Non-Basmati rice exports: A threat to national food security

New Delhi, June 18, 2009: Centre for Environment and Food Security (CEFS), a national NGO, has initiated an aggressive campaign to ensure food for all. This comes in the wake of government's contemplation to lift the ban on export of rice and at the same time promising Food for all under the proposed food security act.

The NGO vehemently flayed the union government's plan to bring in a new export policy for rice in a bid to allow export of non-Basmati rice. The CEFS says that easing exports of rice would mean that over 700 million poor Indians would be deprived of their right to adequate food.

India's current rice export policy restricts export permit to countries like Bangladesh, Nepal and African countries through diplomatic channels. Parshuram Ray, Director, and CEFS, said: "The government should stick to the existing policy, which on one hand allows reasonable exports of rice to friendly countries, on the other it has enhanced the national food security by maintaining comfortable and adequate domestic stocks and keeping a check on the price rise, making it more affordable for the vast majority of poor consumers. The current policy brings in a balance in means of domestic requirement and also ensures that the exports thru diplomatic channels do not get disturbed".

Free export of non-Basmati rice will be a recipe for national food insecurity for three main reasons. First, as there would be no quantitative control over the exports, large quantities of rice might be exported creating a domestic shortage of the staple cereal. Second, lifting the existing ban on free export will be bullish for the domestic market and lead to significant rise in the price of rice, making it less affordable for poor people. Third, free export will create a free playing ground for black marketers, thereby further shooting up the domestic prices of rice and wrecking havoc with the national food security.

According to Mr Ray, "The UPA government's proposed National Food Security Act, which ensures 25 kg of rice or wheat to each BPL family at Rs 3 per kg, would lead to significant rise in demands for rice and wheat. To meet the needs of the Food Security Act, the Government will have to keep adequate quantities of rice and wheat reserves in its warehouses. The Planning Commission is also working on the idea of paying part of the NREGS wages in kind (rice and wheat). If this idea is accepted by the Government, additional quantities of rice and wheat would be required. Therefore, India can not and must not allow free export of rice and wheat."

Rice is the staple diet of people staying in the coastal areas of Indian sub continent. This is bigger Asian crop than wheat. Due to extreme poverty in these areas people are dependent on PDS for their regular supplies of food grains. Government needs 22 million MT rice for PDS alone. If the government allows the export of regular non-basmati rice the impact would be extremely adverse on the poor people, said Mr Ray.

Keeping in view the tripling of rice price in international market during the period between November 2007 and May 2008, and steep decline in the global reserve of rice, OECD countries, especially USA, have been constantly lobbying with the Indian government to lift the export ban. According to reports, global reserve of rice has come down from 147 million MT in 2000-01 to 85 million MT this year.

Food policy analysts suggest that lifting ban on exports of non-basmati rice might bring down rice prices in the international markets, but this move at the same time could create shortfall of rice supply in the domestic market. If this happens, government would face problems as the domestic demand would come under pressure. They also see a strong possibility of black marketing of rice in the domestic market if the export markets are opened.

Source : Equity Bulls

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