Agriculture and Stocking Policy in India in 2024

Source: This post on the Policy regarding Stocking and Export of Agricultural Commodities has been created based on the article “Express View on low wheat stocks: The test” published in “Indian Express” on 20^th January 2024.

UPSC Syllabus Topic: GS Paper 3 Agriculture – Storage, transport and marketing of agricultural produce.

Agriculture and Stocking Policy in India, The article discusses the drawbacks of the measures that have been taken to maintain foodgrain stocks and prevent food inflation India. It also suggests a way forward in this regard.

Background:

Agriculture and Stocking Policy in India, Wheat stocks in government warehouses are currently at a 7-year-low. According to the author, this is not a concern currently, but may become one in the future.

Steps Taken by Govt to Maintain Stocks and Prevent Food Inflation?

1. Export Curbs: Banning wheat and non-basmati white rice exports.
   For more on Ban on Rice Exports, read here.
2. Stocking Limits: Not permitting large retailers and traders to hold more than 1,000 tonnes of wheat.
3. Sale of Buffer Stock in Open Market: Selling grain from the Food Corporation of India’s stocks in the open market (which keeps the prices in check).
4. Usage Restrictions: There have been curbs on diversion of cane juice and intermediate-stage molasses for ethanol production by sugar mills.
5. Allowing Imports in certain cases: In the case of pulses and edible oils, imports have been allowed at nil or low duties to deal with supply-side challenges.
   However, this policy hasn’t been followed in the case of wheat, rice and sugar. This might be due to political pressure (as the growers of these crops are politically more organised and don’t want the price of their crops to go down due to cheap imports).

Here Are More Topics For Your Interest- 

Consensus Regarding Cooperation Between India and France

The problem with India’s science management

What can be The Emerging Challenges?

In the case of wheat, if the yield of the current wheat crop (due for harvesting from March-end) is low, it will lead to supply challenges.

What Should be Done?

1) Not putting Export or Stocking Controls: Allowing imports (like in the case of edible oils and pulses) without applying export and stocking controls is required in all agri-commodities.

2) Policy Consistency: India’s farm sector has suffered from lack of policy stability and predictability. This impacts investments in processing, warehousing, marketing and research.

3) Long-Term Vision: A strategic vision for Indian agriculture, going beyond just focusing on short-term issues like food inflation, is important.

Question for practice:

What measures have been taken to maintain foodgrain stocks and prevent food inflation? What are the drawbacks of these measures? Analyse.