8-ICRIER Export Restrictions And Stocking Limits Ineffective Against

1. ICRIER: Export Restrictions And Stocking Limits Ineffective Against Food ICRIER: Export Restrictions And Stocking Limits Ineffective Against Food Inflation Inflation The agri sector, Indian farmers, and food inflation have all been impacted by the extreme weather conditions and other geopolitical developments. An unprecedented heat wave in 2022 had an impact on the yield of many important crops. In addition, it was the year that Russia invaded Ukraine in February. In 2023, circumstances deteriorated. Factors Impacting India’s Food Inflation Factors Impacting India’s Food Inflation An unusual temperature spike at the start of the year had a negative impact on the onion crops. Concerned farmers hurried to the market with their crops as the temperature increase threatened to shorten the shelf life of onions. A price crash was caused by the abundant crop arrival in mandis. Multiple episodes of unseasonal rain and hailstorms began in March and continued for at least three months. This once again had an impact on important crops, like tomatoes. Tomato prices skyrocketed in recent weeks, highlighting the impact. Then the monsoon was delayed, which had an impact on the sowing cycle. Uneven rainfall that followed continued to harm Kharif crop production nd there was more bad news in August. According to the IMD, this August was the driest in 122 years. Although September is seeing some rainfall, experts say it will not help much since the maturing window for important crops like soybean, cotton, maize, groundnuts, coriander, coffee, and pulses has passed. At the same time, excessive rainfall harms paddy crops and is likely to have an effect on yield and overall production.

2. Policy Decisions By The Go Policy Decisions By The Government The Indian government started taking action in response to these circumstances. The measures included a complete ban on wheat and wheat flour exports in May 2022, a broken rice export ban in Sep 2022, a ban on the exports of non-basmati rice, imposition of a stocking limit onwheat traders and millers in June 2023 and a recent 40% export duty on onions. vernment Farmers were distressed by these restrictions. They argued that the few chances they had to turn a profit were being hampered by these bans. The farmers argue that the timing of these bans, as they already contend with the wrath of climatic factors, comes as a double blow. According to a paper published by the Indian Council for Research on International Economic Relations (ICRIER), “The adoption of such policy measures indicates a bias in favor of urban consumers in India's food price policy, which is in turn a disguised transfer of resources from farmers to consumers.” According to the paper, ‘In the financial year FY22, India exported 7.5 MMT of wheat, and with the Russia-Ukraine war beginning in March 2022, the global prices were rising. India had the potential to increase exports, which would have benefited farmers as domestic prices rose in line with the global trend.’ The Bottom Line The Bottom Line However, the market prices were dragged down to the level of the MSP announced by prohibiting the export of wheat and wheat products, unloading 3.4 MMT of wheat through open market operations at prices below economic cost, and then imposing stocking limits on traders and millers. "The goal of the Minimum Support Price (MSP) policy is to act as a floor price for farmers," it states. If market prices are higher, the GOI is required to compete in the market and purchase goods for its needs to support the PDS at market prices. The paper suggests using trade policy sparingly to combat inflation while keeping farmers' interests in mind, without eroding their income. In the long run, the paper suggests that the government increase R & D expenditures, keep climate change in mind, invest in novel farming techniques, drought-resistant seed varieties, and expand irrigation coverage. If you are a wheat importer wishing to buy wheat in bulk or a wheat exporter willing to export bulk wheat, then Tradologie.com is the right platform for you. Tradologie.com is a Software as a Service platform that facilitates bulk agro-trade across the globe. Through tradologie.com’s interface, buyers can avail the best qualities of agro-commodities at negotiable rates. The transaction oriented platform has 600,000+ verified buyers and about 70,000+ registered sellers of agro-commodities from over 150 countries. To register as a buyer, click here. To register as a seller, click here. To stay updated with the latest happenings in the agro-trade industry, follow Tradologie.com across all social media channels.