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Informist, Thursday, Jan. 29, 2026

 

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--EconSurvey: Farmers growing ethanol-related grains over pulses, oilseeds 
--EconSurvey: See tension emerging between Aatmanirbharta in energy, food 
--EconSurvey: Must ensure govt incentives don't favour one crop over others 
--EconSurvey: Need holistic roadmap balancing energy security, food security 
--EconSurvey: Energy security objectives must not compromise food security 
--EconSurvey: Farm supply prospects to strengthen farm incomes, rural demand 
--EconSurvey: Need to anchor fertiliser decisions in soil, crop requirements 
--EconSurvey: Must separate farmer income support from fertiliser purchase 
--EconSurvey: See rice, wheat procurement grow faster vs food security needs 
--EconSurvey: Need caliberated incentives to shield farmers from income risk 
--EconSurvey: Need Centre-states partnership to support crop diversification 

 

NEW DELHI – The Economic Survey 2025-26 (Apr-Mar) has urged the government to ensure that farm incentives do not favor one crop over others. It said skewed policy signals are distorting India's evolving farm support system, unintentionally driving farmers toward ethanol-related grains at the expense of pulses and oilseeds.

 

The survey said unbalanced incentives risk creating "tension between Aatmanirbharta in energy and Aatmanirbharta in food". The survey has called for a holistic policy roadmap that safeguards both energy security and food security.

 

The survey said administered pricing, procurement, and subsidy frameworks must be "calibrated carefully" to avoid encouraging excessive concentration in a few crops. "Energy security objectives must not compromise food security or nutritional outcomes," it said, stressing that incentives should remain neutral across crops and aligned with agro-climatic suitability and market demand.

 

Highlighting structural distortions, the survey noted that public procurement of rice and wheat has grown faster than underlying food security requirements. While procurement has played a vital role in stabilising farm incomes and supporting the public distribution system, excess accumulation has led to persistently high buffer stocks and rising carrying costs. "Resources absorbed by storage, handling, and interest costs could be deployed more productively within agriculture itself," it said.

 

This in the backdrop of India's rising dependence on imports of edible oils and pulses. The reason, as per the survey, is farmers increasingly preferring crops linked to assured offtake and pricing, particularly ethanol-related grains such as maize. The survey observed that ethanol pricing has created strong market signals in favour of maize, contributing to acreage and production gains, while pulses and oilseeds have seen relatively weaker growth. "Farmers are responding rationally to incentives," it said.

 

This has resulted in an emerging policy dilemma. "There is a visible tension between energy security goals and food security priorities," it said, noting that without periodic recalibration, incentives could entrench import dependence on pulses and edible oils and expose domestic food prices to greater volatility.

 

To address this, the survey has called for a comprehensive and holistic roadmap that balances energy security, food security, and farm incomes. It suggested this be achieved by accelerating productivity gains in pulses and oilseeds, avoiding price or procurement distortions that favour specific feedstocks, and planning ethanol feedstock expansion in line with regional resource endowments.

 

On crop diversification, the Economic Survey said wheat and rice farmers should be offered financially viable alternatives, particularly in regions with high procurement but modest farm profitability. Eastern and central India were identified as priority regions for the initial phase, given their agro-climatic suitability for pulses, oilseeds, and maize. Regions critical for national food security could be included later, once the approach is tested, it said.

 

Such diversification efforts, it said, would require strong Centre–state partnerships. The Centre could fund its share through savings in procurement, storage and interest costs, while states could contribute through reduced input subsidies and existing sustainable agriculture incentives. Transitional financing, where required, should be linked to verified acreage shifts and subsidy savings.

 

Beyond crop patterns, the survey flagged use of fertilisers as a growing concern. It said fertiliser decisions must be "anchored in soil health and crop-specific requirements", warning that excessive use of nitrogen has distorted nutrient balance, degraded soil quality and weakened yield response. The survey made a case for separating farmer income support from fertiliser purchase, so that price distortions do not drive overuse of specific nutrients.

 

"Income support should protect farmers, not incentivise inefficient input use," it said, adding that continued misallocation of nutrients raises costs without commensurate productivity gains and undermines long-term sustainability.

 

Despite these challenges, the Economic Survey said improving farm supply prospects -- supported by favourable monsoons, diversification towards high-value crops, and better market alignment -- can strengthen farm incomes and rural demand. Horticulture, in particular, has emerged as a major growth driver, reflecting a gradual shift in India's agricultural output mix.  End

 

Reported by Pallavi Singhal

Edited by Ashish Shirke

 

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