India’s position in the world agro map

India has the second largest arable land (~ 162 million hectors, out of that ~ 140 million hectors is actually sown) in the world next only to USA and the largest irrigated land base of ~ 55 million hectors in the world. Due to such a large arable land base, India is the second largest producer of rice, wheat, sugarcane (for sugarcane it may be the largest for current year), fruits and vegetables; the largest producer of tea and a leading producer of edible oil seeds and coarse grains in the world. India also has second largest cattle head count and the largest producer of milk in the world. But, India is also a second largest populous country in the world (having population of ~ 1.2 billion people), so on demand-supply front, except edible oil for the most of the major agriculture items, India is largely self-sufficient, though it has started importing wheat to replenish it inventory.

But at present, the key question one should consider is – Is India prepared or capable of meeting all its future demand for food without restoring to imports from the rest of the world (and becoming food dependent country) and without having widespread inflationary effects? It is sure that rising per capital income on back of strong economic growth, exponential growth in middle income consumers, higher aspiration and changing food habits are likely to result into higher non-liner growth (compare to population growth) of food consumption in India. However, as far as the growth is concerned, India’s agricultural economy is stagnant on many (or almost all) fronts. Indeed in the last five years, the average growth in agriculture production has been below country’s population growth. Annual per capita food grain production has declined from 207 kg in 1995 to 186 kg in 2006. The rate of agriculture growth has fallen from 5% in the mid-1980s to less than 2% in the past half-decade.

Net irrigated area has just grown from ~ 50 million hectors in 1990s to ~ 55 million hectors currently , capping the growth in available land for cropping (As irrigation makes it possible to take crop two times a year instead of rain dependent land where only one crop per year is possible). The average growth in land brought under irrigation decelerated to 1.5% during F1991-04 compared with 2.4% in the 1980s and 2.7% during the 1970s. The government spending on agriculture is also hovering around 0.5% of GDP since last couple of years. On productivity front also there is not much growth. The yield per hector of food grains is around 1700 kg / hector, almost stagnant for last seven years. The government's fertilizer policy has distorted the trend in fertilizer consumption and therefore the mix of soil nutrients, resulting in low productivity. The ideal usage ratio of nitrogen, phosphorus and potassium (NPK) is 4:2:1. According to the Planning Commission of India, this is one of the proven and well-documented reasons for stagnation in the productivity and production growth rate since the early 1990s. Another problem in India is fragmented land holdings – about 60% of the farm land is owned by small marginal medium farmers who are unable to benefit from power of scale and are more vulnerable to adverse weather conditions and high level of indebtedness.

Future demand by various estimates of per capital GDP growth suggest that by 2020 India will require 270 to 290 million tons of food grain against current production of ~ 212 million tons. This can only be achieved either through increasing the yield per hector (need to achieve yield of 2100-2150 kg / hector from current 1700 kg/hector) or by increasing area under irrigation (Only 40.3% of the farming land is irrigated). India’s solution to remain food sufficient economy lies in systematic efforts to achieve both.

Worldwide food prices have risen sharply and supplies have dropped this year… The changes represent an “unforeseen and unprecedented” shift in the global food system, threatening billions with hunger and decreased access to food…

United Nations Food and Agriculture Organization on its latest food outlook

Article Author Manish Marwah