De-hyphenating Rice-Wheat Production | 03 Sep 2024

Source: IE

Why in News?

Recently, the policymakers called for de-hyphenating the production of rice and wheat due to changes in their production and consumption.

• In rice, there is a surplus production while wheat is suffering from a deficit in production and increased consumption.

What is the Need to De-hyphenate Rice and Wheat Production?

• Contrasting Surplus Situations: 
  • Rice Surplus: India exported 21.21 million tonnes (mt) of cereal grain (basmati plus non-basmati) in 2021-22, 22.35 mt in 2022-23, and 16.36 mt in 2023-24. 
    • Despite the record shipments, rice stocks in government godowns were at an all-time high at 45.48 mt in August 2024.
  • Wheat Deficit: Wheat exports plunged from a peak of 7.24 mt in 2021-22 to 4.69 mt in 2022-23 and 0.19 mt in 2023-24. 
    • The government banned wheat exports in May 2022, yet wheat stocks were at a low of 26.81 mt in August 2024, one of the lowest in recent years.
• Differences in Production Areas: 
  • Rice: Rice is grown both during the kharif (southwest monsoon) and rabi (winter-spring) seasons. In West Bengal, farmers grow three crops of rice called aus (summer), aman (rainy season) and boro (winter).
    • Moreover, it is cultivated across a wide geography with 16 states contributing over 2 mt each. E.g., North (Punjab, UP) to South (Tamil Nadu, Telangana), Central (MP, Chhattisgarh), East (West Bengal, Assam), and West (Maharashtra, Gujarat).
  • Wheat: Wheat has a single rabi cropping season and only eight states producing 2 mt-plus each mainly in the northern, central, and western regions. 
    • The top four states (UP, MP, Punjab, Haryana) account for 76% of output.
• Production Volatility: Wheat is more volatile due to its seasonal and geographical constraints, making it more susceptible to production fluctuations.
• Limiting Factor: 
  • Rice: Water availability is the main limiting factor which can be easily managed. E.g. States like Telangana have increased rice output significantly due to improved irrigation and minimum support price (MSP) assurances.
  • Wheat: Wheat has become vulnerable to winters getting shorter, warmer and less predictable due to climate change adapting to which is long and difficult.
    • Temperature increase in March (grain formation), and higher temperatures in November-December (sowing period) have reduced yields in recent years, leading to lower government stocks.
• Diverging Consumption Trends: 
  • Wheat: Official household expenditure survey data 2022-23 shows per capita monthly wheat consumption at 3.9 kg in rural and 3.6 kg in urban India, translating to roughly 65 mt for a population of 1,425 million.
    • A significant portion of wheat is consumed in processed forms (maida, sooji/rava) for bakery items, convenience foods, and sweets, which is expected to rise with urbanisation and higher incomes.
    • Today, most South Indians consume wheat daily in at least one meal, while rice has not become as popular in the North as wheat has in the South.
  • Rice: No similar upward trend in rice consumption. Innovations in rice-based convenience foods are limited, suggesting stable consumption patterns.

What are the Government Initiatives to Support Rice and Wheat Cultivation?

• National Food Security Mission
• Hybrid Rice Seed Production
• Rashtriya Krishi Vikas Yojana
• Minimum Support Price
• Agriculture Infrastructure Fund (AIF)
• Pradhan Mantri Krishi Sinchai Yojana (PMKSY)
• Crop Diversification Programme (CDP)

What are the Recommendations to Reduce Rice-Wheat Consumption Divergence?

• Wheat Policy: Rising consumption and geography/climate-imposed production challenges can make India an importer of wheat in the short term.
  • For the long term, the government needs to focus on boosting per-acre yields and breeding climate-smart varieties.
• Rice Policy: Domestic consumption of rice is not keeping pace with production. 
  • The government should lift the ban on exports of white non-basmati rice. 
  • The 20% duty on parboiled non-basmati and the USD 950/tonne floor price on basmati shipments should be removed.
  • Need for innovation in rice-based food processing to increase its consumption such as breakfast cereals, soup, baby food, packaged mixes, etc.
  • De-hyphenation of Policy: The time has come to de-hyphenate rice-wheat, and not conflate one with the other. The two cereals are different in terms of issues faced, both current and for the future.