Wheat Industry Overview
The so-called Green Revolution that began in the late 1960s helped establish India as a major world supplier of wheat. Production is concentrated in northern areas, including the states of Uttar Pradesh, Punjab, and Haryana, which combined account for nearly three-quarters of the crop.
But rapid increases in yields through the 1970s began to falter in the 1980s. Degradation of soils, and declines in water tables due to overuse, also contributed to slowing production. Some farmers began to move into more lucrative crops like oilseeds, and urban expansion occupied some former agricultural lands.
India currently produces nearly 100 million tonnes of wheat a year, second only to China (green and purple bars, respectively). The left chart above shows the top-five producers of wheat globally in tonnes. At right, India’s main wheat-producing regions.
India’s wheat supply reached a crisis in 2006, when drought decimated production and wheat stocks tumbled. The government lifted import duties, leading to the highest wheat-import volume in 30 years of 6.7 million tonnes. To rebuild stocks, the government also banned wheat exports, a measure that wasn’t revoked until 2011. India became a net wheat exporter once again, recording record exports of 8.6 million tonnes in 2012.
A similar situation repeated itself in 2016. Drought conditions resulted in production declines, causing the government to lift import duties, which led to India becoming a net wheat importer. In 2018/19, India is expected to import some 1.5 million tonnes of wheat, mainly from Australia, Russia, and Ukraine, according to the USDA. The imports will mainly be of high-quality wheat for Indian millers to blend with domestic product to meet quality requirements. India will export in the current year an expected volume of 400,000 tonnes of wheat to neighboring Nepal and Bangladesh, which are import-dependent.
India has historically been a net exporter of wheat, but domestic consumption levels are straining supplies. Droughts forced the country to sharply boost imports (green bars in chart above) in 2006 and again in 2016.
India’s agricultural sector accounts for 18 percent of the country’s GDP. Some 75 percent of the country’s annual rainfall comes from the monsoons, in June to September, making this period critical to a variety of crops. In the current year, monsoon rains were erratic, but much of the northern, wheat-growing regions received favorable precipitation, boding well for the wheat crop.
This year’s monsoon season (June to September) brought average precipitation overall across India, but rainfall was inconsistent. Wheat-growing regions in the north mostly received favorable amounts of rain ahead of crop planting. The above visualization shows precipitation anomalies from the 10-year mean at the time of wheat planting in September. Areas in blue represent above-average precipitation, while areas in red indicate below-average precipitation.
Wheat production is a high priority for India’s food security. But amid restraints to increasing the amount of acreage planted, the country needs to improve yields. The government has several programs underway to enhance production and productivity. These aim to increase wheat productivity through greater public investment in agriculture, better farm planning and management, and increased adoption of agricultural technology by farmers through government “safety shields,” such as premiums for their crop.
Government intervention in the form of procurement and minimum price support programs has been utilized to provide safety nets for both India’s wheat-producing sector and consumers. Costs of production are calculated and used to recommend a minimum price for wheat, which is announced by the Food Corporation of India. Wheat is then procured by the government and distributed to low-income households via public distribution systems. Since the early 1990s, procurement levels rose from 8 million to 28 million tonnes of wheat.
India produces nearly 100 million tonnes of wheat, but domestic consumption is rapidly increasing, causing the country to rely on imports when production lags.
A longer-term threat: Wheat is particularly susceptible to climate change. The crop is very sensitive to extreme heat and water stress, especially during the critical growing stages of root initiation and grain filling. Some research is being conducted by public sector research institutions to develop genetically-engineered (GE) wheat in India that is more stress tolerant. But the advancement of research has been constrained by regulatory approval and government policy uncertainty.
Gro’s Yield Model for India Wheat
Gro’s India wheat yield model, scheduled to go live later this month for the current growing season, has been fully backtested, and then trained against district-level wheat-yield data from the India Department of Agriculture & Cooperation (IDAC). Performance-wise, by the end of April, 72 percent of India’s districts were predicted within 0.48 tonnes per hectare. At the country level Gro predicted wheat yield within a 5-percent error rate, on average, from 2001 to 2016.
In developing the India wheat yield model, Gro needed to compensate for the lack of existing crop masks for the country’s crop regions, a similar problem overcome in the earlier development of our Argentine soy model. So, we created our own crop masks for India using classification algorithms on planting and growing season Landsat imagery. In addition, the model takes NDVI (masked by the wheat specific masks) and FEWSNET ET anomalies (which measure water abundance) as inputs.
Once the in-season model goes live, subscribers will be able to sign up to receive daily updates on Indian wheat yield forecasts to help make predictions about production, trade, and global wheat supplies.
Wheat production is very important to India’s agricultural industry, economy, and the well-being of the country’s consumers. Historically a net exporter of the grain, India now struggles to produce enough wheat to keep up with growing demand. As the country shifted to being a net wheat importer in 2016, government procurement, minimum price support, and investments in the wheat industry were ramped up to address the industry’s concerns about future output. Wheat production also faces threats from climate change, as the crop is more sensitive to environmental stressors than others. The future of India’s wheat production will depend on how the industry responds to a changing environment and rising consumer demand.