Why self-sufficiency matters

Perspectives

Many scholars and policymakers suggest it's high time India gave up the idea of self-sufficiency in foodgrains and, instead, relied on international trade, importing what it is not good at producing and exporting produce it has a comparative advantage in. The problem is this does not take into account the capacity of the global agricultural market and the impact on it when India starts procuring from it. FAO statistics show that the levels of exportable surplus, for instance, are very low "" just 0.34 percent of world's total rice production goes to the international market while in case of wheat it's only 2 percent (average for 2000 to 2005). To put these figures into perspective, the world's total rice exports are only about 2 percent of India's rice production, while in the case of wheat it is only 16 percent. In the case of cereals, this is around 50 percent of India's production; in pulses, the world's total exports are only 10 percent of India's production.

Not surprisingly then, that according to one estimate, if India imported just 2.5 million tones of rice, this could result in a 24% hike in world prices "" doubling the import quantity would increase prices three times.

(The author works for ICRIER. The views are his own)