About two months back, I was passionately arguing with my friend on taxing agriculture produce. I was against it as it will lead to reduced agriculture produce and famine in India. My friend did not have a good grasp of things and argued that wealthy agriculturists are being left untaxed and are living a plum life. I tried to explain him that in a society, we have to aim for "greater common good". Its OK to leave 10 people free from taxing if you can provide food for 100 people who would otherwise be starving.

 I recently read S.Swaminathan of CCS write on the pathetic state of Indian agriculture.

In 2002, India had massive grain stocks of 63 million tones, much of which was exported at a loss. But today wheat stocks are almost zero, and the government has decided to import three million tonnes.

Why has India gone from food surpluses to deficits? Because its population has risen while food production has stagnated or fallen for six years (see chart). Grain output in 2005-06 is estimated to be no higher than the 209 million tones reached six year ago. Wheat production peaked at 76.4 million tones in 1999-00, and then declined (the current harvest is estimated at 72-73 million tones). Rice production peaked at 93.3 million tones in 2001-02, and is estimated at 87-88 million tones this year. The output of pulses has stagnated at 13-14 million tones.

Foodgrain output (million tonnes)

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06(est)
Rice 89.7 85.0 93.3 71.8 88.3 85.3 87-88
Wheat 76.4 69.7 72.8 65.8 72.1 72.0 72-73
Coarse 30.3 31.1 33.4 26.1 38.1 33.9 34-35
Pulses 13.4 11.1 13.4 1.1 14.9 13.4 13-14
TOTAL 209.8 196.8 212.9 174.8 213.5 204.6 206-210


We now are starting to import wheat, we will soon start others like pulses, sugar etc. If that happens, look out for the prices.

UPDATE 1: After I have finished writing this post, one of my friends emailed me that already SUGAR prices are very high in the market. Rs24/Kg and govt is trying its best to keep it low.

UPDATE 2: This is even more interesting ,

A huge gap in sugar prices between Bangladesh and India has prompted some Indian traders to unofficially export the goods to Bangladesh.
So far about 150,000 tonnes of sugar have been exported to Bangladesh through the West Bengal route as Bangladesh is facing sugar crisis, an Indian media reported Wednesday.
"There is a huge gap in domestic prices between two countries and our traders are taking advantage of it. Traders are lifting sugar through free sale quota from mills and export it illegally to Bangladesh," a local trader was quoted by an India media as saying.
Domestic prices of medium grade (M-30) sugar in Bangladesh are ruling around Rs 35-40 a kg (Tk 54-62), while open market prices in eastern region are hovering around Rs 22-23 per kg (Tk 34-35).