India rarely gets the timing of foodgrain exports right. More often than not, it enters the international market when the best opportunity is lost and the grains need to be subsidised to get buyers. This seems to be happening again with the government dragging its feet on figuring out how to handle burgeoning wheat stocks. The Empowered Group of Ministers on food, which has to take the final call on the agriculture ministry’s proposal for wheat exports put before it months ago, has failed to take a decision so far. Union Agriculture Minister Sharad Pawar has repeatedly argued, albeit in vain, that exports are the only way to make room for fresh wheat currently being procured from this year’s bumper wheat harvest of over 84.3 million tonnes. Exports are also necessary to ensure wheat growers better returns so that they can deal with rising production costs. Moreover, domestic demand for cereals is already more or less satiated since the government has, of late, been liberal in allocating additional grains for the public distribution system (PDS). However, Union Food Minister K V Thomas seems reluctant to acknowledge this logic. Surely, he cannot be unaware of the problem of a mounting stock of grains and the danger of large-scale rotting of stocks once the monsoon arrives. Perhaps Mr Thomas wants to hold on to these stocks in case the Union government is forced to find supplies to implement the proposed national food security law.
Indeed, this is a good time to push stocks through supply chains given the massive grain reserves on hand. These are slated to swell by the end of the ongoing wheat procurement season in June to a whopping 60 million tonnes, which is equivalent to nearly 15-month requirement of the PDS. Also reassuring is the prediction of a normal monsoon. In fact, the government is facing an uphill task safeguarding the accumulated stock. A sizeable part of its grain collection is lying in the open, exposed to weather and rotting. Punjab and Haryana, where 90 per cent of wheat stocks are stored without shelter, have indicated their inability to accommodate more grains. An opportune time to export wheat and rice was last February when international prices were at the current season’s peak. The grain price index of the Food and Agriculture Organisation dropped by 2.9 per cent by March and has since been undergoing only range-bound fluctuations. Besides, wheat plantings in many countries are reported to have expanded this year in response to last year’s strong prices and crop yields are expected to be better owing to favourable weather. This should push up world grain production as well as export supplies. A delay in entering the export market will, therefore, expose India to stiff competition, forcing it to settle for lower prices than it could have realised earlier. At a time when food importers are scouting for supplies, this is a good time for the government to permit grain exports.