The Hindu Business Line : Rice strains

The ban on rice exports, a dubious solution to the procurement problem, has hit exporters with pending commitments and the country’s reputation as a premium rice supplier.

Is it a case of ‘once bitten, twice shy’? After the fiasco on the wheat front (procurement far below target despite higher output and firm open market prices), New Delhi seems in no mood to take chances in rice procurement this season. Given the compulsion of having to bolster procurement, the government exercised the facile option of banning export of non-basmati rice varieties. Now it under pressure to reverse track. Clearly, panic rules the corridors of Kris hi Bhawan and North Block. Food prices have stayed high enough to cause considerable anxiety, not only among consumers, but also within the policy-making circles. Did the government have a choice? Could it have done anything different, other than to put an embargo on exports and cause considerable damage to the country’s reputation as a regular and reliable supplier of rice (basmati and non-basmati)?

To be sure, despite claims of rising foodgrains output, rice production has not displayed robust growth. The last five years’ numbers show that the Kharif season output has failed to cross 78-80 million tonnes. Meanwhile, demand for all food products, including rice, has been soaring, buoyed by rising incomes and demographic pressure. Per capita availability of foodgrains is shrinking. To keep pace with demand growth and maintain consumer-friendly prices, rice output should rise byat least 3 million tonnes every year. That this is not happening is a sad reflection on the performance of the government and its farm policies. At current growth rates of production and consumption, rice runs the risk of going the wheat way. India could soon find itself a rice importer. Globally, the grains market is still rather buoyant, mainly due to a sudden demand surge from the bio-fuels sector, accentuated by some adverse weather.

Despite a firming rupee, Indian exporters have managed to garner contracts for about 700,000 tonnes of non-basmati rice, a part of which is premium rice. The merits of the decision to ban exports apart, it would be injudicious on the Government’s part not to allow exporters to honour their commitments. The quantum under question is less than one per cent of the country’s total rice output. Poor co-ordination among the Ministries of Agriculture, Commerce and Finance has resulted in ships waiting in Indian ports to take on cargo but incurring demurrage as document clearance is held up for want of clarification from New Delhi. Even 15 days after the oral announcement and 10 days after official notification of the export ban, exporters are running from pillar to post seeking the administration’s help in honouring their pre-ban commitments. The least New Delhi should do is to order clearance of pending commitments without further delay.

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