The Hindu : Decline in grain production

Online edition of India's National Newspaper
Monday, Jul 07, 2003

Opinion

Opinion - Editorials

Decline in grain production

THE DOWNWARD REVISION, even if marginal, of the provisional estimate of grain production in 2002-03 is further confirmation that the 2002 drought has had a strong negative impact on Indian agriculture. Production of food crops (cereals and pulses), which is now placed at 182.57 million tonnes for 2002-03, plunged by a shade under 14 per cent from 2001-02. The size of the grain harvest has not been so small since 1995-96, when output was 180.4 million tonnes. Such a decline has not been witnessed since the late 1980s. The latest estimate of food production in 2002-03 will finally put to rest any lingering doubts about the deceleration in economic growth last year. It had been suggested within the Government that the Central Statistical Organisation's estimate of a 4.3 per cent growth in the gross domestic product was based on a major underestimate of agricultural production. Further revisions are yet possible, but for now the Agriculture Ministry has indicated that there was indeed a steep fall in production last year. That food production should have declined during a drought year is not surprising. What is surprising and worrying is that after the considerable work done in "drought proofing" agriculture, one major drought after a decade of normal or near-normal average monsoon has resulted in such a sharp fall in output.

The disappointment of last year is, of course, part of a larger phenomenon that marked the 1990s and has continued into the present decade. The average annual growth rate of agricultural production declined between the 1980s and 1990s; the deceleration affected both food and non-food crops. The slow-down in output growth was entirely on account of a fall in yield growth. The growth rate of agricultural yields halved between the two decades, and the decline was particularly marked in rice, wheat and oilseeds. The reasons for the deceleration in agriculture are well known: inadequate irrigation cover, a decline in public investment, an unbalanced use of inputs, especially fertilizer, and importantly a slow-down in the growth of institutional credit growth to some groups. Overall, there was a marginal increase in the growth rate of disbursements to agriculture in the 1990s. But there was a perceptible slow-down in the annual growth of institutional credit to the two categories of marginal and small farmers, and also of medium/long-term loans that are used mainly for capital investment in agriculture. The only area of credit where growth picked up was in disbursement of short-term loans. The slower growth in disbursement of institutional credit must have naturally had a negative impact on production. A different question is: does it really matter any longer if the production of food crops, especially of cereals, grows at a slower pace, since imports are an option and in any case food diets are shifting away from cereals?

It is important for two reasons for grain production to grow faster than the population. First, food is often used as a global political weapon, so domestic food security must remain a priority. Trade can only be an option that is used in years of marginal shortfalls. Secondly, there is a statistical shift away from consumption of grain because high-income groups are moving to non-cereal foods. Among the low-income groups, consumption of cereals increases whenever incomes rise. It is therefore necessary to continue to give importance to an annual growth in the production of food crops.

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