Export Bans Won't Fix India's Deep, Dark Agriculture Woes


(MENAFN- Asia Times) The unpredictable nature of India's agricultural sector highlights how quickly a country producing exportable surpluses can turn into one grappling with potential supply shortages in the domestic market.

These supply shortages raise the prospect of food insecurity and food price inflation. In response, the government immediately clamped down on exports, beginning with staples like wheat and rice.

In April 2023, India celebrated a record-breaking agricultural export performance, which had surpassed US$42 billion in the preceding year. This level of exports exceeded the pre-pandemic record achieved in 2018–2019 by almost 48%.

Rice exports had increased by over 15% and pulses by over 84%, while sugar exports were more than 25% above the previous year's level. Such positive signs were seen as a major step towards the implementation of the 2018 National Agriculture Export Policy.

The bullish expectations on agricultural exports have all but disappeared in the first six months of the 2023–24 financial year. Except for basmati rice, all other major agricultural commodities, including non-basmati rice, pulses and sugar, registered negative export growth.

Interestingly, this trend had set in even before the government banned rice exports in July 2023.

In August 2023, the government further
restricted rice exports
by imposing a 20% export tax on parboiled rice. With overall supplies of major food grains tightening, especially after a decline in the country's wheat production during the 2022–2023 crop season, the government went into
overdrive to control cereal prices , which registered a
year-on-year price increase of over 8 %.

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