In a report released on Thursday, rating agency Infomerics Valuation and Rating stated that, despite some significant region-specific differences, generic factors such as government support for rice production, favourable monsoons, a growing number of rice processing companies, and increased exports have positively impacted the Indian rice industry.
The Rice Industry – Emerging Contours study is upbeat about India's rice industry's future. It emphasises the need for a comprehensive rice strategy that focuses on new rice seed types, systems, and technologies. It outlines government measures aimed at bringing about structural improvements in the industry as well as effective methods for reducing reliance on the monsoon's whims.
Rice production is fraught with dangers, according to the report. Risk concerns include high fertiliser prices, dwindling water tables, rising agricultural input costs, and asymmetric market pricing information. Other difficulties include expensive agricultural machinery rental costs, insufficient transportation, inadequate consulting facilities, timeliness, and credit cost.
Seasonal concentration, geographical dispersion, and the loss of roughly 10% of paddy/rice in processing, storage, and transport are all influenced by the diverse context. Rice milling mills are heterogeneous in terms of kind, capacity, location, services, and ownership, making it difficult to use an uniform investment, cost, and return template.
The report added, the country's rice sector faces three major threats: container shortages, insufficient rainfall, and inadequate MSP coverage.
Approximately 25,000-30,000 containers are stranded at ports due to customs issues, among other things. Because 80 percent of basmati rice is shipped in containers, exports have been impacted badly. Crop output might be harmed by erratic rains. Despite the Indian Meteorological Dept's prediction that the country would receive normal monsoon rains in 2021, farmers have planted swathes of land with rice this year due to worries of limited rainfall.
Because of limited involvement of private merchants, inadequate infrastructure, and lack of knowledge, paddy families selling their product to the APMC has decreased from 17 percent in 2013 to 2.7 percent in 2019.
According to the report, paddy/rice production in India is intimately related to wider issues such as land rights and ownership, food security, political stability, natural ecosystem preservation, and agricultural diversification. International food quality and safety standards set by the European Union, the United States, and Japan can help to boost organic production quantity and quality.
Risk mitigation techniques, crop insurance, price stability measures, focus on geographical indicators (GI) of basmati rice in India, and optimum utilisation of agro-climatic conditions can all help to minimise reliance on the monsoon in Indian agriculture.
