14 May How good wheat harvest in India can be a solution to world’s food crisis
India can exert itself through food diplomacy. A good wheat harvest in a time of scarcity can help New Delhi bolster its foreign policy goals.
Despite erratic weather plaguing North Indian wheat belts from Madhya Pradesh to Punjab earlier this year, the news from Punjab is good. Punjab has reported high wheat yields, which could curb wheat flour inflation, refill our strategic food reserves, and maybe get extra votes for the incumbent governments.
Let’s take a stock of the wheat from Punjab first. The agricultural department has stated that Punjab produced about 181 lakh metric tonnes, out of which 132 metric tonnes will be procured by the central agencies. Farmers across the state, after two years of wheat losses, were expecting a bumper harvest. The weather, mainly high heat, threatened the wheat harvests, but farmers, having learned their lessons from previous years, were quick to protect their crops.
Apart from Punjab, Haryana and UP too had a decent wheat harvest, backed by Madhya Pradesh. This presents a unique opportunity for the government. First, by increasing procurement, the government can get its hands on early wheat harvests. They ought to procure the maximum they can this year. Not only from Punjab but also from UP and Madhya Pradesh too. This way, we can fill our strategic food reserves with wheat stocks.
Lately, our strategic food reserves have been plummeting, and one good year with aggressive government procurement can end our troubles. Last year too, the government failed to reach the procurement target for wheat. The first important reason for maximum procurement is the filling up of food reserves, because our government has the responsibility of feeding 800 million Indians each year. For a few years now, the government has missed procurement targets due to erratic weather and bad harvests.
The lovers of private enterprise will no doubt disagree and suggest excessive wheat supply in the open market will drive wheat prices low. But the low prices will only benefit traders and the big agri-processors, not farmers or consumers. Hence, this being an election year, the government can provide MSP for a larger number of farmers, and procuring through FCI, NAFED, etc. can ensure the consumer price doesn’t peak either.
Last year too, the government released wheat stocks to stabilise the market as wheat flour inflation was peaking at about 25 per cent higher when compared with the five year average. Hence, policymakers should plan procurement better this year so we can say good bye to wheat troubles.
If we look at global wheat figures from Russia to Australia, all have been impacted by the weather. Russian wheat has been reportedly quite parched in southern Russia and only recently received rainfall after unusually high temperatures and dryness. This could impact the wheat coming out of Russia again. Plus, the trade sanctions and further escalation of the Ukraine-Russia conflict would create greater domestic demand. Russia has been trying to expand wheat production, but nevertheless, international sanctions are getting in the way of Russian wheat reaching the open market.
If we look at Australia, which also exports a good amount of wheat, it has been battling the El Niño effect, and the harvests are supposed to dampen. India can once again come to the forefront of the global wheat trade by first stocking up on wheat at home through government procurement. The second preference is with the private sector. Once the domestic open market needs are met, the government, in a planned way, can allow for wheat exports to fill the gap in the global supply chain.
By adopting a methodical wheat procurement plan, traders will also benefit, as they will have clear quotas of how much wheat they can export. Over the past couple of years, the government has haphazardly banned wheat exports, which has led to losses not just to the farmers but also to a majority of traders and wheat exporters.
It is about time the government of India, like the Canadian Wheat Board or the US government’s Department of Agriculture, has an active international trade body that helps facilitate Indian wheat reaching other countries in Africa and Asia. This way, India can exert itself through food diplomacy. A good wheat harvest in a time of scarcity can help India bolster its foreign policy goals, as most countries are in short supply of good wheat. Indian farmers can directly benefit by getting additional income if all this is done using a government agency and not the private sector.
Source Content – How good wheat harvest in India can be a solution to world’s food crisis (firstpost.com)
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