LOW WHEAT STOCKS: THE TEST

CONTEXT: India’s wheat stock situation is unstable, the government has managed supply-side issues for pulses and edible oils but not for wheat, rice, and sugar. This lack of stability is affecting long-term investments and strategic planning. A comprehensive agrarian vision is needed to address inflation concerns and ensure sector health. Future governments must prioritize this issue to safeguard India’s food security and agricultural industry.

ISSUES

• Existing Wheat Stocks: Government warehouses hold wheat stocks at a seven-year low but sufficient to meet more than the minimum buffer requirements for the next three months.
• Interim Measures for Inflation Control: Government actions such as export bans and market interventions aim to manage food inflation.
• Supply Challenges: There are potential issues in the supply challenges with complexities in demand forecasting and gaps in distribution supply chains.
• Policy on Import and Exports: The current government’s hesitancy to open imports for key staples despite similar proactive measures for pulses and edible oils.
• Impact on Investment in Agriculture: Unpredictable policies have undermined investment incentives in processing, warehousing, and research areas.
• Selective Reactivity: The government’s quicker action on pulses and edible oils contrasted with a cautious approach to wheat, rice, and sugar.
• Export and Import Regulations: Restrictions on exports and domestic stock holdings; reservations about opening imports despite supply pressures.

THE WAY FORWARD

• Strategic Reserves: Enhance and diversify strategic reserves to include multiple grains to prepare for variations in crop output.
• Robust Infrastructure: Invest in robust storage and logistics to minimize post-harvest losses and ensure efficient distribution, particularly focusing on regions prone to shortages.
• Cold Storage Facilities: Expand storage facilities to preserve perishable crops, stabilize markets, and reduce waste.
• Flexible Import Policies: Formulate more responsive import policies that can be adjusted quickly to domestic production and international market changes.
• Prudent Export Restrictions: Establish criteria for when to impose or lift export bans, ensuring they are used as a tool for market stabilization rather than a standard reaction.
• Market Reforms: Implement market reforms to provide farmers with better market access, thus assuring fair prices and reducing the need for government intervention.
• Financial Instruments: Introduce crop insurance and futures trading for key commodities to protect farmers against price volatility and crop failures.
• Research and Development (R&D): Invest in agriculture R&D to improve crop yields, create drought-resistant varieties, and develop sustainable farming practices.
• Agricultural Technology: Promote precision farming, IoT, and AI to optimize resource use and increase farm productivity.
• Long-Term Agricultural Policy Framework: Develop a long-term policy framework for agriculture that includes input from stakeholders and experts to ensure consistency and predictability.
• Farmer Education: Educate farmers on best practices, market trends, and alternative cropping patterns through extension services.
• Inclusive Growth: Ensure that agricultural growth is inclusive, benefiting small and marginal farmers and integrating them into the value chain.
• Consumer and Producer Price Stabilization Funds: Create funds to moderate volatile prices and secure farmers’ incomes.

THE CONCLUSION:

The Indian agricultural industry needs a dynamic and sustainable framework that fosters innovation, resilience, and sustainability. This requires practical trade policies, strategic reserves, import-export flexibility, and investment in agricultural technology and support systems for farmers. By establishing a long-term agricultural strategy a sustainable agricultural future can be established that can adapt to changing climates, global market fluctuations, and evolving domestic needs.

UPSC PREVIOUS YEAR QUESTION

Q.1 What are the reformative steps taken by the Government to make the food grain distribution system more effective? (2019)

MAINS PRACTICE QUESTION

Q.1 Discuss the strategic measures the government should adopt in the short and long term to manage inflation effectively. Evaluate the impact of current supply-side management policies on various stakeholders in the agricultural sector, including farmers and consumers.

SOURCE:https://indianexpress.com/article/opinion/editorials/the-wheat-test-9118067/