Wheat Export Ban: U-Turn on Wheat Reveals Data System Gap

From pledges to meet global food shortages to dramatic bans on wheat exports, India’s policy has flipped over the past few weeks due to delays in estimating crop production losses in the wake of intense heatwaves since March. . Even before the hot summer wheat harvest, many, in fact, questioned the farm ministry’s bumper output estimate of 111.3 million tons per year of harvest until June 2022.

The risk of a small crop intensified after the heat wave intensified in late March. But the seemingly casual approach of the relevant agencies and the Ministry of Agriculture to the initial precautionary treatment has made matters worse. And now at risk is the credibility of the government’s farm data collection system, which has been crying out for reform for years.

Inflationary production estimates were confirmed in February, which, despite declining market arrivals, have not yet been officially revised, with the government falsely believing that it can supply the world until its stockpile is broken. Although the Ministry of Agriculture follows a specific calendar for publishing output estimates, it has not informed other branches of government in a timely manner about the possibility of substantial output loss. It needs to be more responsive, especially when the weather is mischievous, so it is rarely emphasized.

On April 13, Prime Minister Narendra Modi said that during his talks with US President Joe Biden, he had offered to supply India’s food stocks to the world from official granaries if allowed by WTO rules.

On April 15, encouraged by the agreement with Egypt and interest in Indian wheat from others, Commerce and Industry and Food Minister Piyush Goyal expressed confidence that grain exports would exceed even the initial target of 10 million tonnes in the current financial year. And could even touch 15 million tons.

Even after the media started reporting a decline in wheat yields in major producing states like Punjab due to heatwave from the third week of April, the Ministry of Farms has not made any such indication publicly.

Subsequently, on April 25, the FE also reported on the supply crisis and how private players were active in buying grain from farmers in Punjab and Haryana, in an unusual situation, as market prices rose above the minimum support price. The government collects grain.

On May 4, food ministry officials insisted there were no lawsuits to stop wheat exports. At the same time, they said, based on inputs provided by the Ministry of Agriculture, wheat production estimates for the grain year up to June would be 105 metric tons, lower than the February estimate of 111.3 metric tons.

The government’s wheat procurement so far has been only 18 metric tons, which is less than the initial target of 44 metric tons and the revised target of 19.5 metric tons. Despite the government’s decision to extend purchase dates in several states, analysts believe that final purchases may even fall short of the scale-down target and stabilize around 18.5 metric tons, the lowest in a decade.

On May 6, Modi presided over an important meeting of officials to review various aspects of wheat supply, stocks and exports. The Prime Minister asked the officials to ensure that the quality parameters of grains and other farm products exported from the country are not violated.

On May 12, the Ministry of Commerce announced plans to send trade delegations to Morocco, Tunisia, Indonesia, the Philippines, Thailand, Vietnam, Turkey, Algeria and Lebanon to explore the possibility of increasing wheat exports from India. The ministry was, in fact, planning to hold a series of meetings on major wheat exports to the growing states.

On the same day, Home Minister Amit Shah presided over a meeting of the Group of Ministers on Essential Commodities, which saw the participation of the Ministries of Agriculture, Food, Consumer Affairs and Commerce. Sources told FE that after taking stock of internal availability, it was decided to impose a ban on exports.

Ajay Bir Jakhar, chairman of Bharat Krishak Samaj, said, “The data on crop production in the country is not credible. In the absence of a strong data source on production, assessing the supply situation becomes so risky, “he said.

“Before imposing a sudden embargo on exports, exporters must also pay a certain cushion, because sudden policy changes cause unreasonable panic and cause irreversible losses, because the agreement was already firm and supplies were already on their way to the port. The Mumbai-based wheat exporter said.