The prospects for harvesting bumper food crops for two seasons in succession have given rise to intractable problems for the ministries concerned on the food front. It was not expected that the yield of foodgrains in the 2010-11 season would rise to dizzy heights and finally estimated that the output of all crops would be 241.56 million tonnes against only 218.11 million tonnes in 2009-10. It was not expected in the initial stages that the total output would be more than 235 million tonnes. What is noteworthy is the fact that an all time peak has been achieved even with rice yield being lower at 95.32 million tonnes against the earlier record of 99.15 million tonnes in 2008-09.
Even so procurement operations in both fine cereals, rice and wheat, had to be intensified and buffer stocks reached a new high level of 65.2 million tonnes even in June this year.
Since procurement of rice had to be intensified in the expectation of a jump in output of this cereal in the 2011-12 season, buffer stocks have been bulging as wheat procurement also has exceeded 27 million tonnes against 22.5 million tonnes out of the crop of the previous season. No precise estimates are available about the output of different foodgrains in the current agricultural season. But it is generally expected that the total output in the kharif and rabi seasons will be around 250 million tonnes with the content of the rice crop being 102 million tonnes. Wheat crop will be higher at 87-88 million tonnes as compared to 85.93 million tonnes in 2010-11.
Bulging buffer stocks
Apart from the fact that procurement of rice will be around 32 million tonnes in the marketing season, which will be coming to a close by the end of this month, it is being discussed in knowledgeable quarters how procured stocks of rice out of the kharif crop for this season will be handled and buffer stocks theoretically rise to over 75 million tonnes by March next year when arrivals against new wheat crops commence. K. V. Thomas, Minister for Consumers, Food and Public Distribution, is already feeling hard-pressed to ensure the safety of bulging buffer stocks, which should be around 70 million tonnes in spite of the efforts to increase the quotas allotted to States and maximise the export of non-basmati rice. Because Thailand and other rice producing nations are maximising their exports, prices realised in world markets are on the downtrend and it has been necessary for the Ministry of Agriculture to lower the minimum price to $600 from $850 a tonne.
There was hesitation on the part of the Ministry of Agriculture to lift the ban on export of wheat since it was felt that higher world prices for this cereal might accentuate inflationary pressures within the country. But the world situation has undergone a metamorphic change and the net prices realisable are less than internal parity even though the ban on exports of wheat has been lifted.
It has been indicated that aggregate permissible exports of non-basmati rice will be three million tonnes and wheat two million tonnes. As the months and weeks pass by, storing of procured foodgrains will become extremely complicated even though it has been decided that there should be an increase in the storage space by two million tonnes in a short period.
The happenings in recent months and those likely to take place in the next eight months will be viewed with glee by those finalising plans for ensuring food security for the population.
There is no definite estimate of what will be required by the population below the poverty line and by others above this level. If net consumption of fine cereals on the basis of the experience in recent years does not turn out to be more than 170 million tonnes, the offtake by fair price shops and retail sales can be raised to 185 million tonnes, if a further raise in buffer stocks has to be obviated.
The question of bringing down buffer stocks, which are already at dizzy heights, will still remain unless exports can be increased substantially, which may be difficult of achievement. It will be appropriate at this stage to indicate how the earlier difficulties were overcome in 2000-02 and subsequently. Even with a foodgrain production of 196.8 million tonnes in 2000-01 and 212.03 million tonnes in 2001-02, buffer stocks jumped to previous peak of 64.8 million tonnes in June 2002 from 44.7 million tonnes and 37 million tonnes on the same date in the two previous years. These stocks had to be liquidated at throw away prices as internal consumption had not risen at a faster rate as in recent years.
A jump in the output of foodgrains by nearly 45 million tonnes in ten years has to be absorbed. Unless a new trend in internal consumption arises, the embarrassment to the Government cannot be easily overcome in 2011-12 and subsequent years.