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Informist, Wednesday, Feb. 25, 2026

 

--NITI Aayog Chand: Govt's farm intervention distorting prices, export parity 

--CONTEXT: Comments by NITI Aayog's Ramesh Chand at Business Standard Manthan 

--NITI Aayog Chand: Centre must persuade states not to give bonuses above MSP 

--Farm expert Gulati: FCI rice stocks at four times buffer norm levels 

 

NEW DELHI – India must aspire to export more high-value and less resource-intensive farm products rather than pursuing volume-led dominance in low-value segments such as rice, according to NITI Aayog Member Ramesh Chand. Though India is currently a net exporter in agricultural trade, government interventions such as minimum support prices and other input subsidies are distorting prices and weakening export competitiveness, he said. 

 

"Government still keeps giving MSP to maintain stability and to de-risk the farmer from market risk... Right now, MSPs for some of our crops are higher than the international price. So if that is the case, you have surplus, but you can't export it," Chand said at Business Standard Manthan here on Wednesday.

 

Though agriculture is expanding at an annual growth rate of around 4.5%, field crop growth lags that of horticulture, livestock, and fisheries. "The lowest growth rate is in field crops, which are cereal, pulses and oilseeds. If you take away maize, then you find that the growth rate further comes down to 1.5%," Chand said, pointing out the low returns in crops that have high government expenditure through minimum support prices and input subsidies. 

 

Though India is the world's top rice exporter, it has come with hidden ecological costs. "By becoming a world power in rice, we have also become the biggest exporter of virtual water. One kg of rice that we send, it takes with it around 3,000 litres of water. Some people say even 5,000 litres of water," Chand said.

 

India has become a structural surplus rice producer, as government policies are skewed in favour of paddy cultivation, including state bonuses above the minimum support price and subsidies on power, water, and fertiliser. Experts said the Centre needs to persuade states against announcing bonuses over and above MSP, as such bonuses promote foodgrain cultivation and inflate government expenditures. 

 

"Even after giving free rice and wheat to 800 million people, being the largest exporter in the world, we still have four times the buffer stock in FCI (Food Corp. of India) than what we should be keeping. So we are literally buried under rice," farm expert Ashok Gulati said.

 

India is a net exporter of farm commodities, with exports valued at $52 billion and imports at about $37 billion. However, to continue as a net exporter, India will have to recalibrate and reform its agricultural policies and practices, Gulati said. 

 

Though India has achieved food security, it is lagging in nutritional security due to the dominance of cereal-based diets among the masses. "So business as usual has given us food security, not nutritional security, and it has damaged the planet's basic resources," Gulati said. 

 

Notably, India remains a net exporter of farm commodities due to restrictions on imports, including tariffs and non-tariff measures. "We have an agriculture sector which is too scared for it to be opened up. We export so much, we import limited because we don't import, period," Laveesh Bhandari, president and senior fellow, Centre for Social and Economic Progress, said. "The argument is, once you open, it (imports) will flood your farms or kill your farmers." End

 

Reported by Afra Abubacker

Edited by Saji George Titus

 

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