Problem of plenty: Wheat, rice output hits a record high, concerns over storage

By: |
February 22, 2020 12:40 AM

Although there is good news in store for the government as output is set to increase on back of increased rabi harvest, there are concerns regarding storage that it would have to address.

rice crop, wheat cropThe government hasn’t yet shed its lopsided approach of favouring rice and wheat for procurement, as is evident from the fact that it has chosen to continue with the MSP system.

Although there is good news in store for the government as output is set to increase on back of increased rabi harvest, there are concerns regarding storage that it would have to address. So, as output for wheat and rice this season hits a record high of 101.2 and 115.63 mt, respectively, excess stock of food grains will mean that it will be difficult for FCI to do more procurement or make space for additional grain, as CACP points out in a report. The problem goes beyond FCI procurement.

The government hasn’t yet shed its lopsided approach of favouring rice and wheat for procurement, as is evident from the fact that it has chosen to continue with the MSP system. An analysis from this year’s Economic Survey shows that higher MSPs have led to higher procurements, even when economic costs have been rising. More important, trends show that even as farmers tend to produce more and government continues to procure more, consumption has been declining. While a local storage scheme, as envisaged in the Budget, may help, the government won’t be able to wish the problem away unless it addresses real concerns regarding MSP and procurement.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1Across the Aisle: This election, people of Bihar must unmute themselves
2Twilight zone: MS Dhoni is looking a tad weary in the IPL, losing his finishing mojo. Is it time to rest?
3Inside Track: Why BJP-JDU changed their on-ground poll strategy in Bihar