Killing the goose

Foodgrain exports have been in virtual limbo ever since the government asked the Food Corporation of India (FCI) to curtail deliveries to exporters on the plea of stock draw-down. This has put traders, especially those with export orders in hand, in a quandary.

There was hope that the situation might change when the government came out with its proposal to allow exporters to directly tap the domestic market for procuring their supplies. This proposal included reimbursing exporters for export-related costs as permissible under the norms of the World Trade Organisation (WTO).

However, even this has not materialised yet, though the Cabinet had given its nod to the scheme in January. Standing in the way is the inertia of the commerce ministry, which is taking its time deciding on how much is to be reimbursed as costs and the procedure to be followed for doing so. This delay has already prevented rice exporters from securing supplies from the last kharif harvest and threatens to do the same now to wheat exporters, as the wheat marketing season has already begun and is likely to be over in a couple of weeks.

Grain exporters (the biggest of them are three public sector organisations) merit kudos for carving out a place for the country in an international grain market that has traditionally been monopolised by a few international players. This has been achieved in fairly trying circumstances.

The exporters have not only had to deal with an agency like FCI for getting their stocks, at prices that are subject to revision every quarter, they also have had to go through the procedural wrangles associated with getting reimbursements from the government. Despite this, exports of wheat and rice have crossed 30 million tonne in the past three years, making India the second largest exporter of rice and among the top 10 exporters of wheat.

However, this is now history and grain exporters will have to make almost a fresh beginning in the global grain bazaar. Importers in other countries prefer reliable suppliers, and India's image has been sullied from that point of view by the stoppage of supplies. Now that the government's stocks have begun swelling again, thanks to the anticipated procurement of 20 million tonne each of wheat and rice, the government has little reason to not implement the new grain export scheme. But if a decision is not announced immediately, then the very purpose of doing so would be lost. Exporters would then have to wait till the next crop marketing season to initiate any action.

Not only this, the Centre also needs to impress upon states to repeal or amend (or at least suspend the enforcement of) their outmoded agricultural produce marketing laws that put needless curbs on the operation of private trade. If export markets are to be developed for Indian grain, the government must provide exporters with hassle-free access to supplies and simplified export procedures.