Need to cut incentives for paddy cultivation: Siraj Hussain, former agriculture secretary

A good formula is to keep the duty at a level so that the cost of imported oil is not lower than the cost of domestic oil at MSP.

By Prabhudatta Mishra 

Siraj Hussain spent 18 years of his career handling agriculture, food and allied sectors in Centre as well as Uttar Pradesh, out of which 10 years as joint secretary, additional secretary and secretary in the Union government. He was also chairman and managing director of the Food Corporation of India (FCI) during 2010-12. Currently, he is a senior visiting fellow at the Delhi-based Indian Council for Research on International Economic Relations (Icrier). Hussain spoke to FE’s Prabhudatta Mishra on several issues in Indian agriculture — from surplus food management to the impact of Covid-19 cases in the rural areas and from growing alternative crops of paddy to achieve self-sufficiency in edible oils. Edited excerpts:

As reports of more number of positive cases coming from rural India during the second wave of Covid, how is its impact seen in the next kharif sowing?

The rural areas in several states are indeed reeling under the onslaught of the epidemic. The bad news is that there is a huge gap in vaccination between urban and rural areas, except in Gujarat, Kerala and Rajasthan. There is ample availability of agricultural labour due to migration. If the Covid-19 situation starts improving and the element of fear is checked by a lower number of cases and higher vaccination, the kharif sowing operations are not likely to affect adversely. Monsoon will hit north-west only in early July, by then the wave is likely to subside

After the 2009 drought, India’s foodgrains output has not seen much impact whenever there is an overall deficiency in rainfall as such less rainfall was limited to a few areas/regions. With a continuous surplus of rice and wheat production every year, what is the way out in food policy management?

This is a complex question and the answer can be found only was prepare a 10-year road map in consultation with states. The incentive for growing paddy has to come down and the same for alternate crops, for which India is import-dependent, has to increase.

IMD has predicted a normal monsoon, but some areas of eastern India may face below normal rainfall. Since paddy is the main crop in this region and irrigation is also lower compared to other growing states, is there any threat to paddy crop?

In the past, region-wise predictions of monsoon have not turned out to be very accurate. The normal rainfall in the eastern states is very high. Sub-Himalayan West Bengal and Sikkim receive about 2,000 mm of rain while Bihar and Jharkhand get about 1,000 mm. So, even if IMD’s prediction comes true, a slightly lower rainfall will not have much impact on kharif crops in the eastern region.

There have been talks on a shift away from paddy and other water-guzzling crops, particularly in Punjab and Haryana for years. Why has not it taken off?

According  to data of the Commission for Agricultural Costs and Prices (CACP), wheat, paddy and sugarcane provide the highest return to farmers. In the case of sugarcane, even the private sector is mandated to pay price fixed by the government. In the case of wheat and paddy, there is robust procurement in most states (Bihar is an outlier). Haryana provided an incentive of Rs 7,000 per acre for growing cotton or maize in place of paddy but maize prices collapsed in 2020-21 and the farmers earned much less than they would have, from paddy. So, procurement by the government is a huge incentive to continue with wheat and rice.

Where has India’s policy gone wrong for it to slip from a self-sufficient country in edible oils in the 1980s to a Rs 75,000-crore/year importer now? Will the distribution of the free seeds be helpful in the country becoming self-sufficient in oilseeds?

The National Mission on Oilseeds and Pulses is not very well-funded. At the slightest hit of inflation, the governments (irrespective of parties) have been reducing import duty on palm oil, which also happens to be the cheapest oil, available in ample quantity. The higher-yielding seeds along with a handsome incentive to farmers to grow oilseeds in both kharif and rabi crops may deliver results in 5-7 years. In February 2018, a working group of Niti Aayog submitted demand and supply projections to 2033. In 2032-33, the demand for oilseeds is projected to be about 100 million tonne (MT) while domestic supply will be only about 60 MT.

The government calibrates the import duty periodically so that minimum support prices (MSP) of oilseeds are protected. A good formula is to keep the duty at a level so that the cost of imported oil is not lower than the cost of domestic oil at MSP.