India Cereal Economy UPSC | Understanding India’s Cereal Mess – Daily Analysis

Core Problem

India over-procures rice & wheat due to MSP bias, but under-produces pulses & oilseeds → cereal surplus + huge import dependency.

Key Data

  • Paddy procurement 2025: 119.86 lt (vs 82.08 lt)
  • Wheat opening stock: 356.1 lt (norm: 102.5 lt)
  • Edible oil imports: 112 lt (2024–25)
  • Pulse imports: 30 lt
  • Edible oil output stagnant: 13 lt for 6 years
  • Import bill (edible oils): ₹82,000 crore
  • Oilseed area stagnant for 25 years

Why Distortions Exist

  • MSP system favours rice & wheat.
  • Farmers avoid pulses/oilseeds due to no assured procurement.
  • Weak market + storage + processing systems.
  • Cheap imports hurt domestic producers.
  • Procurement ignores nutritional needs.

Impacts

  • Economic: High subsidy + rising imports
  • Agricultural: Monocropping
  • Environmental: Paddy → groundwater depletion, methane
  • Social: Low diversification traps farmers

Reforms Needed

  • Shift procurement & MSP towards pulses/oilseeds.
  • Promote diversification & climate-resilient crops.
  • Stronger markets, storage, processing, FPO linkages.
  • Price deficiency payments; better risk management.
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