Despite Record Production of Wheat, Exports Ban to Continue

India’s wheat production is expected to reach record high this year during October 2010 to March 2011 season. India’s 2010 wheat output will be fifth in a row to exceed domestic demand. This year’s wheat production (Oct 09 to Mar 10) is already all time high harvest of 80.71 million tonnes. The production for the coming season is expected to exceed 82 million tonnes as per the farm ministry officials.

Excess wheat stocks covered under tarpaulin sheets Better soil wetness because of robust monsoon rains so far, would help India to produce wheat crop at record level. India is the second biggest wheat producer in the world after the US. India produced wheat that exceeded local demand for fourth consecutive year until this year. India’s wheat harvest is limited to once a year, starting from October and ending between March and April.

India imposed ban on wheat exports in 2007 for three years in order to control wheat prices then. Even though the output is in excess of domestic demand, the government has no plans to lift the ban on exports in private account, the farm officials told. The government said exports on government account would be as usual.

Bulging Stocks, Widening Hunger

As the stocks are in excess of the storage capacity of the available warehouses, excess stocks are kept under tarpaulin covers in the open air. Due to this, the wheat stocks are getting rotten and decayed. This situation prompted the Supreme Court asking the government free distribution of grains to the poverty and hunger stricken poor masses.

Ironically, the government rejected the Supreme Court suggestion stating that it was not good practice. The supreme court latter said it was only asking the opinion of the Govt, but not permission and ordered the Govt to distribute free wheat to the poor. The Prime Minister said in a rare interview to reporters, that the Supreme Court could not take the executive duties into its hands and there should be a boundary line.

It is not about Powers but People’s Hunger

What the Prime Minister missed was the Supreme Court is not talking about the powers of the state’s wings but the poverty and hunger of the poor masses, for whom welfare and well-being the powers of the state and its wings were conferred to.

The ruling parties and their men are always averse to free distribution except for gaining votes. Higher prices can prevail despite inability of the less paid labor masses to buy what they needed, expecting monsoon rains to bring down the prices. Tax cuts, Export incentives and stimulus measures can continue for any periods only to record higher growth rates but at the cost of decreasing wages of working masses. However, the govt. cannot and should not resort to free distribution to poor people even though the grains are getting rotten.

Inflation Worries

Analysts say the government will be wary of allowing exports despite brimming warehouses, as food prices are high. On Sept. 1, wheat stocks were at 29.9 million tonnes, against a target of 17.1 million tonnes. Food inflation has been accelerating in recent weeks with government data on Thursday showing the country’s food price index rose 15.10 percent year-on-year in the week ended Sept. 4. The government, battling high food prices, has faced street protests and criticism from some of its own political allies.

The Government said it was expecting rice shortfall of at least 2 million tonnes. However, the shortfall is minute comparing the overall output. The states like Bihar, Jharkhand and West Bengal have experienced shortfall of rain this year also.

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