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The Editorial Analysis- Wheat Confusion

Wheat Export Ban Controversy- Relevance for UPSC Exam

  • GS Paper 3: Indian Economy- Issues relating to planning, mobilization of resources, growth, development and employment.

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Wheat Export Ban Controversy in news

  • Recently, India surprised the world with its decision to bar wheat export with immediate effect.
  • However, government went defensive on its wheat export order and modified it.
  • Initially, the Centre had amended the order by allowing export consignments registered in the Customs Department’s systems and handed over for examination on or prior to May 13.

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Impact of Wheat Export Ban Controversy

  • Addressing a UN “Global Food Security Call to Action” ministerial meeting Minister of State for External Affairs emphasised that the restrictions made allowance for countries that had food security needs.
  • More than farmers, it is traders who stand to benefit from the limited easing of restrictions of wheat export ban.
  • Criticism in International Community: India has faced criticism from the G-7’s Agriculture Ministers for its decision to ban wheat export.

India Relaxes Wheat Export Ban

संपादकीय विश्लेषण- व्हीट कन्फ्यूजन

Why Wheat Export Ban?

  • Supply-Demand Mismatch: indications of a mismatch in demand and supply were evident, leading to rising wheat prices and subsequent export ban by the government.
  • Key reasons for the demand supply mismatch are-
    • Rising levels of wholesale and retail inflation,
    • Impact of the Russia-Ukraine war and
    • A lower opening balance of wheat in the Central pool for the public distribution system
  • Low Production due to Unfavourable Weather: several parts of wheat-producing States in the north experienced unusually warm weather in March-April.
    • Due to above, the Government lowered marginally, early this month, the estimated wheat production, from 111.32 million tonnes to 105 million tonnes.
  • Rising International Wheat Prices: Food and Agriculture Organization (FAO) of the United Nations, said that even before the Russia-Ukraine war, wheat prices had reached an all-time high.
    • Wheat price rise in International market was mainly due to market conditions and the high prices of energy, fertilizers and other agricultural services.

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Wheat Export Ban- Mixed signals from Government

  • Mixed Thinking: before banning the wheat export, the Centre clarified that there was no move to curb wheat export. Centre considered it beneficial as-
    • It was the opportune moment for exporters to sell in the international market as wheat from Argentina and Australia would begin arriving next month.
  • Promoting Wheat export: Just before the export ban, Union government had taken many initiatives to boost the wheat export like-
    • An official announcement was made that trade delegations would be sent to countries such as Morocco, Tunisia, and Indonesia to explore possibilities for wheat export.
    • In addition to Egypt, Turkey had given its approval for the import of Indian wheat.
  • Increasing the Wheat Export Targets: An announcement had been made that the current year’s target for wheat export had been fixed at 10 million tonnes, three million tonnes higher than last year.

Wheat Export Ban Controversy- Way Forward

  • Government should not persist for too long with its current position of “restrictions” on the export of wheat, as the move seems to have hit the farmers.
  • Learning from the Past: Lessons must be gleaned from the experience 15 years ago when India took about two years to lift its ban on the export of non-basmati rice, by which time Thailand and Vietnam had moved in to take full advantage.

 

Conclusion

  • Apprehensions of a food shortage are misplaced, and the Government would do well to lift the “restrictions” sooner rather than later.

India Relaxes Wheat Export Ban

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