Introduction:
According to a joint report by the National Bank for Agriculture and Rural Development (NABARD) and the Indian Council for Research on International Economic Relations (ICRIER), a supply and demand gap is anticipated in certain commodities in the near future. The commodities under consideration are oilseeds, pulses, and fruits. The increasing trend in their future demand necessitates an elevation in their production and productivity.
Changing Consumption Patterns
The rise in per capita incomes has been identified as a factor leading to diversification in people’s consumption patterns. Consumers are progressively gravitating towards nutritious and high-value commodities, including but not limited to fruits, vegetables, and dairy products. There is a shift from traditional staples such as rice and cereals. This shift is expected to create a significant impact on the demand for oilseeds, pulses, and fruits, signaling the necessity for greater production of these commodities.
Projected Increase in Oilseed Production
The report posits that the production of oil seeds is predicted to increase to approximately 35 to 40 million tonnes (MT) by the year 2030-31. However, this heightened production level may still fall short in meeting the demand as the gap between supply and demand is expected to widen to 3 MT within the next five years, i.e., by 2025-26.
Preventive Measures for Market Fluctuations
The report re-emphasised a recommendation that was initially put forward in a 2012 report from the Commission for Agricultural Costs and Prices (CACP). It suggested a hike in the import duty whenever the import price of crude palm oil drops below USD 800 per tonne as a protective measure for Indian producers. This proposal is made in anticipation of the impact lower import prices can have on the domestic agricultural market, potentially threatening the viability of Indian oilseed production.
Government Policies in Agriculture
The government has implemented some policies to support farmers and promote agricultural growth. One such policy is the Minimum Support Price (MSP), a government-mandated price at which it purchases crops from farmers, thus providing a safety net against sharp drops in prices. Another initiative is the Primary Agricultural Credit Society (PACS) that helps in providing credit facilities to farmers at the grassroots level, helping them to increase their productivity and meet higher demand effectively. These measures further substantiate the government’s commitment to addressing the anticipated supply-demand gap in the agriculture sector.
The Road Ahead
Given the changing consumption patterns and increasing demand for high-value commodities, it is imperative for the agricultural sector to strategize to meet increased demand effectively and sustainably. While government policy and protective measures can provide an essential safety net, it is also crucial for the agricultural sector to adapt and innovate to respond to these evolving demands effectively. With a forward-thinking approach, it would be possible to bridge the impending supply-demand gap in oilseeds, pulses, and fruits, thereby ensuring a stable and thriving agricultural sector in India.
Last Modified: February 22, 2024