Food Ministry causes loss to exchequer

The food ministry decided on Wednesday to reduce the minimum export price of wheat to $260 a tonne from $300 a tonne. Trade expects wheat exports to zoom to 7 million tonnes in the 12 months from April from 5.3 million tonnes a year earlier.

This might seem like a sound move, given the huge stocks with the government, a bumper harvest this year and the need to clear stocks to clear up storage space for fresh procurement, which the government has to undertake to give farmers their minimum support price. Yet, it is not just India that is in for a bountiful harvest of wheat. Much of the world has been seeing bumper harvests and the price of wheat has crashed.

Food analysts asked the government to export wheat six months ago. If it had allowed state-owned trading companies that export on behalf of the government to respond to market signals, analysts estimate that India could have exported 6 million tonnes of wheat six months ago at $290-300 a tonne. The failure to take a decision in time has cost us dear. The forgone revenue is not just dollar earnings but also the carrying cost of surplus wheat.

This is a tidy sum, running to a couple of billion dollars. The ministry’s failure to take timely decisions has resulted in the exchequer losing this much revenue. Shouldn’t the Comptroller and Auditor General of India ( CAG) hold the senior food ministry officials to account?

The food ministry competes with that of health for being the worst-run ministry in the country. Its criminal neglect of timely decision-making has made the government of India the biggest hoarder of grain in the world and contributed to sustained food inflation. The Cabinet has failed to hold it to account. The CAG must, at least. The food ministry has been getting away with murder for too long.