Production cost going up — probably more than the CACP’s 5.2 per cent estimate — is not the sole reason for the Modi government granting an above-trend MSP hike in paddy. A more pertinent factor has to do with public foodgrain stocks, which, at 311.42 lakh tonnes (lt) for wheat as on June 1, are the lowest in 14 years for this date. Although rice stocks, at 496.76 lt, are above last year’s corresponding level of 491.50 lt, the government clearly isn’t taking any chances. With the next wheat crop arriving only in April 2023, there will be that much added dependence on rice now to meet the requirements of the public distribution system. Hence, the need to ensure adequate stocks and procurement of paddy, whose plantings take off in June and marketing from October. Barely three months ago, the country had enough grain for free distribution through ration shops and also for exports. The post-March heat wave that took a toll on wheat crop yields and more than halved government procurement has made things a tad precarious.
There is a perverse side to the short-term imperative to bolster government cereal stocks. It undermines the cause of crop diversification. Weaning farmers — especially in states such as Punjab, Haryana, Telangana and Maharashtra — away from water-guzzling paddy and sugarcane to growing oilseeds, pulses, cotton, fruits, vegetables and other high-value crops is what is necessary from a long-term nutritional as well as agro-ecological perspective. The current system of assured MSP and open-ended procurement for only paddy, wheat and sugarcane cultivated in a handful of states is simply unsustainable, both fiscally and environmentally. Depleted public stocks and high global prices of cereals are a temporary phenomenon. The Modi government should not take its eye off the real reform road ahead.
