Write-up taken from the IRRI's Rice Almanac (2013):
Recent developments in the rice sector
Rice is the staple food for more than half of the total population and hence a key pillar for food security. It comprised 42% of total food grain production in 2008-09.
Food grains include cereals such as rice, wheat, sorghum, pearl millet, and maize as well as pulses. Important commercial crops are cotton, jute, sugarcane, and tobacco. Average annual rice consumption has declined since the late 1990s and early 2000s, a period of moderate economic growth. This is one of the reasons India is able to maintain self-sufficiency in rice in spite of slowing growth in production.
With the support of state governments, India has embarked on various rice development schemes such as the Special Rice Development Program (SRPP) and National Food Security Mission (NFSM) Promotion of Hybrid Rice. The Indian government carries out domestic price support, procurement, and the distribution program in rice.
The Indian government implemented several policies to boost rice production. Numerous subsidies, ranging from fertilizer to irrigation, electricity, seeds, machinery, and food, are available. The government subsidizes agricultural inputs to keep farm costs low and increase production. Irrigation and electricity are supplied directly to farmers at below production costs.
The subsidy rate for pump sets, seed drills, rotavators, knapsack sprayers, power weeders, and transplanters is 50%. Power tillers are distributed at 25% subsidy to a maximum of $989. In April 2010, a new nutrient-based subsidy scheme was implemented in which farmers are given incentives to use a better mix of nutrients. It provided a subsidy on nutrient nitrogen (N), phosphorus (P), potash (K), and sulfur (S) contents for 2010-11.
There is also an additional subsidy on fertilizers carrying other secondary nutrients and micronutrients. Around 120 million farmers rely on this fertilizer subsidy. Since 2005-06, India’s Ministry of Agriculture has been implementing the Production and Distribution of Quality Seeds Scheme with the target of ensuring timely availability of quality seeds of various crops at affordable prices.
Through the Food Corporation of India (FCI), the government implements price policy through procurement and public distribution operations. The agency buys rough rice and milled rice for which a minimum support price is announced well before the commencement of the rabi and kharif seasons. They buy paddy rice directly from farmers and maintain huge rice stocks at all times. These stocks are then subsidized by the government and distributed to poorer communities across the country.
On the trading side, commitments on rice import tariffs under the Uruguay Round Agreements Act (URAA) for India are bound at 0% since 2009 up until the first quarter of 2012. The government imposed a total ban on exports of nonbasmati rice in October 2008, partially lifted it in April 2011, and removed the ban in September 2011.
The major rice-growing states are West Bengal, Uttar Pradesh, Andhra Pradesh, Punjab, Tamil Nadu, Orissa, Bihar, and Chhattisgarh, which together contribute about 72% of the total rice area and 75% of total rice production in the country.
Based on India’s agriculture statistics, the three largest rice-producing states are West Bengal, Andhra Pradesh, and Uttar Pradesh. These states contributed about 43% of the country’s rice production in 2008-09.
Rice production constraints
Although the proportion of rice area irrigated has improved slightly from about 50% in 1995 to almost 59% in 2008, large rice areas are still affected by uneven rainfall distribution. Erratic rainfall can cause drought or, in some cases, untimely submergence or flooding in some rice-growing areas.
Other major constraints to rice production that the country faces are land, labor, and other inputs (e.g., fertilizer, herbicides, and pesticides). The latest rice program and policies that India is implementing focus on these constraints. Some support is also provided to lessen the difficulty that farmers face to access inputs and to transport their produce.
Other constraints relate to the land and soil. Soil acidity is a problem in southern and eastern India, whereas, in northern India, soil salinity and alkalinity are the problem. Low soil fertility and P and Zn deficiency are widespread.
Stem borer, brown planthopper, gundhi bug, leaffolder, green leafhopper, and gall midge are major insect pests that cause large yield losses.
Rice production opportunities
There is great scope for increasing productivity since rice yields are well below potential yield and variation is large in rice productivity among the main rice-producing states.
Improvement can possibly be attained through further expansion of irrigation facilities and subsidies for irrigation, fertilizer, seeds, machinery, and appropriate technologies for increasing rice productivity in both irrigated and rainfed areas.
Source: FAO’s FAOSTAT database online and AQUASTAT database online, as of September 2012.