US-China tariff wars is giving soybean farmers hope
Tariff wars between the United States and China could provide a business opportunity to soybean farmers in central India. The imposition of an entry tax on soybean exported by China from the US could help farmers fill in the gap arising from demand for the oilseed in China. China’s demand for soybean annually stands at about 12 lakh tonnes.
Madhya Pradesh with about 55 per cent of the country’s soybean production continues to be the biggest producer. Besides MP, Maharashtra and Rajasthan are also substantial producers of the oilseed.
China is the world’s largest importer of soybean. In 2016-17, it bought over 93 million tonnes of this oilseed, with the major suppliers being the US, Brazil and Argentina. But with China clamping a 25 per cent duty on US soybean with effect from July 6, a new opportunity has opened up for India. This despite the fact that the Centre has hiked the minimum support price for this year’s soybean crop to Rs 3,399 per quintal, from Rs 3,050 for 2017-18.
The demand for soybean from China if actualised would provide the much-needed impetus for the marketing of the produce. Over the years, soybean has lost its sheen as a viable crop for cultivation in the kharif cycle owing to low prices it fetches.
This has compelled a large number of farmers to shift to cultivation of basmati paddy in MP which is an export-oriented product. While the shift to basmati has helped farmers enhance their incomes, it has brought with it a number of problems too, for example, depleting ground water levels.
The minimum support price (MSP) for soybean stood at Rs 3,050 last year and it has been increased to Rs 3,400 this year. However, the prices the oil seed fetches today is nothing compared to the Rs 1,200 per quintal levels two decades ago.
Soybean was responsible for the enhancement of farm incomes all over central Madhya Pradesh in the mid-80s and 90s helping farmers invest in mechanisation in the form of tractors, ploughs and seed drills. The crop, however, went out of favour among farmers owing to drop in international demand issues with flowering and productivity in the last few years. The demand from China, if it materialises could result in a change in fortunes of the crop.
(Courtesy of Mail Today)