Don’t curb rice exports in anxiety over evidence

Source: The post is based on the article “Don’t curb rice exports in anxiety over evidence” published in The Live Mint on 14^th September 2022.

Syllabus: GS 3 – Major crops-cropping patterns in various parts of the country

News: Recently the Centre has imposed a 20% export duty on some varieties of rice and a complete ban on broken-rice shipments.

This has delivered an instant shock to traders and exporters.

India’s reputation as a reliable trade partner was already hurt by the Centre’s decision in May to stop wheat exports. The ban came after it declared to “feed the world” in response to the global food shortages caused by the Ukraine war.

The latest decision to ban rice exports is a bigger concern to India’s reputation worldwide.

What are the issues associated with the ban on exports of rice?

Exporters

The ban and high import duty has affected the exporters.

The price of the rice has gone up and the buyers are not ready to buy at that price. Therefore, around 1 million tons of outbound rice is estimated to be stuck.

Farmers

The ban on export can also affect farmer’s income as the rice ban will increase stocks and the new harvested crops will not be bought from farmers.

Food security

India is the world’s top exporter of rice. It has shipped 21.2 million tons of rice in 2021-22.

The export ban will lead to food security concerns all over the world.

However, it is necessary for India to ensure that its citizens get enough food and domestic priority should be given more importance.

With the help of different scheme like NFSA, 2013 India has ensured that there is enough food to meet the nation demands at the time of high food inflation.

Why India should not put ban on export of rice?

The ban has been put due to the fear for food shortages in India.

There has been a deficient rain in some paddy growing states this year causing low output. Still, there are other states where paddy has grown in abundance.

Central buffer stocks are down from 31.7 million tonnes at the start of July to 24.5 million tonnes in September. However, it is still almost twice the country’s required minimum level.

Therefore, it seems that there will be price stability and enough grain supplies for the nation.

What are other concerns for India and what can be future course of action?

India has also put a ban on the exports of steel.

These measures from the government raise overall cost of doing business and goes against the perception of an open economy.

Therefore, the government should stay away from these decisions and it is best to rely on RBI for controlling the inflation.