September 19, 2023

Agricultural sector India: record production of food grains likely in 2022; agricultural laws are repealed and prices increase bitter pills for the agricultural sector

India has achieved a record food grain production this year, but the withdrawal of three agro-reform laws and soaring cooking oil prices have cast a shadow over the country’s resilient agricultural sector which is on the right way for a better harvest in 2022 despite the pandemic blues.

While the surge in food grain production that also helped the government provide free additional rations to poor families affected by COVID for many months together has been a relief, the past year will be remembered for the long demonstration by farmers at the Delhi borders against the three laws and subsequent repeal of the laws.

India’s agricultural sector, which was among the few segments that remained robust amid pandemic gales, is expected to register a growth rate of 3.5% in the current fiscal year ending March 2022.

Production of food grains hit a record high in the 2020-21 crop year which ended in June at 308.65 million tonnes. Production could reach 310 million tonnes for the current season.

The government bought huge quantities of wheat, rice, pulses, cotton and oilseeds at the minimum support price (MSP) for the benefit of farmers.

In 2020-21, paddy and wheat purchases reached a record 894.18 lakh tonnes and 433.44 lakh tonnes, respectively. Purchases of pulses reached 21.91 lakh tonnes, coarse grains 11.87 lakh tonnes and oilseeds 11 lakh tonnes, according to official data.

As production and supply continued smoothly, the farmers’ unrest, which began in November 2020, finally ended this month after Parliament passed a bill on the first day of the winter session of November 29, aimed at repealing the three disputed agricultural laws. The Supreme Court suspended the application of these laws in January.

The farmers’ unions are claiming victory after forcing the Center to accede to their demands. In contrast, economists and government officials see it as a step backwards in introducing reforms to the agricultural marketing system.

The jury is still out on the merits of these three laws.

“We expected that a fifth of the country’s farmers would benefit from the implementation of the three agricultural reforms. We completely lost this opportunity. However, I think the setback is only temporary,” PTI told PTI Ramesh Chand, member of Niti Aayog.

Had the agricultural laws been implemented, said member from Niti Aayog, “it would have achieved the goal of doubling farmers’ incomes to a large extent. We had put almost 20% increase in income on the implementation of agricultural laws ”.

The three laws, adopted by Parliament in September 2020, aimed to give farmers freedom of marketing beyond the notified mandates. A framework for contract farming and the regulation of the supply of essential commodities only in extraordinary circumstances were the other main objectives.

Chand said the overall performance of the agriculture sector has been robust this year. “The agricultural growth rate is intact. This year, we forecast a 3.5% growth rate in agriculture by the end of March 2022, identical to that of last year,” he said. declared.

Record production of food grains has helped the agricultural sector maintain its growth rate.

Agriculture Commissioner SK Malhotra said the country’s food grain production could reach 310 million tonnes in the 2021-22 crop year (July-June). Good monsoon rains, the adoption of new technologies and the successful implementation of government programs like PM-KISAN have all contributed to the increase in production.

Malhotra said crop productivity has improved as farmers adopt better varieties of seeds that give higher yields and have high nutritional value, in addition to having resistance to disease and adverse climatic conditions.

The official also pointed out that out of season rains have affected perishable and horticultural products in some parts of the country. As a result, the prices of some commodities like tomatoes have come under pressure. Despite exceptional oilseed crop production, edible oil prices have skyrocketed to unprecedented levels globally.

India meets around 60-65% of the domestic demand for edible oils through imports, which reached a record Rs 1.17 lakh crore in the 2020-21 season, which ended in October. The prices of mustard oil have increased to around Rs 200 per liter and the prices of other cooking oils have also increased.

During the year, the government reduced import duties on palm oil as well as other oils on several occasions to lower domestic prices, but rates remain high. To keep prices under control, the government has also banned futures trading on many commodities and has also imposed storage limits on traders and wholesalers.

A sharp increase in the area cultivated with rabi oilseeds gives hope for a probable fall in the prices of cooking oil in the new year.

Among other developments, the large cooperative IFFCO has launched nano-urea in liquid form which promises to reduce Indian imports as well as the subsidy bill.

“We have started to produce nanourea commercially and so far have produced 1.5 crore bottles of nanourea which have saved 6,000 crore from the government subsidy,” IFFCO said. MD US Awasthi and urged the government to support the production of these innovative products.

2021 has also seen huge investments in agro-tech startups that work in agricultural advisory, input provision, and marketing support, among others. New technologies like drones are used in the agricultural sector.

The government has already announced the establishment of a committee to respond to a key demand from protesting farmers’ unions – a legal guarantee for the minimum support price (MSP) regime.

Hopefully an amicable solution to the MSP issue is expected in the new year.