2001, Volume 4, Paper 46
ISSN: 2209-6612
Wheat Economy of India: Development, Nature and Trade Prospects
Vasant P. Gandhi – Indian Institute of Management, Ahmedabad
Zhang-Yue Zhou – Director, Asian Agribusiness Research Centre, The University of Sydney, Orange NSW
John Mullen – Principal Research Scientist and Economics Coordinator, NSW Agriculture, Orange NSW
Abstract
Wheat production in India has increased by over ten times in the past five decades and India has become the second largest wheat producer in the world. Today wheat plays an increasingly important role in the management of India’s food economy. However, studies that research the wheat economy of the country as a whole remain scarce. This present study examines the characteristics and developments of India’s evolving wheat economy.
It seeks to answer questions such as, what is the nature of India’s wheat economy? Will the production be able to keep pace with consumption growth? What are the prospects for international trade? Our analyses show that India’s wheat production increase is driven principally by yield growth, and to some extent by shift in production from other crops to wheat and an increase in cropping intensity. Among the major factors that affect yield, fertiliser use appears to have less effect in recent years while expansion in irrigated and high yielding variety (HYV) area seem to play a more important role in raising yield. However, with irrigation and HYV having already reached 85-90 per cent area coverage for wheat, future growth in wheat production will be constrained.
On the other hand, the demand for wheat is likely to grow fairly rapidly. Depending on the population and income growth, poverty alleviation and the rate of urbanisation, a demand-supply gap may open at a rate of about 1 to 2 per cent per year which is equivalent to 0.7 to 1.4 million tonnes of wheat, growing larger over the years. Promoting rapid economic development and income growth in India which embraces the poor, and particularly the rural poor, may lead to considerable growth in demand for wheat and thus an expansion in trade opportunities.
Download full document here
