Published On : 03-Apr-2023
Farming for grains is foundational to human civilization. After all, food is the most basic necessity after clean air and drinkable water. Unsurprisingly, every new economy develops itself through agriculture. That is why it is called a primary sector. Staple grains are crucial to India’s developing economy in more ways than one. Why then, has the government banned their exports? Read till the end to find out when this ban might be lifted.
A significant portion of India’s population is engaged in agriculture. The country is the world’s second-biggest producer of both rice and wheat, the biggest food staples of all. The biggest one is China, for similar reasons. Two years ago, the Indian government sought to increase wheat exports to 10 million tons. An ambitious goal considering exports for the year before was only 2 million tons.
This was not only to bolster the economy but also for political diplomacy. Unfortunately, the pandemic had led to massive food insecurity within the borders. The Russia-Ukraine war further exasperated global food insecurity. The prices of grains shot up and back at home, the GOI has to take drastic action.
In March 2022, the country suffered a severe heat wave that damaged many crops. During this time, around 15% of wheat production was lost. The poverty-stricken were still recovering from the pandemic and in need of support. Thus, GOI started a campaign to provide extra rations at subsidized rates, on top of the basic legal allowance.
By May 2022, the government was forced to ban all exports of wheat, as well as rice, to avoid a food crisis. The country's neighbors were in dire need of support, with Sri Lanka’s economic meltdown, and the Taliban in Afghanistan. Yet until the stocks of these basic foods were sufficient for the native population, exports had to be stopped.
Wheat exports will likely stay banned until mid-2024. After last year’s crisis, this year has been less than ideal. While overall wheat production has increased, weather conditions have been problematic. Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, and Rajasthan are the biggest wheat producers in India. These areas suffered another heatwave from the second half of Feb up until mid-March. Things got worse when these states suddenly experienced severe rainfall throughout March.
Many farmers irrigated their land fearing the heat wave, only to be met with heavy rains, strong winds, and even hailstorms. Approximately 10-15% of the wheat has already been damaged, while the rest will be harvested in early April. The GOI’s prudence is paying off as domestic reserves seem sufficient. While stocks are well beyond the buffer requirements, exports are still banned until things settle down.
GOI has also recently declared that they will send 20,000 million tons of wheat to Afghanistan for relief. The government had pledged 50,000 MT in 2022 as a diplomatic effort to encourage more inclusive policies in the troubled nation.
