Food ministry says it is not averse to export of wheat or rice

NEW DELHI: Taking a U-turn, Food Minister K V Thomas today said he was not opposed to allowing exports of foodgrains and a decision on the issue will be taken by a panel of ministers at the earliest.

The government in early 2007 had banned shipment of wheat and later in April, 2008 restricted exports of non- basmati rice.

“We are not averse to export of foodgrains. I do not mind export of some quantity of wheat and rice as there is a bumper production. There are suggestions from state governments and other ministries for exports of 2 million tonnes of wheat and 1 million tonnes of rice,” Thomas told reporters, here.

An Empowered Group of Ministers (EGoM) on food, headed by Finance Minster Pranab Mukherjee , will take a decision at on allowing export of wheat and rice at the earliest, he said.

The minister had said several times that exports could not take place in view of the huge demand of foodgrains under the proposed National Food Security Act.

The government is now facing the problem of plenty with granaries overflowing in its godowns. As on June 1, the Food Corporation of India (FCI) has an all-time-high stock of 65.4 million tonnes of wheat and rice.

Sources said that the Food Ministry, which fears shortage of space in view of bumper procurement, has already send a proposal on this issue to the Commerce Ministry.

Asked whether the government will permit export of grains stored in FCI or from the private trade, Thomas said, “Details are being worked out. The final call will be taken by the EGoM”.

He, however, said that the export should not lead rise in domestic retail price and benefit should reach to farmers.

Wheat procurement by the FCI has touched the record 28 million tonnes in the ongoing 2011-12 rabi marketing season (April-June).

India panel to decide on rice, wheat exports

NEW DELHI: India’s food ministry is not against grains exports and a panel of ministers will decide on rice and wheat exports, the food minister said on Wednesday, without specifying any time frame.

“Food ministry is not negative to exports, but we will have to look at the demand in view of the Food Security Bill. We will place the issue before EGoM (Empowered Group of Ministers),” K.V. Thomas told reporters.

India could decide soon to allow exports of a million tonnes each of wheat and common rice as government stocks hit a record 65.6 million tonnes, well above targets, two government sources said on Tuesday.

India, one of the world’s biggest producers and consumers of wheat and rice, has kept a tight control over grain exports since 2007, allowing only overseas sales of aromatic basmati rice, to ensure it can provide cheap food grains to the poor.

India’s farm minister, Sharad Pawar, has called for grain exports with stocks overflowing after three years of bumper harvests and the onset of the monsoon has raised concerns stocks outside could be damaged, adding to pressure for sales.

But concerns over food inflation, which is currently around 9 percent, and the need for supplies to fill commitments for more cheap food in a proposed Food Security Bill have stayed the government’s hand so far.

Centre likely to open up foodgrain exports

NEW DELHI: At long last, the Centre is likely to open up foodgrain exports, albeit in a capped manner. Food minister K V Thomas said here today that his ministry was “not averse” to opening up grain exports “at the earliest.”

“We’re not negative to it. We’re reviewing grain needed for servicing the right to food bill and the EGoM will take a decision soon. The core ministry has suggested in a note to Commerce that exports initially be opened up urgently “in order to advantage farmers,” based on the production estimates given by the agriculture ministry. “Whenever the EGoM meets next, this will figure on its agenda,” the minsiter said. Indications are that the farm and food ministries are keen that once exports are opened up, farmers will begin to get a good price in the open market for their produce this kharif marketing season, thereby reducing the procurement and storage pressure on the Centre which currently runs into several hundred crores in holding costs and balloons the food subsidy bill. Having had to face stringent criticism over food grain prices plummeting below declared MSP in the just gone rabi marketing season, the government wants all the more certain that farmers, in the thick of the sowing season for the summer season, will be benefitted.

Grain output targets have exceeded estimates marginally but the farm ministry had suggested that 2mt of wheat and one million tonne of rice be exported. The food ministry itself, it is indicated, is keen on one million tonne each of rice and wheat in exports. “We have to be somewhat cautious since the IMD has forecast the possibility of Below Normal monsoons,” minister Thomas said. However, there is no decision yet on the quantity and on whether exports will be from the Central pool or by the private sector. That decision is likely ot be also taken by the EGoM.

“While the foodgrain stocks with the Centre are invaluable in ensuring food security, it is simultaneously a challenge to ensure that storage and distribution are efficient and economic costs kept down,” minister Salman Khurshid stressed at a press briefing on the contentious grain storage subject here. The Centre’s food subsidy bill projections for this fiscal is an estimated Rs 83,000 crore to Rs one lakh crore.

Why the change in stance on exports, especially since the government has put off the sensitive decision for months despite a Central grain stock exceeding 65mt, citing food law needs assessment? “We’re now fairly clear on how much we will need for the food law, an average 62-65mt.,” minister Thomas said. More importantly, there are clear indications that the food law, even if approved, may be implemented for less than six months, entailing far less than annual estimate of offtake by states. That has opened up possibilities for export further.

Currently, Central procurement is around 29% of the total grain production. Once the food law is implemented, that is likely to go up close to 40%. But concerns over food inflation, now around 9%, besides the proposed food have stayed the government’s hand so far.

Significantly, the parent ministry is now preparing a draft report to submit to the relevant minister panel. The report, to be finalised within the week, will reconcile the draft food law recommndations of the NAC__recetnly cleared_ and the suggestions of the EAC. Interestingly, the draft food law has designated the mother as the head of the family primarily in order to ascertain that neither grain nor cash, should it subsitute grain in any part, is siphoned off for other uses apart from meeting the bare necessities of the family unit.

On the issue of inflationary impact of the food law on open market grain prices, Mr Thomas said “Some apprehensions have been expressed by experts and government is cognizant of the possibility. The food law is meant to guarantee essentials to the neediest in the country during times of high food prices and inflation and we as government and Congress party are committed to fulfill our poll promise on this. So we have worked out several antidote measures should inflationary pressures start showing up significantly in the open market.”

India, one of the world’s biggest producers and consumers of wheat and rice, has kept a tight control over grain exports since 2007, allowing only overseas sales of aromatic basmati rice, to ensure it can provide cheap food grains to the poor. More recently, the Centre allowed a capped quantity of select rice varieties such as Ponni and Rose Matta besides Sona Masoori for exports but the quota has yet to be used up. According to ministry sources, that is because inferior varieties are being exported, leaving better varieties for the home marekt where grain prices are firm.

Farm minister Sharad Pawar has been repeatedly calling for opening up farm produce exports including food grains and sugar, especially since stocks are overflowing after three years of bumper harvests and the onset of the monsoon has raised concerns stocks outside could be damaged, adding to pressure for sales.