With predictions of a good monsoon, Planning Commission Member Abhijit Sen, has projected a robust growth rate of five per cent from 0.2 per cent in the agriculture and allied sectors in 2010-11. From the earlier estimate of -0.2 per cent last year, the growth rate has been revised to 0.2 per cent.
Dr. Sen, who is in charge of the farm and food sector in the planning commission, also said food inflation was likely to decline to 4 to 5 per cent by November.
Dr. Sen’s positive outlook is based not only on the forecast of a “100 per cent normal monsoon”’ this kharif (summer crop), but also on the “comfortable” food stock position. Rice output is expected to be over 100 million tonnes this year and wheat output is already projected at a record 80.98 million tonnes.
While agreeing that food prices were “by and large still too high”, Dr Sen said, “If the monsoon plays out well then by October (the next kharif output) we expect prices to decline and the food inflation rate to come down to 4 or 5 per cent by November. We were hopeful that prices would start to decline from March. In fact the prices of some products like onion and potato have started coming down too fast,” he told journalists after delivering the annual B.P. Pal memorial lecture at the Indian Agriculture Research Institute here.
Food inflation surged to 16.49 per cent for the week ending May 8.
Not in favour of wheat, rice exports
However, the senior member of the country’s premier planning body did not favour export of wheat or rice from government stocks. In fact, he wants rice exports to be taxed.
“Global rice prices are alright now, but the moment India will enter the market, they will fall. In any case I feel that there should be a tax on export of rice. Exporting rice is like exporting water,” he said.
On the proposed National Food Security Bill, Dr. Sen said the planning commission had accepted the recommendation of the Tendulkar Committee of providing cheap foodgrains to about 7.4 crore below povertyline (BPL) population.
According to him, the requirement of foodgrains, depending upon the population base and household size, would vary between 7.4 crore to 8.3 crore for which the foodgrains requirement would be around 50 million tonnes annually. “Availability of 50 million tonnes per annum for the public distribution system through procurement in a normal year is not unrealistic considering we have procured around 55 million tonnes in the last three years.”
Raising buffer stock
He suggested raising the buffer stock of wheat and rice to about 25 million tonnes as against a maximum of 14 million tonnes (a maximum of nine million tonnes buffer plus five million tonnes of strategic reserves of wheat and rice). This would be required to cover all BPL as well as any Above Povertyline population demand.
Asked about the lack of storage to stock those levels of wheat and rice he said the government has got to build that storage facility and “should invest in it’.’
