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Guest Column| The wheat conundrum and Indian agriculture
Our skewed agricultural policy and misdirected subsidies have invariably created surpluses in rice and sugar, the two biggest water-guzzlers
This piece is spurred by emotive and somewhat simplistic views expressed in sections of the media regarding Indian wheat export. Some have argued that India should be self-sufficient in all foods, while others have suggested that India can be a granary to the world.
Both arguments indicate information gaps. There are multiple dimensions to reckon for a composite and sensible debate on Indian and global agriculture and food.
To address the first suggestion of self-sufficiency, implying trade restrictions and closed borders, it bears reminding that India imports 12-14 million tonnes of edible oil (cooking oil) and is the largest edible oil importer in the world. To substitute this large amount of edible oil with domestic production would require India to give up the equivalent of more than 40 million tonnes of foodgrains considering that the land availability is limited and finite and any additional acreages in one crop has to be substituted from another.
Why India imports edible oil
We are today arguing about India exporting between 8 and 10 million tonnes of wheat. Domestic supply and demand of wheat is now nearly matched and the much-touted accumulated surplus is drawn down, leaving just the required minimum strategic buffer. Imagine India being short of 40 million tonnes of grain if vegetable oil imports substitution were to be envisaged. There is not today and will not be in the next decade enough grain available globally to meet that huge deficit.
So why does India import so much edible oil? Natural endowments in Indonesia and Malaysia support palm oil plantations at a far lower cost than anywhere else in the world. It is the same for soybean in South America, a direct sown single crop on huge tracts of largely rain-fed lands, with per hectare yields multiples of Indian (and Chinese) yields. That’s why Brazilian and Argentinean soybean oil flows to China and India, respectively. There is a large competitive advantage, even after adding costly ocean freight.
As said, given that there are no new large tracts of agricultural land available for bringing under the plough in India, additional acreages in any crop requires us to sacrifice acreage of another crop. The question then is which to sacrifice? It must obviously be a crop product where we are not a globally competitive producer and which can be imported at scale, therefore edible oil.
Moving away from water-guzzling rice a way forward
Another vital dimension is ecology and long-term sustainability. There is clearly a case to disincentive increases in water-intensive rice and sugarcane to conserve water and save our soils for future generations. Drawing land away from rice to corn, coarse grains and pulses (which we import from as far as Canada) is the way forward.
The answer to the first suggestion partly answers the second, India as a granary to the world. India is among the most intensively irrigated and multiple cropped countries globally, but that comes at a cost in a severely water constrained country. Our skewed agricultural policy and misdirected subsidies have invariably created surpluses in rice and sugar, the two biggest water-guzzlers. It takes over 3 tonnes of water to grow 1 kg of rice in north India. The numbers for sugar are near about the same. Maharashtra, a state with the poorest water endowments, produces year-on-year exportable surpluses of sugar, at huge cost to the environment and long-term sustainability.
It bears reminding that the birthplace of European civilisation was said to be on the island of Crete, not the most fertile of islands. The Minoans of Crete traded their surpluses of wool and olives and wine to support their civilisation. Arguing for complete barriers to international trade and visualising a utopia of all encompassing self-sufficiency is probably knee jerk and retrograde in a global economy, despite the current short-term distortion.
Vegetarian population to India’s advantage
A substantial vegetarian population has been to India’s great advantage. Conversion from grain to meat to calories on the plate is hugely less efficient than direct human consumption of grains and vegetarian food. China is fast hurtling to grain deficits caused by rapid conversion to predominant meat consumption, driven by cultural preference and economic development. India is thankfully largely culturally vegetarian and many of those who do eat meat are limited by economic compulsion. That has helped India feed its burgeoning millions, in spite of plateauing yields and loss of land to urbanisation.
The polity in our country also needs to reckon with the reality that there is no crop technological breakthrough on the horizon globally, which will create a step change in yields in any of our major crops. Low hanging fruit with irrigation/ mechanisation/ hybrids/ traits/ genetically modified organisms (GMOs) has already been picked. The last (and only) yield step change in any major crop in India was in cotton with new global technology over two decades ago.
Fertiliser subsidy more than health budget
Supply and demand compulsions in India will not allow for large exportable surpluses, now or in the nearby future. There is also the question of politically sensitive indirect subsidies ostensibly directed at agriculture. In the current fiscal, fertiliser subsidy alone is estimated at over ₹2 trillion, more than the national health budget. It is widely accepted that capability enhancing investments are a much better spend than subsidies and sops. That is a placeholder for a larger debate.
hardeepsingh.india@gmail.com
The writer has served as chairman of the monitoring committee on MSP, Planning Commission, and is former chairman of Cargill South Asia. Views expressed are personal
