Good rainfall, India's incentives structure driving rice production boom, says economist Ashok Gulati

New Delhi [India], October 30 (ANI): Rising rice production in India, a key producer, is being driven by a combination of factors, good rainfall and an incentive structure that favours paddy cultivation, according to noted agricultural economist Ashok Gulati, and Professor at the Indian Council for Research on International Economic Relations (ICRIER).
Explaining the reasons behind the increase, Gulati, talking to ANI on the sidelines of the Bharat International Rice Conference 2025, said on Thursday, "This year there was very good rainfall, relatively abundant, some places even flooding. And rice is a water guzzler, so it prospers there."
He added that India's farm policies and input pricing further push farmers toward rice.
"Second, I think the incentive structure that we have for different crops in terms of pricing of inputs, especially fertilisers, water and power, they in a way are skewed in favour of rice. Because rice uses a lot of power, and if power is free, then it gives them good profit margins."
Economist Gulati noted that irrigation has also expanded considerably, encouraging farmers to cultivate rice.
"Rice, because of this incentive structure and because of good rainfall, our irrigation ratio of the total crop area has been increasing. It used to be 40% and now it's more than 50%. So, wherever irrigation is available, farmers have a reliable water supply. They want to go in for rice. It's relatively a steady crop," he continued.
He also pointed to state-level procurement policies as a major factor in reducing market risk for farmers.
"And in certain states, government has open-ended procurement, like in Punjab or Haryana or Telangana or Andhra. So that reduces the market risk of the farmer. And that gives them good margins and that leads to more production, more stocks, more exports," he explained.
While rice production has risen sharply, Gulati emphasized the need to move beyond calorie security to nutrition security:
"You (we) need to put nutrition into the stomach. And therefore, nutritional quality of the crop, especially rice, needs to improve," he suggested.
India produced around 150 million tonnes of rice in 2024-25 from nearly 47 million hectares--about 28% of global output--with average yields improving from 2.72 tonnes per hectare in 2014-15 to about 3.2 tonnes per hectare in 2024-25, owing to better seed varieties, agronomic practices, irrigation coverage, technology adoption, and supportive policies.
The mega rice conference targets Rs 1.80 lakh crore in new rice import markets currently sourced from India's competitors, with Rs 25,000 crore worth of export MoUs/contracts identified, organisers have said earlier. (ANI)