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Source: The post gap between India’s cereal production and consumption has been created, based on the article “Jean Drèze and Christian Oldiges write: India’s great grain mystery” published in “Indian express” on 9th January 2024.
UPSC Syllabus Topic: GS paper 3- Indian economy- issues of buffer stocks and food security
News: The article discusses the gap between India’s cereal production, which is around 300 million tonnes, and its consumption, less than 200 million tonnes. It explores reasons for this surplus, like changes in people’s diet and possible underestimation of cereal used for feed and industrial purposes.
What is India’s current Cereal status?
Production Levels: India’s cereal production is around 300 million tonnes annually, with recent figures showing 304 million tonnes in 2022-23.
Consumption Trends: People consume less than 200 million tonnes, possibly even below 180 million tonnes, as per capita cereal consumption (PCCC) has been declining since the late 1970s.
Surplus Situation: A significant surplus exists, with a gap of about 100 million tonnes between production and consumption.
What are the reasons for the gap between production and consumption of cereal?
Decreasing Per Capita Consumption: Cereal consumption per person has been dropping, with figures showing a decrease from 15.3 kg per month in rural areas in 1977-78 to 11.3 kg in 2011-12.
Changing Dietary Habits: Urbanization, higher education levels, and diversification in food intake have contributed to reduced cereal consumption.
Increased Export: There’s a significant rise in cereal exports, with 23 million tones in 2020-21 and 32 million tonnes in 2021-22.
Underestimation in Feed Usage: Experts suggest that the Economic Survey overestimates cereal ‘net availability’ due to a low allowance for seed, feed, and wastage (SFW- 5%,5%,2.5% respectively), set at 12.5%. They argue the 5% feed component is underestimated. Doubling it to 10% could decrease the cereal surplus by about 15 million tonnes, yet a significant surplus would persist.
Industrial Uses of Cereals: There’s a possibility of increased industrial use of cereals, for products like beer and biscuits, which might not be fully accounted for in consumption estimates.
What are the implications of this Cereal Gap?
Agricultural Policy Challenges: The cereal surplus creates a challenge for policymakers to balance farmer incomes and market demands, questioning the effectiveness of current agricultural policies.
Potential Resource Misallocation: With declining per capita consumption (from 15.3 kg to 11.3 kg monthly in rural areas between 1977-78 and 2011-12), the surplus suggests possible overinvestment in cereal production.
Impact on Global Trade: India’s increased exports, reaching 23 million tonnes in 2020-21 and 32 million tonnes in 2021-22, indicate the surplus’s role in shaping India’s position in the global cereal market.
What should be done?
- India should consider diversifying agriculture away from just rice and wheat.
- Leveraging the surplus for increased exports, as seen with 32 million tonnes exported in 2021-22, can be beneficial.
- Investigate and potentially expand cereals’ industrial applications, considering the speculated rise in use for products like beer and biscuits.
- Evaluate the impact of the public distribution system on cereal consumption and distribution efficiency.
Question for practice:
Examine the broader implications of India’s cereal production and consumption gap?
