India needs to protect its food security, give a damn to ban threats
US diverts 90 million tonnes of food grains for bio-fuel production
It is quite intriguing. When it comes to supplying wheat and rice to Karnataka, Tamil Nadu and other States under the Open Market Sale Scheme (OMSS), we are told that there are not enough stocks available. But when it comes to banning non-basmati rice exports, the same people forget about the availability of rice for the domestic market and instead argue that such a move will dent India’s credibility in international trade.
The dichotomy doesn’t end here. When it comes to the agrarian crisis, the discussions invariably boils down to mining of groundwater by Punjab farmers cultivating paddy. For several years, the talk has been to move farmers away from paddy, and going in for crop diversification. But when it comes to rice exports, rarely have economists and policy makers ever talked about reducing exports. Reducing crop area under paddy and increasing rice exports work at cross purpose, but that is how the development refrain goes.
First, let’s look at the global rice trade. India is the largest exporter of rice in the world. It exports about 12 per cent of India’s rice output, but globally it has a share of 40 per cent of the rice trade. India’s rice exports were at a record high of 22.3 million tonnes in 2022-23. Quite obviously, stopping rice supplies will hit countries that strongly dependent on Indian exports, and this is likely to trigger price volatility. But that is exactly what was anticipated when India had banned wheat exports last year. However, after an initial price rise, the global markets had cooled down.
Nevertheless, knowing the global context of the rice trade it becomes essential to find answers to the two questions I raised above. Let me make it clear.
When it comes to domestic supplies, as of July 1, India had a grain surplus of 71 million tonnes, including both wheat and rice. In other words, there are ample food stocks available at present to meet any eventuality. But in the ongoing Kharif crop season, monsoons have been quite erratic and thereby impacting paddy crop. With paddy sowing delayed due to a delayed onset on monsoon rains, followed by incessant rains that caused severe floods in the paddy belt of Punjab and Haryana, the standing crop prospects have been hit. Some areas have been washed over and farmers need to replant paddy. In the southern peninsular regions, shortfall in rains has been causing concern. Moreover, anticipating an El Nino phenomenon to become pronounced in some weeks, India is doubly cautious about future supplies. Already several studies have shown how strengthening of the El Nino will impact South and Southeast Asia’s rice production.
Now let us look at the environmental consequences arising from increased paddy cultivation. In Punjab, if we take an average consumption of 4,000 litres of water to produce one kg of rice, to produce a crop of 12 to 13 million tonnes of rice, roughly 48 to 52,000 billion litres of water is consumed. While everyone blames Punjab farmers for literally mining groundwater, and considering that more than 95 per cent of the rice grown is sent out, Punjab virtually exports water when it exports rice. Extrapolating the same water consumption figures, when India exports 22 million tonnes of rice, a total of 88,000 billion litres is virtually exported.
Encouraging rice exports therefore means we have been virtually exporting huge quantities of water. But the virtual export of water has never been an issue in relation to exports. There is a strong lobby for ensuring unrestricted exports.
That brings me to a related question. Who does the rice exports benefit? Is it the farmers who stand to gain?
An interesting and exhaustive study entitled: ‘India’s rice exports – What is in it for farmers?’ by Manish Kumar et al (and published in Sage Journals, July 30, 2019) shows that the benefits have not flowed to farmers. The study says that even for exporters, given the low margins, the squeeze is possible only in the backward linkages in general, and from farmers in particular.
This is the price India pays to be the annadata for the world. Therefore, it is important that the nation’s food policy should define as to how much virtual export of water can India sustain, and also explain the gains if any for the farmers as well as the environment from unbridled food exports especially that of water guzzling crops. Policy parameters must also ensure that the domestic requirement of food is never allowed to be compromised.
Similarly, let us look at the international pressure to lift the ban on rice exports. As expected, the International Monetary Fund (IMF) has issued a veiled threat to India. Wanting India to remove restrictions on export of non-basmati rice, Pierre-Olivier Gourinchas, the Chief Economist of IMF, said at a press conference: “These types of restrictions are likely to exacerbate volatility on food prices in the rest of the world. They can also lead to retaliatory measures.”
I am aware that he is talking of retaliatory measures from the countries which are increasingly dependent on rice exports from India. But this kind of a masked threat from IMF does not auger well for an institution that is struggling to recast its own image towards any meaningful future. In fact, last year too, IMF had wanted India to reconsider its decision to ban wheat exports saying continuing with the exports could play a significant role in alleviating the wheat supply crisis.
Instead of blaming India for the volatility on global food markets following its decision to restrict rice exports, I thought he should have pointed fingers at the United States, which alone is responsible for diverting 90 million tonnes of food grains for bio-fuel production. This is twice the quantity of food supplies that usually come from Ukraine and Russia into the international markets (New Scientist, Mar 14, 2022). In addition, European Union guzzles an additional 12 million tonnes, including wheat and corn, for ethanol production.
It only shows there is enough food available with the developed countries. The failure to question them and to ask them to redirect food for humans is only tightening the global food supplies.
I only hope India does not succumb to any hidden warning to lift the ban on rice exports. What India needs is to protect its own food security. No one is going to come and feed our food insecure population. We alone will have to do it.
(The author is a noted food policy analyst and an expert on issues related to the agriculture sector. He writes on food, agriculture and hunger)