Can Russia be India’s new best agri friend?

Can Russia be India’s new best agri friend?

With climate disruptions wreaking havoc on agricultural seasons and output, the Indian and Russian governments can consider an agri treaty to last until 2030 covering foodgrains and fertilisers. Russia can sell India its surpluses in wheat in good years and for bad years, wheat exports to India can be exempted through a prior consensus.

The recent decision of the Indian government to slash wheat import duties by 15-20 percent that could lead to import of over one millions metric tonnes of Russian wheat to battle food security challenges at home before the 2024 elections is both politically and agronomically a wise step.

But one swallow or deal doesn’t make a summer, nor does it shrug off the big question: What happens when the next food crisis emerges? And will we use this one-time deal, as a starting step towards a larger agricultural treaty between India and Russia?

Ever since Nehru, Indira Gandhi to now Narendra Modi, the then Soviet Union and now Russia have stood for aligned goals with India. Of course everything was not rosy, but nevertheless the friendship between New Delhi and Moscow has only grown stronger. With the new BRICS alignment now in place, India and Russia have a new window to expand from weapons to agriculture.

Climate Jitters

Apart from being India’s biggest weapons supplier, India and Russia ought to discuss a new agricultural partnership covering fertilisers and food grains till at least 2030.

But first, what were the reasons for the need to import? India usually is a wheat exporter, and in fact when the US-led sanctions blocked Russian wheat, the world was looking towards India to fill the supply gap. But as luck would have it, due to climatic anomalies, India’s wheat harvests have been suffering for a few years now. Punjab and Haryana and in the past years, Madhya Pradesh  reported severe wheat losses. This directly led to short supply and the government banned wheat exports. Post which the price of wheat flour started to rise.

Over time Indian consumers are paying over 25 percent more than previous years for wheat. Traders and exporters are also highly alarmed by the constantly changing export restrictions. Meanwhile the India strategic food reserves were at their lowest this August. And lately the kharif and rabi crop have seen below average production too. Reports also confirm that the Rabi 2023-24 sowing may be impacted.

An India-Russia Agri Deal

Keeping food security as the central focus, India and Russia have an opportunity that will bring both countries closer. Even before we address the food question, India needs to chalk out a farm inputs deal at least till 2023 covering agri chemicals and fertilisers like DAP (Di-Ammonium Phosphate), etc, because this is vital for national food security. Without DAP and other agri-fertilisers, industrial farm production would come to a stand still.

Despite the sanctions India has been trying to make bilateral deals for agri-chemicals and fertilisers. India needs a steady supply in a cost effective manner, which the Russian side is willing to offer. Before other BRICS nations or other emerging agri-economies approach Russia for its limited and highly valued fertilisers, India should ink a fertiliser treaty till at least 2030.

Now moving on the food treaty, India is experiencing an agricultural season shift which is predicted to stabilise by 2027, which means that climate disruptions will continue, threatening our agricultural production. India can’t risk adopting a knee-jerk response each time a food crisis is imminent. Hence for restocking our strategic reserves and stabilising the Russian and Indian wheat markets, India can consider a surplus supply deal with the Russian government.

A Win-Win Affair

Under the agri treaty Russia will only be obliged to sell its surpluses in wheat in good years and for bad years, wheat exports to India can be exempted through a prior consensus. The payment terms can be in national currencies and in this manner, Indian demand can help Russian ports clear its wheat stocks and also help the Russian economy. Because it will be a government to government deal, one may expect the prices to be fair for both sides.

The added advantage for India is of course that all Russian origin food is non genetically modified and safe. Plus there is no bullying by Russian corporations to open up Indian markets or complaints lodged at the WTO. The US and her corporations have strongly pressured India over GM crops and market liberalisation schemes, but with the Russians no food strings will be attached.

Overall, it’s time India forges a deeper relationship with Russian agriculture for meeting our national goals and also helping Russia. India needs to become the early bird and create a special Indo-Russian agri authority overseeing fertilisers, agri-input, food and agri finance, so governments and citizens can work to take Indo-Russian relationship to a newer agricultural height.

Content Source – Can Russia be India’s new best agri friend? (moneycontrol.com)

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