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Wheat exporters denied free hand

G. Chandrashekhar

MUMBAI, Sept. 6

AT a time when the Union Government has been forced to phase out quantitative restrictions (QRs) on imports, the Centre seems keen on continuing with uncalled for restrictions on exports of agricultural commodities. The latest to join the list of commodi ties permitted for export under a quantitative ceiling is wheat.

Months after it became apparent that the country would have to carry the burden of excessively large wheat stocks at an exorbitant cost, the Government has thought it fit to permit the export of up to two million tonnes of wheat. But, exporters have not been given a free hand.

The Government has designated the Agricultural and Processed Food Products Export Development Authority (APEDA), an agency under the administrative control of the Ministry of Commerce, to monitor wheat exports. APEDA has been authorised to issue what is popularly called RCAC (registration-cum-allocation certificate) to individual exporters, subject to the overall quantitative ceiling.

The administrative procedure for obtaining RCAC in case of commodities allowed for export under a ceiling is cumbersome. In case of wheat, in particular, what purpose the procedure will serve is not known. In no way will it help promote exports. What pro vokes the policy makers to impose such totally unjustified procedural formalities is unclear.

The irony is, it is not as if the country would start shipping out unlimited quantities of wheat if exports are permitted under open general licence. Far from it, currently Indian wheat is completely outpriced in the international grains market. While wo rld wheat prices are in the range of $130-140 a tonne, the cost of Indian wheat would be not less than $175 a tonne, over 25 per cent more expensive than other origins.

Mercifully, this year, export of wheat products (maida, suji, atta) has been allowed completely free, without any registration formality. During fiscal 1999-2000, the Government had permitted one million tonnes of wheat exports, but not a single export d eal was clinched.

Public stocks of wheat have mounted to about 27 m.t., 100 per cent more than the minimum stock norm stipulated for this time of the year. The authorities have consciously encouraged the unseemly glut to develop and are now engaged in a fire fighting oper ation to liquidate excessive stocks.

For the past six months, the Government has been complacent in managing food stocks efficiently. Vigorous efforts ought to have been made to pursue counter-trade or barter options. There is no evidence of a serious marketing effort, except perhaps some p erfunctory correspondence.

This also brings up another question - does the Government have sufficient and uptodate market intelligence on the international commodity markets? Seems not, going by the often knee-jerk reaction to emerging situations.

The Minister for Food and Consumer Affairs is reported to have said the existing policy on foodgrains management is in for an overhaul. It is heartening there is some realisation about the gravity of the omissions and commissions so far. It, however, rem ains to be seen how Mr. Shanta Kumar is going to address the issue.