Friday, 20 Jun, 2025
A robust wheat harvest is swiftly rebuilding stocks, reducing import fears and allowing it to meet domestic demand without foreign supplies, potentially easing global price pressures.
The agricultural sector has delivered a much-needed tailwind to the broader economy. According to the Ministry of Agriculture’s latest estimates, foodgrain production is projected to hit a record 354 million metric tonnes (MT) in 2024–25, a 6.6 per cent jump from the previous year and the fastest annual growth in nearly a decade. Notably, the surge reflects a potent mix of favourable monsoon conditions, policy tweaks, and expanding procurement—delivering the kind of rural rebound the government sorely needs.
Wheat and rice production have reached unprecedented levels, helping to replenish depleted food reserves and potentially easing price pressures that have dogged the economy since the pandemic. With a food subsidy bill nearing Rs 2.03 lakh crore, the timing offers fiscal breathing room for the National Democratic Alliance (NDA) government.
But the numbers tell only part of the story. This harvest is more than an agricultural success—it is an inflection point. For years, rural India has played second fiddle to urban-led consumption. Now, it’s emerging as a stabiliser in an economy grappling with tepid industrial growth and uneven post-Covid recovery. Agriculture GDP is poised to grow over 4.5 per cent in FY25, up from a sluggish 1.4 per cent the year before, helping lift incomes in politically sensitive states such as Punjab, Uttar Pradesh, and Chhattisgarh.
Yet for all its abundance, the agricultural infrastructure remains outdated. The Food Corporation of India has procured its highest wheat volume in four years—29.7 MT—but outdated warehousing and fragmented logistics networks continue to plague efficiency. Post-harvest losses for perishables still top 10 per cent in some categories, particularly in the eastern belt where storage capacity and market access are weakest.
The story is similar in horticulture. Output climbed to an estimated 362.1 million tonnes, led by bananas, mangoes, and grapes. But vegetable production fell, underscoring how value-added agriculture remains vulnerable in the absence of robust cold chains and functional mandis. A modernised supply chain remains the missing link in India’s farm economy.
India, the world’s second-largest wheat producer, recorded a 2024 wheat harvest of 113.3 MT, though industry estimates suggest the actual figure may be about 6.25 per cent lower. Looking ahead, rice production is poised to reach a record 149 MT in 2025, boosting total food grain output to an estimated 354 MT, up from 332.3 MT in 2024. Other key crops are also showing growth, with coarse cereals at 6 MT, pulses at 25 MT, and oilseeds rising to 43 MT. Notably, soybean and groundnut production are expected to increase to 15.1 MT and 11.2 MT respectively, while sugarcane output is forecast at 450 MT. These strong harvests reflect a broadly positive outlook for India’s agricultural sector.
To its credit, New Delhi has made progress on the reform front. Schemes like the Pradhan Mantri Krishi Sinchayee Yojana and soil health card initiatives have expanded micro-irrigation and made fertilizer use more targeted. Drone monitoring is catching on, and Direct Benefit Transfers have streamlined subsidies. Water levels are encouraging too—reservoirs are at 93 per cent of the long-term average, according to the Central Water Commission.
India, the world’s second-largest wheat producer, recorded a 2024 wheat harvest of 113.3 MT, though industry estimates suggest the actual figure may be about 6.25 per cent lower. Looking ahead, rice production is poised to reach a record 149 MT in 2025, boosting total food grain output to an estimated 354 MT, up from 332.3 MT in 2024. Other key crops are also showing growth, with coarse cereals at 6 MT, pulses at 25 MT, and oilseeds rising to 43 MT. Notably, soybean and groundnut production are expected to increase to 15.1 MT and 11.2 MT respectively, while sugarcane output is forecast at 450 MT. These strong harvests reflect a broadly positive outlook for India’s agricultural sector.
To its credit, New Delhi has made progress on the reform front. Schemes like the Pradhan Mantri Krishi Sinchayee Yojana and soil health card initiatives have expanded micro-irrigation and made fertilizer use more targeted. Drone monitoring is catching on, and Direct Benefit Transfers have streamlined subsidies. Water levels are encouraging too—reservoirs are at 93 per cent of the long-term average, according to the Central Water Commission.
But these gains remain patchy and insufficient. The e-NAM platform, touted as a digital revolution in farm marketing, still facilitates less than 8 per cent of agricultural trade. Real market integration and price transmission remain elusive. Inflation in rural areas fell to 2.92 per cent in April, but supply gluts don’t always translate into consumer relief without proper distribution.
On the global stage, India has cautiously reopened the export spigot. It remains the world’s top rice exporter, and recent moves to relax curbs—setting a $490 minimum export price and halving duties on parboiled rice—signal a shift back to supporting the current account, which widened to 1.7 per cent of GDP in Q3 of FY24. Still, the government must tread carefully: food security and trade ambitions don’t always align.
The record harvest is worth celebrating—but it also highlights just how much work remains. The true test lies not in what the country grows, but in how efficiently it moves grain from surplus zones to deficit areas, reduces waste, and links farmers to markets at fair prices. For a government navigating the competing imperatives of fiscal prudence, inflation control, and rural voter expectations, this moment is a golden opportunity to get long-delayed agri-reforms right.
