The Hindu Business Line : eGoM to review ban on non-basmati rice

“The Government can fix a quantitative ceiling for non-basmati exports or institute the mechanism of minimum export price to regulate the outflow of rice and to ensure adequate domestic supply.”

G. Srinivasan

New Delhi, Aug 4 The empowered Group of Ministers (eGoM), under the chairmanship of the Union External Affairs Minister, Mr Pranab Mukherjee, is meeting here on Tuesday to take a call on export of 2.25 lakh tonnes of non-basmati rice as part of shoring up diplomatic relations with countries in Africa and in the sub-continent even as the Government had clamped a ban on export of non-basmati rice a couple of months ago.

Official sources told Business Line here that considering the high international prices of rice and the requests from different countries for export of non-basmati rice by India, the review meeting is to consider some relaxation of the ban for the apportionment of rice with the Ministry of External Affairs setting the quantum of export for each country. The requests had come from Sierra Leone, Sri Lanka, Mauritania and the Republic of Ghana.

Trade sources contend that under the extant policy of blanket ban on export of all non-basmati rice, premium varieties such as Ponni and matta (red rice) are being treated on par with varieties meant for public distribution and below poverty line (BPL) families.

While the composition of the non-basmati rice variety meant to be selectively exported for beefing up diplomatic relations is not known, the sources said that exports would be canalised through central public sector undertakings, nominated by the Department of Commerce.

Current prices

Currently, the price for non-basmati rice domestically is $400 a tonne, while the same abroad fetches $700 a tonne, while the premium varieties such as Ponni are being sold at $850 a tonne abroad.

The South Indian Rice Exporters Association Secretary, Mr P. Vishnukumar, said that when the Government made an exception after the ban on non-basmati rice was clamped to ship 6-7 lakh tonnes of non-basmati rice in April this year and is now contemplating to send another two lakh tonnes, how could it “justify” prolonging the ban on premium varieties which do not upset the food security as much as the coarse varieties do.

He said that the association has been representing to the Government for export of Ponni rice with certain riders, which could be small quantities of around 25,000-30,000 tonnes in consumer packs through Chennai and Tuticorin ports so that the large number of expatriate population overseas would benefit.

He said that in the absence of their preferred Indian rice, most of them have reluctantly switched over to Thai rice or other varieties which only help overseas farmers from realising the higher and premium price with Indian farmers cultivating this variety realising no commensurate remunerative returns.

Quantitative ceiling

Echoing similar view, the All-India Rice Exporters Association President, Mr Vijay Sethia, said the Government should identify varieties required for PDS/BPL which the Government agencies such as Food Corporation of India have been buying and leaving other varieties to be allowed for exports.

He said the Government could fix a quantitative ceiling for non-basmati exports or institute the mechanism of minimum export price as in the case of basmati rice exports to regulate the outflow of rice and to ensure adequate domestic supply.

Trade policy analysts argue that if the intention of the Government is to beef up diplomatic relations with the poor African countries, the export of non-basmati rice could be sent gratis as a gesture of goodwill. But, picking up some state trading agencies to procure non-basmati rice from domestic market and asking them to ship to some chosen destinations would only cause undesirable practices among the entities in the purchase of grains from private parties and shipping them mostly on free-on-board on a government-to-government basis.

This would help the benefits purely being partaken by canalising agencies and private suppliers of rice, leaving the growers of this rice none the better, they said.

Related Stories:
Minimum export price of non-basmati may be hiked
Floor price for non-basmati exports notified
Govt eases ban on non-basmati exports
Non-basmati rice prices crash on export ban

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