The robust performance of food and non-food crops in 2007-08, as reflected in the latest crop estimates released by Krishi Bhawan, should provide relief to an inflation-battered economy as also to a government struggling to deal with the high prices of essential items. The projected 4.6 per cent growth in foodgrain output, backed by record harvests of wheat, rice, coarse cereals, pulses and oilseeds, is significant in several respects. For one, the growth of food crops is close to four times the average annual foodgrain output growth of 1.2 per cent between 1990 and 2007 and, thus, bucks the prolonged pattern of food production growing slower than population growth. It also exceeds the ambitious target rate of 4 per cent growth, which had remained elusive in the 10th Plan (2002-07), and which is now sought to be achieved in the 11th Plan. Importantly, this growth is not on a low base, as foodgrain output in 2006-07 had risen by 4.2 per cent over the previous year, though overall agricultural growth in that year was only 3.8 per cent. The good harvest is reflected in market arrivals and substantial government procurement of both rice and wheat. While the procurement of rice has already surpassed last year's level, that of wheat is going apace and there is every likelihood of it touching a level not seen for several years. In case the wheat mop-up turns out to be as high as 16-17 million tonnes, as expected now by the government, it will take official stocks to around 22 million tonnes, including an opening stock of 5.5 million tonnes. And if rice procurement happens to be 27-28 million tonnes, as is widely anticipated, the total foodgrain stocks with the government would be in the comfort zone of 45-50 million tonnes. That would make it unnecessary to import grain, and would also dispel concerns about the country's food security. While all this is welcome and has come at a most appropriate time, the impact of this positive scenario on prices remains mixed. Where pulses and edible oils are concerned, which have witnessed the steepest price hikes in the past year, the price impact of the record harvest may be quite small because of the dependence on imports, reckoned at 45 to 50 per cent of total consumption. The prices of these crops are determined by the landed cost of imported consignments, but even here it is a matter of relief that import prices have started sliding because of duty reductions. For wheat, a clearer picture will emerge after the procurement season is over, in the next couple of weeks. Some of the government's re-imposition of licensing, stock limits and movement curbs, as also anti-hoarding operations, have scared the private trade away from the wheat market. This has of course helped the government achieve its wheat procurement goals, but it has put a question mark on grain availability in the open market, especially during the off-season, when prices tend to rise the most. Therefore, once the government is sure that it has enough grain in its godowns, and prices have softened, as should happen in the next few weeks, it may be worthwhile for it to reconsider the curbs and controls that it has imposed. Story Comments Total Post : 1 Posted By : konda on 25 April,2008 Good harvest this year ,thanks to good evenly spread monsoon ,is a welcome relief from the psychology of scarcity created by panic reaction of govt. and moves by opposition to make political capital out of the present situation.The oppositio parties ,left parties in particular, are behaving irresponsibly.Hope that better sense prevails and they will not fish in troubled waters.Govt.,on their part,should focus on improving yields in dry land farming where most of the pulses and oilseeds are grown