India: Effects of Tariffs and Nontariff Measures on U.S. ... - USITC

<strong>India</strong>n Agricultural Production <strong>and</strong> Consumption by Sector 1
Grains
Production
<strong>India</strong> is generally self-sufficient in grains, only importing in bad crop years. 2 Grain
production is dominated by rice <strong>and</strong> wheat, <strong>of</strong> which <strong>India</strong> is a leading global producer. 3
Rice production totaled 96.7 million metric tons (mmt) <strong>and</strong> wheat production totaled
78.6 mmt in marketing year (MY) 2007/08 (table F.1). Rice covered 43.8 million
hectares (ha), <strong>and</strong> wheat covered 28.2 million ha in MY 2007/08, representing an
expansion <strong>of</strong> 2–5 percent over their MY 2003/04 levels.
Both grains are distributed to the poor through the government food distribution system. 4
Public procurement is usually equivalent to about one-fourth <strong>of</strong> the production <strong>of</strong> these
two food grains, except in 2008–09, when procurement increased to nearly one-third <strong>of</strong>
production (table F.2).
Production <strong>of</strong> food grains is heavily influenced by government procurement prices, which
increased over the period, with faster rates <strong>of</strong> growth after MY 2006/07 following poor
harvests because <strong>of</strong> unfavorable weather. Wheat, rice, <strong>and</strong> coarse grains benefited from
favorable weather in MY 2007/08 <strong>and</strong> reportedly from greater distribution <strong>of</strong> improved
seeds to farmers resulting in higher yields. 5 Area planted to wheat increased slightly after
MY 2005/06, mostly at the expense <strong>of</strong> rapeseed/mustard, because <strong>of</strong> the lower relative
support price for rapeseed vis-à-vis wheat. 6
Most <strong>of</strong> the increase in coarse grains production is accounted for by corn (maize), which
rose 22 percent in MY 2007/08 to 19 mmt. 7 Increased dem<strong>and</strong> for corn comes from the
growing <strong>India</strong>n poultry industry for use as feed <strong>and</strong> from the cornstarch industry for use
in paper, pharmacy, food, <strong>and</strong> textiles. 8 Of total annual corn production, almost twothirds
is used for animal feed, about one-quarter is consumed as food, <strong>and</strong> the remainder
is used to produce starch. 9 Other coarse grains produced in <strong>India</strong> include pearl millet
(bajra), sorghum (jowar), <strong>and</strong> barley.
1 The following discussion is limited by the gaps in <strong>India</strong>n production <strong>and</strong> consumption data for certain
sectors.
2 Multinational pizza chains operating in <strong>India</strong> import high-protein wheat for making pizza crusts because
<strong>India</strong>n wheat is reportedly low in protein <strong>and</strong> unsuitable for making pizza crusts. Industry representative,
interview by Commission staff, New Delhi, <strong>India</strong>, May 8, 2009.
3 Regional patterns <strong>of</strong> crop production are shown in figure F.1.
4 The Targeted Public Distribution System is the largest <strong>of</strong> <strong>India</strong>’s food distribution programs.
5 Govindan, <strong>India</strong>: Grain <strong>and</strong> Feed; Quarterly Lock-Up Report, May 6, 2008, 3.
6 Govindan, <strong>India</strong>: Grain <strong>and</strong> Feed; Monthly Lock-Up Report, January 10, 2007, 3.
7 Govindan, <strong>India</strong>: Grain <strong>and</strong> Feed; Quarterly Lock-Up Report, May 6, 2008, 6.
8 Govindan, <strong>India</strong>: Grain <strong>and</strong> Feed; Quarterly Lock-Up Report, August 31, 2007, 9.
9 <strong>India</strong>n industry representative, interview by Commission staff, Mumbai, <strong>India</strong>, May 28, 2009.
F-3