The Hindu Business Line : WTO-compatible policy to aid grains exporters

FOODGRAIN exporters may be reimbursed up to Rs 900 per tonne on shipments of wheat and Rs 1,000 per tonne in the case of rice, as part of the Government's new World Trade Organisation -compatible foodgrain export policy.

The policy will be taken up for consideration at the meeting of the Cabinet Committee on Economic Affairs (CCEA) here tomorrow, according to official sources.

While the proposal for a WTO-compatible grain export re-imbursement scheme was originally mooted by the previous Government in January, the new Government, particularly Mr Sharad Pawar's Food Ministry, has been lukewarm to the idea.

This is despite the proposed scheme not involving exports out of the Central pool stocks held by the Food Corporation of India (FCI). Instead, it envisages exporters buying grain directly from the market and claiming a fixed per tonne re-imbursement after furnishing proof of export.

The Food Ministry, however, feels that promoting exports should not come at the expense of the country's food security and there has to be periodic assessment of the overall domestic availability situation, particularly in the context of rising prices of essential commodities. Moreover, current grain stocks in the central pool, at about 30 million tonnes, are just a little higher than the normative minimum buffer norm. Also, there has been a decline in area under paddy this year, which, along with lower yields due to inadequate rains, could reduce rice procurement, putting further pressure on stocks and the Government's ability to intervene in the market.

The sources said that the Finance Ministry has approved an allocation of Rs 600 crore for the proposed re-imbursement scheme, which will facilitate exports of about six million tonnes this year. But the Food Ministry has insisted that even if the scheme gets clearance, it must be subjected to daily monitoring by an Empowered Panel of Secretaries headed by the Secretary, Food and Public Distribution.

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