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After several years, India is buying wheat from international markets. The government has announced plans to purchase 3.5 million tonnes. The decision is prompted by rising prices in wheat markets where the government has been unable to compete with private domestic purchasers. A look at food trade flows, and what's next. It didn't take long. A mere two months before the Rabi harvest of wheat, the Congress-led UPA Coalition has turned India into a net importer of wheat. The turnaround from being an exporter to a net importer, and that too after a gap of four decades is happening at a time when there is no shortage of wheat in the country. With increased output, there is a good stock in the country. The justification: bringing down of retail prices, which have been rising over the last few months, especially in the Southern States of Kerala and Karnataka. On the contrary, the private traders and MNCs are taking advantage of the removal of stocking limits and resorting to large scale stocking, creating artificial shortages and a consequent rise in prices. Government agencies, unable to procure enough wheat due to low purchasing price offers, resorted its option to import grains from overseas market. So, in a few weeks, the ministry announces a quantum jump in imports-from 0.5 million tonnes to 3.5 million tonnes. The initial decision to import wheat was taken in February this year, when the stock in the Central pool was 4.8 million tonnes. The average monthly offtake of wheat from the central pool is about 1.1 million tonnes; the stocks, therefore, were sufficient to meet the needs of the public distribution system and other welfare schemes till April, the beginning of the harvest season. Soon after the first tender for import of 0.5 million tons of wheat was contracted with the Australian Wheat Board (AWB), the international prices of wheat went on an upward swing. From an average of $131 a tonne, the AWB managed to bag the contract at $178.5 a tonne - an increase of 56 dollars a tonnes. Industry analyst, however, propose that India is deliberately weakening its bargaining position in WTO by unnecessarily resorting to wheat imports against zero duty and relaxed quarantine norms when the granary is full. Meanwhile, the first consignment of the contracted wheat imports from Australia arrived at Chennai in the last week of April. Interestingly, in the first week of March when wheat harvesting begins in central India, AWB was buying wheat directly from farmers, at a price much lower than what it supplies to India. In other words, while the government is willing to pay foreign companies an equivalent of approximately Rs 9,500 per tonne (including all costs), it allows the same companies to purchase from within the country at a much lower price - around Rs 7,000 per tonne. Industry analysts deem this as a complete somersault as far as the national food policies are concerned. Self-sufficiency in food is being sacrificed at the altar of economic liberalisation. Market is the new agricultural mantra that for some strange reasons actually allows unnecessary imports and exports. What makes the decision to import wheat appear preposterous is the fact that while the government allows private agribusiness companies to purchase wheat at a low price within the country, it actually is importing wheat at a much higher price. But is there a crisis on the wheat front? Where has all the wheat gone? The fact remains that there was no fall in wheat production. In fact, farmers have produced more than what the government procurement agencies can handle. It is only because the government has time and again frozen the procurement prices, and given enough indications that it intends to withdraw from public procurement that farmers have refrained from making any serious effort in increasing productivity. In fact, twice in past few years, the government had frozen the wheat procurement price saying that the minimum support price (MSP) had become the 'maximum support price'. It is primarily India's 'food security' that is at stake. First, it was the Yellow Revolution, than the White Revolution, and now it is the turn of the Green Revolution, the government appears keen to remove all the colours that pulled this country out from the hunger trap. In early 1990s, the government itself helped destroy the Yellow Revolution in oilseeds so assiduously built. It allowed cheaper imports of edible oil to 'reduce prices for consumers'. In turn, it turned India into the world's biggest importer of edible oils. The next on the hit list was the White Revolution. Forcing the collapse of the dairy cooperatives through private participation and political indulgence, the milk sector is now ready to be milked. It is now the turn to pull the curtains on the Green revolution. First wheat, and then rice, the entire effort is to take to bits what made India the prized seat of food self-sufficiency and, instead, provide an enabling environment for the markets to thrive.
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