While farmers are likely to benefit from exports amid bumper harvest, food security campaigners urge caution
While farmers are likely to benefit from exports amid bumper harvest, food security campaigners urge caution
Russia and Ukraine account for about 25% of the world’s wheat exports. However, Russia’s invasion of Ukraine and subsequent Western sanctions against Moscow have cut their wheat supplies drastically. As a result, many countries which were sourcing wheat mainly from these two countries are now in dire need of alternatives.
India, the largest wheat producer after China, is eyeing zero. The government plans to allow an increase in exports to capitalize on the higher price of wheat in the international market.
However, food security campaigners stress the need to prioritize local prices and ensure adequate supplies for domestic consumption before deciding on export volumes.
minimum export
While Russia and Ukraine exported 183 and 91 million tonnes (MT) of wheat, respectively, between 2017 and 2021, India exported a small fraction of its production, or just 12.6 MT, in this period. Five other countries took part in wheat exports during this period, including the European Union (157 metric tons), the US (125 metric tons), Canada (112 metric tons) and Australia (83 metric tons).
India, which had the second highest supply of wheat (including production, existing stocks and imports) in the period – 613 million tonnes – exported only 2% of it, with about 80% being used for domestic consumption, and The rest was stored. Conversely, other major exporters may sell the bulk of their supply. For example, the US exported 31% of its 404 MT supply in the 2017-2021 period. Canada exported 60.5% of its 186 metric tons, while Australia exported 57% of its supply of 146 metric tons.
global market
Many countries in Africa, West Asia and Southeast Asia are heavily dependent on Russian and Ukrainian wheat. Egypt, the largest importer of wheat, gets 93% of its needs from its Eastern European neighbours. Indonesia, the second largest importer, has a 30% dependence on these two countries. African countries such as Sudan (80% dependency), Tanzania (64%), Libya (53%), Tunisia (52%), and the West including Lebanon (77% dependency), Yemen (50%) and the United Arab Emirates (42) Asian countries (%) are also highly dependent on supplies from the two neighbors now at war.
Dr. Madhayan Angamuthu, Chairman, APEDA (Agriculture and Processed Food Products Export Development Authority) said, India is now focusing on exporting wheat to many of these countries. “Our focus markets are Egypt, Turkey, Nigeria, Algeria, Middle East, Indonesia, Vietnam, Sri Lanka, Bangladesh, Thailand, Philippines, Morocco and Tanzania,” he said.
“To promote wheat exports as well as focus on challenges and constraints faced in production and exports, APEDA has formed a working group,” said Dr Angamuthu.
With India’s wheat harvesting season (March to May) facing supply crunch, again expected a bumper crop this year, and a huge amount of buffer stock, food security campaigners agree that India Ready to step in and fill the void. However, he cautioned that India should not focus on domestic needs while exporting surplus wheat.
domestic needs
Deepa Sinha, an assistant professor in the School of Liberal Studies at Delhi’s Ambedkar University, said that ensuring price stability in India and ensuring availability of food grains for internal consumption should be the top priority of the Indian government.
Dr. Sinha, associated with the Food Rights Campaign, said, “Meeting the food security needs of all Indians should be the first priority of the government.” “This will require the PDS to continue.” [public distribution system]Prime Minister Garib Kalyan Anna Yojana ,PMGKAY) and expanding the net to bring in more people who are currently excluded. This is also necessary given that the market prices are expected to rise further. On the other hand, with higher prices available, the government should consider procuring wheat required for these food security requirements from Indian farmers at a price better than the existing MSP.”
“The government should plan this move in such a way that it does not affect local consumption. A bumper crop of wheat is expected, so the government can procure enough for its distribution and buffer needs. Also, as of now, There is no export restriction, so farmers can also get the benefit of higher prices by selling surplus to private traders for export,” Dr Sinha said.
The controversial issue of export of wheat from FCI stocks adds another dimension to the issue. A trade expert, who spoke on condition of anonymity, said if India decides to export wheat from its stock, some developed countries may object to the WTO. Already, in March, India was accused of exporting rice from its stock. India had replied that its rice exports were not out of stock set aside under public stock holding programmes.
increase in agricultural revenue
Biraj Patnaik, former Principal Adviser to the Commissioners of the Indian Supreme Court on the Right to Food, said the peace clause adopted in the 2014 World Trade Organization’s Bali ministerial does not bar India from exporting food grains.
“With buffer stocks, India should increase its wheat exports to stabilize global prices,” Mr Patnaik said. “This is also important because countries that were dependent on Russia and Ukraine for their wheat are looking for alternative sources. The government should utilize this opportunity by procuring all the wheat grown at MSP which will serve the interest of Indian farmers.”
However, exports should not be made at the cost of domestic consumption, especially with the recent expansion of the PMGKAY programme, he cautioned.