Prospects of India's Demand and Supply for Agricultural Commodities towards 2030

Demand and supply projections are crucial for formulating farsighted agricultural and food policies to sustain food production, ensure food security and for the efficient functioning of food systems while controlling for external factors such as changing consumption basket, taste, and preferences, changing population growth and income growth. Against this backdrop, the present study estimates demand and supply projection of major agricultural commodities such as cereals (rice, wheat, coarse cereals), pulses, milk, meat, sugar, fruits, and vegetables up to 2030-31 under alternative per capita income growth scenarios. Prior to forecasting demand and supply projections up to 2030-31, the study has validated the adopted methodology to assess the forecasting performance of the model. A review of earlier studies reveals that, for assessing the demand projection, most studies used per capita consumption of agricultural commodities from the latest National Sample Survey Organisation’s consumption expenditure survey round (2011-12). However, since the food basket has registered significant change over the years, the present study has adopted an absorption approach to project demand for agricultural commodities where the absorption of a commodity is estimated after deducting changes in government stocks from the summation of production and net imports. Expenditure elasticity used for demand forecast in this study is compiled from Kumar et al. (2011) as well as Niti Ayog’s Working Group (WG) Report on the Demand and Supply Projections towards 2033 (2018).