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The wheat dilemma

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Dr Ved Pratap Vaidik

Till last month the incumbent union government has been boisterously boasting of an overwhelming production of wheat in the country.  Domestic production of wheat was estimated to surpass 110 million tonnes and during the current fiscal India would export the maximum to earn billions in terms of Forex.  There was a possibility of increasing shortage of wheat across the globe, thanks to the continuing Russo-Ukraine war.  But surprisingly our government abruptly declared a ban on wheat export.

The prime reason for such a drastic step could be the slump in production of wheat, may be due to severe heat condition during the months of March, April and May. Last year during the same season the government had procured over 40 million tonnes from farmers and its warehouses were full to the brim. But for reasons best known to the authorities, the government had procured just 20 million tonnes of wheat this year. This is the first time in the past 15 years the government procurement plummeted so low and its storage dwindled perilously low.

During the current year the government was optimistic of crossing 110 million tonnes in wheat production and projected to export about 15 million tonnes.  Contradicting its earlier claims the government now scales down the expected domestic wheat production this year to below 100 million tonnes.

 Agreements for export of about 45 million tonnes were signed between various agencies of which about 15 million tonnes have already been dispatched to their destinations.  Apart from this India had sent thousands of tonnes of wheat to Afghanistan and Sri Lanka. Now the reasoning behind the sudden ban on wheat export is to facilitate the free distribution of food grains to about 80 crore people. The other reason being unexpected price escalation of wheat from Rs 20-22 Rs per kilo gram to Rs 30 and more, in the open market.

It is a fact, the price of wheat in the international market has shot up and India could have made good of the market condition to gain fortune. But the government apprehended the prices to go up if the export continued unbridled and that could lead to a severe crisis. The government’s apprehension was genuine, but the reality is if the export is stalled the income of our farmers are likely to dwindle drastically. The cultivators will be compelled to dispose of their produce at a much lower price. The traders who procure the wheat at cheaper rate are likely to stockpile the wheat they have bought from the farmers at cheaper rate to sell the same at a much higher price at the event of shortage in the market. But the government decision to ban export is sure to puncture the dream of the profiteers who expected to reap a fortune. The ban is likely to bring down the prices of wheat, for sure. As I said, more than the farmer’s traders are to be the losers.  

If the government so desired, it could have increased the export price of wheat. Such a move would have reduced the quantum of exports but increased the income of the government. Had the government   procured wheat at a slightly higher price from the farmers, the storage could have doubled.

 The Sri Lankan fiasco might also have impelled those at the helm of power to impose the export ban to preempt any possible public upsurge on account of inflation and price rise of food materials

*Dr. Vaidik is a widely travelled scholar-journalist. He has visited more than 80 countries on diplomatic and educationalmissions. Dr. Vaidik has won more than a dozen National and International awards for academic and journalistic excellence. He has been a member of several Advisory Committees of Government of India.

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