Thomas asks Pranab to hike rice MEP to $500/tonne

Food Minister K V Thomas has requested Finance Minister Pranab Mukherjee to consider hiking the minimum export price (MEP) for non-basmati rice by at least $100 a tonne from the current $400 a tonne.  

After an over three-year ban, the government recently allowed the export of one million tonnes of non-basmati rice on private account at a low MEP of $400 a tonne. 

"I have brought this issue (MEP of non-basmati rice) to the notice of the Finance Minister as well as the Cabinet Secretary. I have informed them that the MEP cannot be lower than the procurement cost," Thomas told reporters here.

The export price of $400 a tonne is lower than the FCI's procurement cost of $500 a tonne, though global prices are ruling high at $525 a tonne, he said. 

"MEP should be at least be at $500 a tonne," Thomas noted. 

The Food Ministry has received representation from industry bodies such as the All-India Rice Exporters Association (AIREA), who have alleged that low export prices would lead to diversion of low-priced grain from ration shops for export.  

"In the face of these facts, setting an MEP of $400 defies all logic and if implemented, may lead to a scandal," AIREA President Vijay Sethia said. He said allowing rice export at a low MEP was not only against domestic traders, but also "anti-farmer".  

According to the notification issued by the Directorate General of Foreign Trade (DGFT), out of the total permissible non-basmati rice exports this crop year, a trader can export a maximum of 12,500 tonne and the list of successful allottees will be declared today.

India's rice production increased to 95.32 million tonne in the 2010-11 crop year (July-June) from 89.09 million tonne in the previous year.