Rice is the basis of livelihood and the staple food for an overwhelming majority of the country’s population. It provides for the livelihood of nearly 0.86 billion (of the population residing in the rural parts of the country. More than 80% of the farmers growing rice in the country are small and marginal farmers for whom it is majorly a source of just domestic consumption.

The decline in rainfalls this year has brough about a drastic fall in the paddy sowing this year. The sowing has been hit mainly because of the drastic fall in the rainfall levels in the key agrarian states of the country, with UP having a 40% decline, and Bihar and West Bengal facing a 35 and 25 percent decline respectively. As per the data released by the Agricultural Ministry, as of 8th August, this fall has been close to 13%, which could result in the total production dwindling down by 10 million metric tonnes, raising concerns for an inevitable price rise.

Rural poverty is concentrated among small and marginal farmers and landless laborers (IFAD, 2001). Though rice growers, small and marginal farmers are net buyers as their production is generally inadequate to meet the rice needs of their families. Landless laborers and urban poor obtain food through market purchases only. Rice share in the total expenditure of the poor has been estimated to be 30-50 percent. With rice accounting for such a large share of total expenditure, any rise in its price is equivalent to a drop in the real income of the poor. (Pandey, 2010).  A continued detrimental geographical impact, would result in negative economic growth and inflation. Rice may pose a new obstacle in India’s fight against inflation. Since consumer prices have continued to exceed the Reserve Bank of India’s tolerance level of 6% this year, interest rates might increase significantly.

While majority farmers in India are small and marginal farmers practising subsistence farming, nearly 75% of the rice produced in the country is marketable surplus owing to the irrigated rice farmers in the northern parts of the country (FFTC-AP, 2018). The country has been the leading rice exporter in the world feeding over a hundred countries for close to a decade now, making the stability in rice of great importance to be able to ensure the political and economic stability of the country. With the intention to increase the ethanol production, the country utilizes surplus sugar and rice to cut down on the fuel costs. Siraj Hussain, a former secretary of India’s agriculture ministry suggests that the decline in paddy output should be making the government review their policy and have them choose food over fuel. At present (as of July 1) the FCI (Food Corporation of India) has a stock of 47 million tonnes of rice against the buffer 13.5 million. However, the government may have to impose certain curbs on rice exports through either minimum export prices or export taxes in case it decides to extend the Prime Minister Garib Kalyan Anna Yojana (PMGKAY), which is valid till September as of now.

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