Performance and macro-economic scenarios of rice market outlook in India

Abstract

The study looks into past trends and volatility in the demand and supply components of the last 50 years (1970 to 2019) besides assessing the reliability of macro-economic scenarios of rice by 2020 to 2030 published by OECD and NITI Aayog. The study infers the growth in the area under rice cultivation is 0.30 per cent per annum but yield growth is 1.79 per cent per annum. Yield growth rather than area growth would drive future increases in rice production. Scanning of scenarios of reduced rice land revealed that India would need to boost its rice yield by a maximum of one tonne per hectare to maintain future output levels. The reliability of the projection of rice by OECD and NITI Aayog is very high since the mean absolute percentage error of demand is below 2 per cent and of supply is below 16 per cent. Discussion on future outlook suggests that India needs to either boost up its agri-infrastructure or free up some of its rice area in favour of resource conservation and crop diversification. The outlook for rice throws light on upcoming possibilities and challenges and suggests recommendations for alternative policy options to address the dynamics in the rice sector.