Grain output seen at record 227 mn tonne in 2007-08

Foodgrain production in crop year 2007-08 is estimated to have touched a record 227.32 million tonnes (mt), with output of rice, wheat, coarse grains, pulses, oilseeds and cotton crossing previous highs. The Centre’s third advance estimates for the crop year (June-May) released on Tuesday showed an over 10 mt increase in grain production over the final estimates for 2006-07, which stood at 217.28 mt. This translates to a change of 4.6% over last year’s final estimates. Rice production is estimated at an all-time high of 95.68 mt in 2007-08 against an average 92 mt production annually. Wheat production has been estimated at a record 76.78 mt compared to last year’s 75.81 m tonne, a 1.3% hike. The previous high was 76.36 m tonnes. Coarse cereals production at 39.67 mt was 5.75 mt above last year’s level, a good 17% jump. Pulses production is pegged at 15.19 mt in 2007-08, including toor output of 3.03 mt, the highest ever. Oilseeds output has been pegged at a new high of 28.21 mt compared to 24.29 mt in 06-07, with groundnut production topping with 8.87 mt compared with only 4.86 mt. However, there has been a 13.6% drop in mustard production, primarily due to inclement weather, agriculture secretary P K Mishra said. Just a day prior to the farm ministry’s planned state conference to focus on strategies for increasing production of rice and coarse cereals — the latter may be included in the National Food Security Mission — the current estimates leave limited scope for optimism against the prevailing high in grain prices both at the domestic and the global level. Inflation is at a three-year high and given the lower production in the previous year, carry over stocks have been impacted. This has forced the government to import 1.8 mt of wheat. This beefed up the buffer stock to the prescribed level for April 1, 2008 but there are already indications that the government may have to import wheat again this year, even while imposing restrictions on rice export. The demand for foodgrains was officially estimated at 214.03 mt for 2007-08, while the estimate for demand by the end of the 11th Plan period is pegged at 234.26 mt. Significantly, analysts feel the government has underestimated rising demand and consumption levels and underpegged the levels. Rice shortfall, for instance, was pegged by the government at around 1-1.5 m tonnes but analysts peg the shortfall at around five million tonnes. The met department has forecast that Southwest monsoons this year will be near normal, spelling good news for crop output this year, too. However, analysts maintain the measures taken by the government, including scrapping duty on crude edible oil imports and a reduced 7.5% import duty for refined palm and soya oils, could have an impact on farmers’ decision to plant oilseeds this year. Also, the government has not announced the expected bonus of Rs 100-150/ quintal for wheat although its price is at a high of Rs 16 per kg in the global market. This again could impact the wheat crop while export restrictions on rice could push farmers to planting more remunerative commercial crops instead of grains.