By getting its agencies to procure wheat at sub-MSP rates and not allowing the farmers to export, the Centre has committed a double injustice.

On April 1, at the start of the new harvesting season, India's public wheat stocks, at 15.36 million tonnes, were more than twice the required minimum buffer and strategic reserve of seven million tonnes. On top of that, the size of the crop about to be marketed was reckoned at an all-time-high of 84.27 million tonnes. There could not, arguably, have been a better time to lift the ban on exports, in place since February 2007. Allowing exports would have helped farmers by creating a new source of demand, besides easing the Centre's own burden of finding space to store more grain in already overflowing warehouses. Killing two birds with one stone, in other words.

But, instead of exercising common sense, the Centre has done what has now become its trademark practice of not doing anything, even while speaking in different voices. Thus, only last week, we had the Agriculture Minister, Mr Sharad Pawar, making a strong case for opening up exports to enable the country's wheat growers take advantage of the prevailing high global prices. This Monday, however, saw his counterpart in the Food and Consumer Affairs Ministry, Mr K.V. Thomas, vehemently opposing exports, stating it would hurt domestic consumers. The result: No decision. Even if a decision happens now, it would perhaps be too late, because roughly half of the crop has been harvested and brought to the mandis. By the time an ‘empowered' group of ministers, scheduled to meet on May 2, takes a final call on the matter, the farmer will have little to gain either way. In fact, one could very well argue that exports should not be permitted, now that the farmer has already sold his crop and the chances of consumers getting hurt are higher once the main marketing season is over. It would be worse if there are trading houses that have bought up large quantities in the expectation of exports eventually being allowed — with this knowledge based on privileged official information rather than any calculated gamble.

The real loser in the entire game has, no doubt, been the ordinary wheat-grower in Uttar Pradesh, Bihar or Rajasthan. Wheat has been sold during this season in mandis such as Hardoi and Bareilly for as low as Rs 1,020-1,030 a quintal — as against the Centre's minimum support price (MSP) of Rs 1,120 plus a bonus of Rs 50. By not implementing the MSP through actual procurement of grain at this rate, and simultaneously denying the farmer the opportunity to benefit from exports, the Centre has willy-nilly committed a double injustice. The grower has every reason to be angry at the Government and may not be wholly unjustified in seeking legal redress on this count.

(This article was published on April 28, 2011)
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