India dominates world trade in rice, but at what cost?

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By Prof. D. M. Deshpande

India overtook China as the largest producer of rice in the world this year. Indeed there was some jubilation at the feat achieved, especially in political circles, but it was muted. Both farmers and the government were applauded for their resilience and innovative policies respectively. However, by and large, farmers were in a less celebratory mood. Uncertainty looms large as excessive use of ground water is becoming unsustainable. Experts have been warning consistently against excessive mining of ground water.

India accounts for 40% of world’s trade in rice; in the latest fiscal year it has exported 20 million metric tons of rice. This domination has been successfully used for diplomacy at international levels. The government has leveraged it for strengthening India’s position and bargaining power. However, these gains are short lived and moreover they need to be weighed against the huge environmental cost entailing production of rice. Punjab and Haryana, are the two states that are referred to as the ‘rice basket of India’. While in other parts of India, farmers depend on a mix of surface water and ground water for cultivation, Punjab and Haryana almost entirely rely on groundwater. As a result, water tables are receding at an alarming pace in north west India. Even the strong monsoon rains of the last two years have not been of much help to recharge the aquifers. According to government data for 2024 and 2025, two states extract between 35% to 57% more ground water than what rain water can replenish naturally. As a result, the Indian government has classified water levels in the two states either as ‘over exploited’ or ‘critical’.

A decade ago, one could get water by digging 30 ft.deep in this region. However, in the last five years drainage has accelerated so much that to find water farmers have to drill 80 to 200 ft. beneath the earth’s crust. This state of affairs is also corroborated by the government data and research by Punjab Agricultural University. Every year as the water table drops farmers have to spend more on borewells. While rich farmers with bigger farms manage to earn profits by navigating subsidies and fetching water from greater depths, the same can not be said about the small and marginal farmers.

State governments too have made some attempts to salvage the situation. Local authorities banned digging of new borewells in 2023 in critically exploited zones. However, reports suggest that it resulted in over use of existing borewells. The government of Haryana ushered in an ambitious scheme, the first state to do so, to divert farmers from cultivation of rice to millets. Growing millets has been trending in recent times due to perceived health benefits especially in the urban parts of India. In addition, the central government too is promoting switching to producing millets that consume much less water. This is also in line with changing food habits of the middle class with gradual rise in incomes.

In order to incentivise millet cultivation, the Haryana government offers a subsidy of Rs.17,500 per hectare. However, the scheme has failed to attract large-scale adoption. The reasons are not far to seek. One, it is a one time subsidy while according to Ashok Gulati, agricultural economist, transition needs at least a five year period subsidy to induce farmers to make a long term switch from rice to millet. Second, a research study estimates the cost of all related subsidies including free power in Punjab amount to Rs.39,000 per hectare of rice cultivation. Even a subsidy of Rs.35,000 may prove to be an adequate compensation for farmers to change over to crops that need less water.

Third, rice and wheat dominate the purchase by state agencies at Minimum Support Prices (MSP). Due to legacy and political issues, rice MSP has risen by approximately 70% over the last decade. This gives a sense of assured return to the farmers. On the other hand, millets do not figure high in the list of crops bought by state agencies at MSP. Haryana and Punjab are also the states where the farmers get the maximum benefit from purchases in Mandis at MSP rates. Initially subsidies were crucial to feed the teeming population of India.  India has become the nation with the largest population of 1.4 billion people; yet it has not only achieved self sufficiency in food grains, it has emerged as the top exporter of rice. However, in effect, water stressed India is catering to the needs of the world by paying a huge cost. And worse, the same is borne by governments! According to a ScienceDirect study, producing 1 Kg of rice needs 800 to 5000 litres of water with an average of 2,500 litres. This is between 20% to 60% more than the global average as per farm policy experts. In effect, water stressed India is exporting water with every grain of rice exported!

To stop it, it needs a multi-pronged strategy. The ICAR Indian Council of Agricultural Research has recently unveiled 184 new improved varieties of seeds across 25 crops aiming at boosting productivity, improving quality and enhancing climate resilience. The premiere institute has tied up with state agricultural universities in its research initiatives. It needs to be tasked with finding newer and better varieties of paddy seeds and/or better farming techniques that consume less water. Governments-central and states- should join hands in devising incentive schemes that encourage farmers to switch crops. Care must be taken to see that not only farmers’ present incomes are protected but are also enhanced. MSP needs to be broad based rather than just concentrating on two crops, as is the case presently. Finally, parts of east, western coast and regions in south India receive copious rainfall that suits paddy cultivation. It makes sense to make every effort to shift rice cultivation to these places. Proactive measures are needed to bring about a meaningful and sustainable change.

The author has four decades of experience in higher  education  teaching and research. He is the  former first vice-chancellor of ISBM University, Chhattisgarh

 

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