De-hyphenating rice – wheat

Context: Wheat is grappling with production challenges despite increasing consumption, while rice is experiencing a surplus issue, causing the two cereals to diverge significantly in their circumstances.

Scenario of wheat and rice production and export of India

• Rice Surplus:
  • Export Data: India exported 21.21 million tonnes (mt) of rice in 2021-22, 22.35 mt in 2022-23, and 16.36 mt in 2023-24.
  • Stock Levels: As of August 1, 2024, rice stocks were at an all-time high of 45.48 mt.
• Wheat Shortage:
  • Export Data: Wheat exports fell from 7.24 mt in 2021-22 to 0.19 mt in 2023-24, with a ban on exports since May 2022.
  • Stock Levels: Central pool stocks of wheat on August 1, 2024, were at 26.81 mt, the lowest in recent times.
• Usually, rice stocks are below that of wheat at this time of the year. 
• This is because wheat is harvested and marketed during April-June, whereas the main kharif rice crop comes in only from October.
• The last three years have been unusual, with rice stock levels on August 1, at the tail-end of the crop marketing year, being higher than that of wheat.

Production constraints

•  Rice:
  • Geographical Spread: Cultivated across 16 states including Telangana, Tamil Nadu, Uttar Pradesh, Punjab, and others. Grown in both rabi and kharif season
  • Water Dependency: Limited primarily by water availability, with Telangana significantly increasing its rice output due to improved irrigation and support prices.
•  Wheat:
  • Geographical Concentration: Grown mainly in eight states, with the top four states (UP, MP, Punjab, Haryana) contributing over 76% of the output. Wheat has a single rabi cropping season.
  • Climate Sensitivity: Vulnerable to changing climate conditions such as shorter winters and fluctuating temperatures, affecting production.

Divergence in Consumption: Wheat vs. Rice

• Wheat Consumption Trends: Current Consumption Levels:
  • Rural India: 3.9 kg per capita per month.
  • Urban India: 3.6 kg per capita per month.
  • Total Consumption: Approximately 65 million tonnes (mt) for a population of 1,425 million.
• Forms of Wheat Consumption:
  • Whole-Grain Flour (Atta): Used for basic bread items like roti, chapati, paratha, and poori, as well as dishes like upma and rava kesari.
  • Semi-Processed Flour (Sooji/Rava): Coarse flour used in various dishes.
• Processed Wheat Products:
  • Maida: Refined flour produced from wheat that has been stripped of its bran and germ.
  • Production: Involves grinding the endosperm of the wheat grain, filtering, and bleaching.
  • Uses: Key ingredient in bakery products (bread, buns, biscuits, cakes), convenience foods (sandwiches, noodles, pasta, pizza, momos, pav-bhaji), and sweetmeats (gulab jamun, jalebi).
  • Characteristics: Known for its fine texture, softness, and longer shelf life, but lacks dietary fiber, minerals, B vitamins, and proteins.
• Consumption Trends:
  • Increasing Use of Processed Wheat: With rising incomes and urbanization, the consumption of wheat in processed forms like maida is growing.
  • Data Gaps: Exact figures for processed wheat consumption are not available, but the trend indicates a significant increase.
• Rice Consumption Trends:Current Consumption:
  • Limited Innovation: Processing and convenience food innovations for rice have been relatively minimal.
  • Common Products: Includes traditional dishes such as idli, dosa, murukku, puffed rice (murmura), puddings, and biryani.
• Consumption Dynamics:
  • Less Diversification: Unlike wheat, rice has not seen significant growth in processed forms or new food products.
  • Wheat: Increasing consumption, especially in processed forms like maida, driven by rising incomes and urbanization. Consumption is significant both in traditional whole-grain forms and processed products.
  • Rice: Consumption remains stable with limited diversification into processed products and convenience foods.

Policy Implications

• Wheat Policy Considerations: Current Consumption Patterns:
  • South India: Wheat is a staple, consumed in some form at least once daily.
  • North India: Rice has not become as prevalent as wheat in South India.
• Processing Infrastructure:
  • Roller Flour Mills (RFMs):
    • Quantity: Approximately 1,500 RFMs.
    • Capacity: Process 50 to 500 tonnes of wheat per day into products like maida, sooji/rava, bran, and germ.
  • Stone Chakkis:
    • Quantity: Numerous roadside and around 700 organized stone chakkis.
    • Capacity: Grind 50 to 300 kg of wheat per hour to produce whole atta flour.
• Future Outlook:
  • Short-Term: India may need to become a wheat importer due to rising consumption and production challenges.
  • Long-Term Strategy:
    • Improve Yields: Focus on increasing per-acre wheat yields.
    • Develop Climate-Smart Varieties: Breed wheat varieties that can withstand changing climate conditions.
• Rice Policy Considerations: Current Production vs. Consumption
  • Production: High levels of rice production.
  • Consumption: Domestic consumption does not match the production levels, leading to surplus.
• Export Restrictions:
  • Export Ban: Current ban on exports of white non-basmati rice should be lifted.
  • Duties and Floor Prices:
    • Parboiled Non-Basmati Rice: Remove the 20% duty.
    • Basmati Rice: Eliminate the $950/tonne floor price on shipments.
• Stock Management:
  • Action Required: Immediate policy changes are needed to prevent unmanageable excess stocks.
• Wheat: Requires a shift in policy to address rising consumption and production issues, including improving yields and adapting to climate change. The trend suggests India may need to import wheat soon.
• Rice: Needs policy adjustments to manage surplus, including lifting export bans and duties to balance production and consumption.