New export policy rider to curb grain outflow

NEW DELHI: The Union food ministry has stipulated caveats in the new private sector subsidy-based export policy to ensure that India does not suffer from excessive outflow of wheat and rice at a time when it is especially vulnerable to hunger. Last year, when the country exported maximum subsidised foodgrains, despite a normal monsoon, if you wished to feed every Indian, each one would have got only 410 gm or two rotis daily. The commerce ministry is preparing an open-door export policy that leaves corporates free to buy grain from the open market, collect a WTO-compatible subsidy, and export it without any quantitative restrictions. The policy already has the in-principle approval of both food and agriculture minister Sharad Pawar and commerce minister Kamal Nath. The commerce ministry is learnt to have accepted the caveats proposed by the food ministry and is now finalising the mechanism to disburse subsidy. Simultaneously, it has approached the finance ministry for necessary budgetary allocation. According to the food ministry, all exporters should be asked to register their contracts online simultaneously with both the DGFT â€” the nodal agency for disbursing the subsidy â€” and the food ministry. That would ensure there is no gap in the information with food ministry about the actual quantum of volumes booked. The food ministry would like the volume of export to be monitored by an empowered committee of secretaries, with the food secretary as convenor. This way a decision taken to stop exports would be effective immediately, before further damage is done, and the Cabinet would be informed in due course. â€œAs the food ministry is responsible for ensuring adequate grain supplies, they have real-time information about inflation in prices and availability of grains. So it is the most suited to act as convenor of this committee,â€� sources said. To prevent diversion of grains meant for food-for-work programmes into the export market, the food ministry has insisted that all companies suspected of such exports should be immediately blacklisted and stopped from further trading. â€œIssuing a show-cause notice, which is the practice today, is simply not enough to halt diversion of subsidised grains meant for the poorest,â€� they added. The food ministry will also not give a subsidy higher than the amount fixed by DGFT if it ever resumes allocating FCI grain for exports. â€œThere is no reason why we should go back to the old regime of exporting grain at below poverty line rates when DGFT itself will not offer more than Rs 1,000 a tone,â€� sources said. Though India has exported five million tonnes of foodgrains in the last couple of years, it has never had a structural surplus for wheat especially. Unlike the US and Australia, Indiaâ€™s wheat production has been largely stagnant and barely able to keep pace with the galloping rise in per capita demand. Moreover, there is growing resentment in other agri-export sectors over the â€œfavourite childâ€� treatment being meted out to foodgrains by the commerce ministry. Commodities like oilmeals, for instance, which are a large forex earner today, have been ignored by current government export incentives.

New export policy rider to curb grain outflow

The Union food ministry has stipulated caveats in the new private sector subsidy-based export policy to ensure that India does not suffer from excessive outflow of wheat and rice at a time when it is especially vulnerable to hunger.

More from our Partners

Popular Categories

Hot on Web

In Case you missed it

Top Searched Companies

Latest News

Download ET APP

Follow us on

become a member