'Wheat imports raise question about India's self-sufficiency'

New Delhi, July 23 (UNI) Resumption of wheat imports by India after a gap of six years, owing to stagnation in cereal production allied with mismanagement of the food economy, has raised doubts about India's self-sufficiency.

According to the Delhi-based National Council of Applied Economic Research (NCAER), the present situation does not reflect well on the overall management of food economy in the country when exactly four years ago, the godowns of Food Corporation of India (FCI) were overflowing with stocks touching 63 million tonnes.

But increased off-take of cereals from Public Distribution System (PDS), launch of various welfare schemes and fall in wheat procurement level led to significant decline in wheat stocks to 2 million tonnes on April one, 2006 against the buffer stock norm of 4 million tonnes.

Matters were not improved by lower than projected output and hardening of open market process as also the belated hike in bonus on minimum support price.

Noting that questions were being raised among the general public about India's self-sufficiency, the NCAER states that the situation has arisen due to shift in cropping patterns, changing consumer preference and crop subsititution.

Crop substitution from coarse cereals towards commercial crops like oil seeds, cotton or superior cereals has been the fallout of the tardy process of technological change in pulses and coarse cereals. Indeed, India is a regular importer of pulses as there has been little improvement in the production of both coarse cereals and pulses during the past two decades.

In the 1980s, both rice and wheat witnessed fairly high rates of growth because of improved productivity. But in the 90s -- over the Ninth and Tenth Plan periods -- the situation changed with fall in area devoted under these crops and drop in productivity growth affecting the overall availability of foodgrains in the conomy.

After peaking during the three years ending 1996-97, a declining trend was witnessed.

The gap in wheat supplies was aggravated by gradual decline in wheat procurement from 20.6 million tonnes in 2001-02 to 16.8 million tonnes in 2004-05 to 14.8 million tonnes in 2005.

Though buffer-stocking norms for wheat for July 1 was 14.3 million tonnes, it had not been met despite imports of about 3.5 million tonnes.

On the reaction of ban on imports of pulses and reducing import duties on wheat, the NCAER says that import duty of the grain should have been reduced much earlier to force private traders to de-stock in the open market. Now, however, they will be able to wait until the intended imports actually land on Indian shores.

Ahead of the 11th Five-Year Plan, the present situation has only underlined the need to re-examine the approach adopted in setting targets and raising the foodgrains output.

"Productivity growth needs to be supported through investment in irrigation, water management and improvements in varieties, stopping of ecological degradation and a greater balance in input use," it suggests.

For managing the food economy there was a need to reform the process of procurement, holding of stocks and running the PDS.

Noting the vast scale of domestic consumption, future food policy reforms required involvement of the private trade and a more responsive trade policy regime to avoid such crises in the future, it adds.

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