May 18, 2005

India may see wheat shortage before long

India may end up having to import wheat after a lower than expected output forecast for this year.

At the Confederation of Indian Industry annual session in New Delhi, Cargill India president Hardeep Singh said India's domestic consumption has already outpaced production.

Wheat output has declined substantially this year from 72 million tonnes last year, he said.

This was contrary to available output projections by various agencies which pegged output at 73-74 million tonnes for 2004-05.

The current high wheat prices along with low procurement by state-owned agencies, including Food Corporation of India, point to lower production during this year as compared with last year.

Terming India as a food deficit country along with China, Singh attraibuted this shortfall to the fact that "supply is not catching up with the demand fuelled by higher population growth rate".

Singh said India is still deficient in oilseeds, despite the best efforts of government to diversify farm production from traditional crops, like rice and wheat.

Singh said the time has come when investment in the farm sector should aim at higher productivity and abandoning subsidy regime.

Foodgrain subsidy went up to Rs 258 billion in 2004-05 from Rs 24.5 billion in 1990-91.