to ensure food security.
The central bank also pointed out the country's needs to attain self-sufficiency in pulses and oilseeds.
"The increased agricultural production in recent years has been mainly due to improvement in productivity, while the area under cultivation has remained more or less constant for major crops. With a view to ensuring food security to the growing population, productivity gains need to be consolidated and sustained," the RBI said in its second quarter review for 2011-12.
The apex bank emphasised that the country's needs to produce surplus food for long-term food security.
It said the current foodgrain stocks was "sufficient" to meet the demand for various welfare schemes under the public distribution system (PDS), but pointed out that the requirement would increase with implementation of the proposed Food Security Act.
"...Larger coverage and enhanced entitlement under the PDS, as envisaged under the proposed National Food Security Bill, may necessitate additional procurement. This would require creation of additional storage facilities," it said.
Quoting the National Sample Survey Office (NSSO) survey, the RBI said there has been a structural change in food consumption pattern towards protein-rich food items, both in rural and urban areas. Simultaneously, the share of cereals in food has declined.
"A situation when the demand for high value items such as meat and fish, eggs, fruit and vegetables is rising faster than supply, calls for an overhaul of the entire supply chain mechanism," it said.
The development of vegetable clusters and terminal market complexes under the public-private partnership model is a significant step which holds immense potential for better post-harvest management and price discovery.
The apex bank said effective implementation of the model Act was necessary for developing a nation-wide agricultural market.
"The model Agriculture Produce Market Committee [APMC] Act allows for contract farming and markets in private/ cooperative sectors. So far, 17 States/Union Territories have amended their APMC Acts and the rest are in the process of doing so."