India's Golden Harvest

Two years of successive drought and an abysmal wheat production output resulted in India importing 5.75 million of the food grain in FY17. However, the coming fiscal might end up being a good year for the Indian farmer, after all. And we don’t have just mother nature to thank for it, the Indian government has taken every measure it can to reduce the burgeoning import bill.

First came the 6.7% rise in the minimum support price (MSP) for wheat this October – from Rs.1,625 per quintal to Rs.1,735. This was followed by raising the import duty to 20% this month. This has led to increase in wheat production area thereby increasing the annual output to 98.38 million tonne in 2017, from 92.29 million tonne last year. Wheat stocks have also risen from 18.8 million tonne in November 2016 to 23.9 million tonne as on November 1, 2017. This means that the world’s second largest wheat producer may not need to import wheat for the first time in three years.

Apart from wheat, India also ends up buying pulses from overseas. It is the largest importer of pulses and imports increased to 6.6 million tonne in FY17 compared to 5.88 million tonne in FY16. And the bumper production of one of the most popular winter-crops, chickpea or channa can help lower the imports for pulses in 2018-19. The government has also increased the MSP for chickpea by 10% (about Rs.200 per quintal) apart from imposing an import duty of 50% to encourage farmers to expand the area under chickpea cultivation, which is expected to increase by 20% in FY18. With all the signs and measures in place for a bumper harvest in March next year, India might not have to go overseas to meet its wheat and pulses requirement.