Unnecessary restrictions

Curbs on rice exports are ill-advised

The curb imposed by India on the export of rice, barely a few months after stopping the export of wheat and its products, seems an imprudent and ill-timed move. Barring parboiled and Basmati rice, the two premium types of this staple, the export of all other kinds of rice has either been prohibited or subjected to a high export duty of 20 per cent to virtually rule out their outbound shipment. These measures are bound to affect international supplies and prices of staple cereals, exacerbating food-security concern in several food-deficit countries. India had drawn considerable flak from global leaders and world organisations for its withdrawal from the wheat market at a time when the global grain supplies were still constrained due to the disruptions caused by the Covid pandemic and the Russia-Ukraine conflict. This was despite the fact that India was not among the main suppliers of wheat to the world market. But, in the case of rice, India is not only the world’s second-largest producer but is also the biggest exporter, commanding a sizable market share of over 40 per cent. So, a sudden halt in the shipment of rice from India is bound to create ripples in the global rice bazaar, which might even boomerang and hurt the country’s own interests by damaging its image as a reliable supplier of grains and a trustworthy trade partner.

The restrictions on rice export are hard to justify even otherwise. Though, admittedly, the area planted under paddy in the current kharif season has shrunk due to patchy monsoon rain, which has caused drought-like conditions in the vast paddy-growing belt spanning Uttar Pradesh, Bihar, West Bengal and Jharkhand, its impact on the country’s overall rice harvest is unlikely to be substantial. This is because the normal paddy yields in these states are quite meagre. Going by the official reckoning, the drop in overall kharif output might not exceed four to five million tonnes. The total rice availability might, therefore, still be close to last year’s level when the country had a huge surplus and managed to export more than 21 million tonnes of this grain. Even the government’s own rice stockholding was estimated last month to be over twice the inventory mandated to be kept as buffer and strategic reserve. Moreover, the agriculture ministry has stated that the anticipated shortfall in kharif output can be made up during the rabi season. The country would, therefore, continue to be rice-surplus.

This aside, the timing of the export ban is deemed inappropriate. It has come about just ahead of the paddy-harvesting season, which starts in the last week of this month. The slump in domestic prices as a result of this move is bound to hit the farmers’ income, worsening their distress, and adversely affecting the rural demand for industrial goods and services. Many farm organisations, including the Samyukta Kisan Morcha (the apex body of the farmers’ unions which spearheaded the year-long agitation at Delhi borders), have already begun confabulating resumption of their stir in support of higher prices and assured marketing farm produce. The ill-advised actions like cutting down exports when these are needed to ensure remunerative returns to the growers are, therefore, likely to have repercussions.