FCI to no more sponsor rly rakes for exporters

NEW DELHI: The government is likely to continue with the present policy of fixing prices for foodgrain export, based on the recommendations of the Food Corporation of India (FCI)-led high-level committee set up for the purpose. However, the committee has made some key recommendations on access to better quality foodgrain for export, transport and WTO compatible subsidy reimbursement. In addition, rules have also been clearly laid down divesting the FCI of all responsibility regarding railway rakes’ sponsorship for exporters and any resulting delay in fulfilling export obligations within the deadline. Plus, PSUs and state agencies, thus far exempt from submitting bank guarantees, will no longer be exempted, ensuring that all exporters are treated alike.
Exporters, the committee has suggested, should now “place indents directly with the Railways for allotment of rakes.�
Further, the recommendations state categorically that the offer of issuing wheat and rice for export “has no relation with export contracts of the exporters/their associates.� Delay in movement of stocks to the port towns or border points or delivery points by the exporter, due to any reason has, the committee has emphasised, “no relation to the prices fixed by the government.� These are points that will now be mandatorily worked into the agreement for foodgrain sale to exporters. However, on the request of PSUs/exporters, road movement of wheat is allowed by the department whenever there is a shortage in the availability of rakes. Exporters are allowed to move rice by road for rebagging and upgradation en route.
Foodgrain exports have been stalled “temporarily� since August 8 in view of railway rake shortage. Ministry sources were reluctant to set a timeframe for this but stressed that exports would be resumed “the instant� foodgrain for export — for which FCI has already been paid — was moved to ports successfully for delivery. Rules have also been clearly laid down for access to quality foodgrain for export. Issue of wheat and rice (up to three years old) can be made only from procuring surplus regions. Older stocks can be issued from any FCI depot or state agency depot. State pool stocks under decentralised procurement system are not eligible for direct exports. For wheat products, lifting will be allowed from states where mills are located. Lifting of wheat from procuring surplus states will be allowed only if stocks are insufficient.
No freight reimbursement for moving wheat will be allowed as the prices for procuring states are less than those fixed for other states. Transport reimbursement for exporters will be calculated on the basis of the railway freight by the shortest route from depots from where the foodgrain are lifted to the port towns or border depots of the FCI or to the delivery points of the importers or actuals, whichever is less.
The government will review and decide “from time to time� on the level of WTO compatible expenses to be reimbursed to wheat, wheat products and rice exporters, who lift stocks from the Central pool. However, priority in reimbursement of WTO-compatible expenses will be given to exporters who invest/utilise mechanised bulk handling and storage infrastructure. The element of ocean freight will naturally be reduced in the case of these to Nepal, Bhutan, Bangladesh, Pakistan and China.
Measures to prevent under pricing better quality foodgrain (such as Karnal Bunt-free stocks) or from preferred locations (such as partboiled rice from Andhra Pradesh) have also been made more transparent and stringent. According to the new rules, such stocks shall be offered at premium rates to be determined through a transparent bidding process.