India's food balance sheet projects shortfall in oilseeds, pulses & fruits

A recent research report jointly published by the National Bank for Agriculture and Rural Development (NABARD) and the Indian Council for Research on International Economic Relations (ICRIER) has sounded a warning about India's increasing reliance on food imports and the consequent rise in the food import bill.

Titled Prospects of India’s Demand and Supply for Agricultural Commodities Towards 2030, the report highlights potential deficits in key commodities and the need for strategic measures to address the looming crisis. According to the report, commodities such as oilseed, pulses and fruits are expected to experience a significant supply–demand gap in the coming years.

The report's authors, Ashok Gulati and Shyma Jose, emphasised the urgent need to ramp up the production and productivity of these commodities to meet the growing demand. The report underscores that as per capita incomes rise, there is a shift in consumption towards nutritious and high-valued commodities, leading to a divergence from staples like rice and cereals. Ashok Gulati is a distinguished professor at ICRIER, while Shyma Jose is a research fellow.

The report assumes significance in the wake of recurrent high food inflation, which has constrained the scope for monetary and fiscal policies to promote economic growth.

Initial independent estimates for the kharif season indicate a potential three-year low in the output of pulses, some coarse cereals, groundnut and oil seeds. Retail inflation in pulses has already surged to 18.8 per cent, while inflation in fruits reached 9.34 per cent.

Edible oils, however, have witnessed deflation after a sharp price increase last year following the Ukraine conflict.

The report projects that oilseed production is expected to rise to 35–40 million tonnes by 2030–31.

However, the gap between demand and supply is predicted to expand to 3 million tonnes by 2025–26 and 6 million tonnes by 2030–31, even with a modest 5.1 per cent per capita income growth.

The deficit in oilseeds is particularly concerning given India's substantial edible oil imports, reaching 13.4 million tonnes during 2020–21. The report suggests technological breakthroughs or area expansion as potential solutions to improve the oilseeds' balance sheet.

In a nod to a 2012 recommendation from the Commission for Agricultural Costs and Prices (CACP), the report suggests raising import duties to protect Indian producers when crude palm oil imports fall below $800 per tonne. However, it also cautions against pursuing self-reliance in water-intensive and long gestation crops like oil palm as a sustainable goal.

Gulati and Jose have projected the likely demands for various farm products up to 2030–31 based on different growth scenarios. The report calls for policy attention to balance domestic production and the absorption of these commodities.

It emphasises diversification towards high-value commodities, advocating significant investments in market infrastructure, processing, cold storage and warehousing facilities to build an efficient and reliable value chain. The authors argue that such measures can significantly reduce food wastage and ensure a sustainable food supply chain for India's future.