There is good news and bad news. The good news is that food inflation may get under control to some degree, via higher food production this year.
Food production in India in 2011-12 is expected to surpass the target of 245 million tonnes, Agriculture Minister Sharad Pawar said Wednesday.
India had a record 241.6 million tonnes food production in 2010-11.
‘Monsoon has been good this year and the reservoirs are in good position. Food production may surpass the target of 245 million tonnes in 2011-12,’ said Pawar, addressing the Rabi Conference 2011.
According to the first advance estimates of production of major crops in Kharif season 2011-12 by Pawar, total foodgrain production is likely to be 123.88 million tonnes as compared to 120.20 million tonnes in 2010-11, marking an increase of about 3.68 million tonnes.
While rice production in the country in the Kharif season is likely to be 87.10 million tonnes as compared to 80.65 million tonnes in 2010-11, production of pulses is expected to be 6.43 million tonnes as against 7.12 million tonnes last year.
The bad news is that given that it comes from Sharad Pawar, we don’t know what kind of ulterior motives this piece of information involves. The move “signals” something, and if I were a grain trader I would get the hell of any inventory I own. Though of course it might not even mean reducing prices:
The minister urged states and union territories to ‘take full benefit of the minimum support prices and market intervention scheme’ so that farmers are not deprived of remunerative prices.
‘I would urge upon the states to launch special initiatives for boosting development of agriculture to ensure it remains a remunerative profession on a sustainable basis for rural communities,’ said Pawar.
I’m not sure I understand the point of the government buying up more produce at even higher prices, just so it continues to rot. Only the middleman benefits. Oh, wait.