India to emerge as steady grains exporter by 2016-17

By Jo Winterbottom and Mayank Bhardwaj
NEW DELHI | Thu Apr 26, 2012
(Reuters) - Increasing yields will help farmers harvest a record 270 million tonnes of grains in the 2016/17 crop year, leaving an exportable surplus of 10 million tonnes, Farm Secretary Prabeer Kumar Basu told Reuters.

India, the world's second-biggest rice and wheat producer, is struggling to store grains as bins overflow after years of bumper harvests.

To trim bulging stocks, the government allowed exports of wheat and common grades of rice in September, easing curbs in place since 2007. Rice sales have been brisk since then but wheat exports have been rather staid due to lower global prices.

Bin-bursting harvests in recent years and prospects of higher output would help India "emerge as a steady" exporter of grains in the year to June 2017, Basu said in an interview on Thursday.

"There is no need for us to adopt switch on, switch off policy on exports of grains as we can be a regular supplier of 10 million tonnes by 2016/17," Basu said. "At least, we can feed our neighbours."

Rice and wheat production is very stable and even after the worst drought in nearly four decades, India produced 218 million tonnes of grains in 2009/10, Basu pointed out.

India's yo-yoing farm export policies have been a major concern for traders and policy makers.

Currently India exports rice to the Middle East and southeast Asia and wheat to some neighbours such as Bangladesh.

Wheat exports were banned in February 2007 when adverse weather conditions hit production and the government had to turn to costly imports to provide for its 1.2 billion population.

The government banned non-basmati rice exports in 2008, joining protectionist measures of other leading producers who apprehended a global shortage. International prices touched a record high in 2008.

Since then harvests have run ahead of domestic demand of about 76 million tonnes for wheat and around 90 million tonnes of rice, forcing the government to store grains under tarpaulin.

Some of the bulging stocks at government warehouses are rotting, inviting criticism of the government as hunger is endemic among the country's 500 million poor.

LENTILS, PALM OIL

"Raising production of pulses is a low hanging fruit. The yield can be raised easily," Basu said.

Currently India produces around 17 million tonnes of lentils and imports from countries such as Canada, Australia and Myanmar to bridge the shortfall.

But Basu said raising oilseed output remains a challenge.

"Large-scale oil palm plantation will take five years but yield an extra 4 million tonnes of palm oil. So far we have been able to plant oil palm on hardly 100,000 hectares. We aim for 4 million hectares," he said.

India, the world's top vegetable oil importer, buys mainly palm oils from Malaysia and Indonesia, and a small quantity of soyoil from Brazil and Argentina.

BOUNTIFUL HARVESTS

Farm Minister Sharad Pawar on Monday said India is expected to produce a record 252.56 million tonnes of grains in 2011/12, up from 244.78 million tonnes in the previous year.

Basu said higher yields, especially from the eastern part, which has traditionally been a laggard despite fertile land, helped boost output.

"I am confident about the 270-million-tonne mark in 2016/17 because of higher yields which can go up even higher in eastern states. Production can fluctuate but yields can be stable," he said.

The eastern state of Bihar has improved yields to 2.5 tonnes a hectare which is higher than the national average, Basu said, adding eastern states have produced an extra 9-10 million tonnes in 2011/12.

Rapid mechanisation, better farm practices, hybrid, drought and flood resistant seed varieties, and effective nutrients helped raise productivity.

In addition, setting up a facility that uses satellite images to forecast crop size and manage drought would make farm output estimates more accurate and predictable, he said.

"Due to these factors, the face of Indian agriculture is going to change in the next five years," Basu said.

He said better agronomic practices could help India meet its domestic lentils -- popularly known as pulses -- demand of 21-22 million tonnes in the next 4-5 years.

"Despite rising agricultural production, we will have to adopt every possible technology, including GM (genetically modified) crops, to sustain demand," Basu said.

India does not allow production of genetically altered food. It has so far permitted commercial cultivation of only one genetically engineered crop -- bacillus thuringiensis or Bt cotton.

(Editing by David Cowell)