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Understanding curbs on rice exports

GS Paper 3

 Syllabus: Agriculture

 

Source: TH

 Context: The Indian government has implemented several measures to regulate rice exports and ensure domestic food security, including a 20% export duty on par-boiled rice until October 15 and restrictions on white rice exports.

 

Status of Rice production and export:

  • India is the second-largest producer of ricein the world, after China.
  • India is the world’s largest exporter of rice, with a 45% share.
  • Non-Basmati rice exports have been on a consistent upward trend over the past three years.
  • Decreased production: The latest rice production estimate in India for the Rabi season 2022-2023 indicates a decrease of about 14% compared to the previous year.
  • The government has increased the Minimum Support Price (MSP) for rice.

 

Recent government restrictions on Rice exports:

  • In May 2022, the government banned wheat exports.
  • In June 2023, restrictions on stock holdings were imposed.
  • In September 2022, the export of broken rice was prohibited, and a 20% tariff was imposed on non-parboiled white grain shipments.
  • In July 2023, non-basmati white rice exports were entirely prohibited, with only parboiled non-basmati and basmati rice allowed.
  • Recently, a 20% duty was introduced on all parboiled non-basmati rice exports.

 

Why is the Indian government imposing restrictions on rice and wheat exports? 

  • Enhancing Domestic Supply: The government’s goal is to reduce exports to ensure an adequate supply of grains within the country.
    • There are concerns about depleting rice stocks, especially in light of the free-foodgrains scheme’s continuation pressure (Pradhan Mantri Garib Kalyan Anna Yojana)
  • Impact of monsoon/El Nino: It includes potential declines in rice production in several Indian states. El Nino may affect new crop arrivals.
  • Tackling Inflation: Retail food inflation was at 1.5% in July, and the government is taking measures to control rising food prices.
  • Preventing Illicit Exports: The minimum export price rule is meant to prevent illegal exports of non-basmati white rice from being misrepresented as basmati rice.

 

The government’s initiative to limit rice and wheat exports faces several issues:

  • Enforcement Challenges: Export limitations can be bypassed through inaccurate classification. White non-basmati rice has been exported using codes intended for parboiled and basmati rice.
  • Excessively High Minimum Export Price: The $1,200 Minimum Export Price is considered too high. Only specific rice varieties achieve these prices, accounting for just around 15% of basmati exports.
  • Impact on the earnings of farmers

 

Suggestions and the way ahead include:

  • Consider classifying rice for export policy decisions as common and speciality rice, rather than just as Basmati and non-Basmati.
  • Protect varieties of rice with Geographical Indication (GI) recognition from general market interventions.
  • For Basmati rice, permit exports to continue or set a minimum export value, such as $900 per tonne, as new crop arrivals are expected to meet demand due to good quality and consistent supply.

 

Conclusion

Government’s actions aim to strike a balance between safeguarding domestic interests and maintaining a competitive presence in the global rice market. The situation will become clearer by mid-September, as factors like crop arrivals and government policies evolve.

 

Insta Links:

Direct seeding of Rice

 

Prelims Links:

What is/are the advantage/advantages of zero tillage in agriculture? (UPSC 2020)

 

  1. Sowing of wheat is possible without burning the residue of the previous crops.
  2. Without the need for a nursery of rice saplings, direct planting of paddy seeds in the wet soil is possible.
  3. Carbon sequestration in the soil is possible.

 

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 and 3 only

(c) 3 only

(d) 1, 2 and 3

 

Answer: D

 

The lower Gangetic plain is characterised by a humid climate with high temperatures throughout the year. Which one among the following pairs of crops is most suitable for this region?

(a) Paddy and Cotton

(b) Wheat and Jute

(c) Paddy and Jute

(d) Wheat and cotton

 

Answer: C