Occurrence of distinct humid summers and winter\nseasons makes India a suitable producer for both tropical food-grain crop paddy\nand temperate food-grain crop wheat. Plains of North, North western and central\nIndia are major wheat producing regions of India. Since the onset of Green\nRevolution and introduction of High Yield Hybrid Dwarf varieties, India has not\nonly become self-sufficient for domestic consumption but also emerged as a major\nexporter of wheat.<\/p>\n\n\n\n
In fact India has consistently maintained position\namong first two producers in the world but due to high domestic demand India\ndoes not figure in the top 10 exporters. It is the countries with temperate\nclimate and low population, mainly in Northern hemisphere (except Australia and\nArgentina) which dominate world wheat exports. More than domestic consumption,\nit is the rigidity in Public Stockholding for food security purpose which\nundermines wheat export potential of India. Although fears behind such huge\nstock piling are not completely unfounded, India imported wheat under PL480\nscheme from USA and even after inception of Green Revolution as late as mid\n1970s has requested USA for additional supplies. <\/p>\n\n\n\n
But Wheat Stock in Central Pool peaks as high as 327\nLakh MT in harvesting season of May-June and declines over the coming months\nbut never goes below 164 Lakh MT(as of 2018). In this decade, despite record\nproduction years, domestic production remained close to domestic demand of\naround 95-97 Million Tonnes, thus has to be compensated at times by imports.\nDomestic demand has also risen in recent years and despite record production\nfor consecutive years and India has turned into a net importer of wheat in\n2016-17 and continued importing in 2017-18, may import this year as well,\nmostly quality wheat for south India millers, who may find imports more\neconomical than buying from the domestic market as prices may go up after the\nmarketing season is over in August this year. But here we should consider two\nmajor factors. <\/p>\n\n\n\n
First India\u2019s food grain stock capacity both in\nqualitative and quantitative terms is much lower than its domestic stock\naccumulated through Public Procurement through Minimum Support Price mechanism.\nSo Indian Public Stock which has faced chronic issue of overstocking due to\nslow off take and production surge also faces challenges of wastage due to poor\nstorage facilities. For example in 2012, godowns were overflowing with a record\n82 million tonnes of rice and wheat, against the storing capacity of only 64\nmillion tonnes and Government made desperate attempts to offload at least 6.6\nmillion tonnes lying open in unscientific way before onset of monsoon.\nGovernment invited representatives of 17 countries to deal with it.<\/p>\n\n\n\n
Second, occasional import by India are of high quality\nwheat. So both import and export restriction imposed by Government (generally\nto deal with production slump and surge) can\u2019t be said to have desired policy\nimpact, rather it hampers incomes of Indian farmers because they are unable to\nexport moderate quality wheat to neighbouring tropical and drier countries\nwhere we have advantage in terms of CIF. But Government continues to\noccasionally resort to such measures to deal with issues on hand, which even\nonce lifted continue to hamper wheat trade from India. For example government\nhad lifted ban on wheat exports in September 2011 but the shipments had not\nbeen picked up till mid-2012. Similarly in November 2017, the Centre hiked the\nimport duty of wheat to 20 per cent from existing 10 per cent, in order to\ndiscourage imports as the prospects of a good output looked up.<\/p>\n\n\n\n
Thus we reach the conclusion(which might be contrary to popular opinion and conventional wisdom) that to boost India\u2019s wheat export to the world in general and\u00a0 United Kingdom and Bangladesh in particular we need reforms at two levels. First Food Security Guarantee (which is now a legal right) and Farm Income Support should increasingly rely more on direct benefit transfer and less on price control. Second, regulation of international trade in wheat should be governed by market forces rather than by frequent tariff and import control interventions. Instead government should focus on making Indian wheat produce cost and quality competitive.<\/p>\n\n\n\n
(This article is part of a study conducted at Indian Institute of Foreign Trade. Full Study will be published in upcoming issues.)<\/p>\n","protected":false},"excerpt":{"rendered":"
Regulation of international trade in wheat should be governed by market forces rather than by frequent tariff and import control interventions. Instead, the government should focus on making Indian wheat produce cost and quality competitive.<\/p>\n","protected":false},"author":2,"featured_media":63860,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","footnotes":""},"categories":[4,3,1],"tags":[198,204],"class_list":["post-63859","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-agriculture","category-indian-economy","category-uncategorized","tag-indian-agriculture","tag-wheat-export"],"yoast_head":"\n