‘Why Punish the Farmers Who Are Already Crushed Between Climate Change, Export Curbs and PDS?’

Climate change has spared none. But its maximum brunt is being borne by the farming community, which is not only facing a decline in crop productivity, but is also suffering the consequences of export curbs and duties levied to ensure food security in the country.

India has the world’s largest public distribution system (PDS) through which subsidised foodgrains are provided to over 800 million people.

The Targeted Public Distribution System (TPDS) operates under the National Food Security Act, 2013, which is supposed to provide subsidised foodgrains to 75 per cent of the rural population and up to 50 per cent of the urban population.

On November 4, at an election rally in Chhattisgarh, Prime Minister Narendra Modi announced that the central government’s scheme to provide ‘free’ rationed foodgrains would be extended for another five years.

But extreme weather events such as floods and droughts, have become a serious threat to the country’s food security. The central government has been announcing export bans, duties and unrestricted import policy to stabilise domestic food prices and meet its domestic requirements, and this has eventually hurt the farmers.

A 2022 report by Organisation for Economic Co-operation and Development (OECD) has documented that last year, Indian farmers were implicitly taxed 169 billion US dollars (Rs 1.352 billion) in the garb of export bans, duties or permits on commodities like wheat and rice — which were aimed at stabilising prices for consumers.

For instance, on May 13 last year, the Ministry of Commerce and Industry indefinitely prohibited exports of all types of wheat (pending export shipments were exempted) because early heatwaves caused a decline in wheat production in the country.

Two months later, on July 6, 2022, India introduced export licensing requirements on wheat flour effective from 12 July 2022. This was to stabilise fluctuations in domestic prices and control the quality of exports. Wheat flour had been excluded from the wheat export ban implemented in May.

Again, within two months, on September 9, 2022 India imposed a 20 per cent export duty on non-basmati rice (except for parboiled rice) to boost domestic supplies when there was a fall in area planted with paddy in the kharif (monsoon) season. A couple of weeks later, exports of broken rice were banned to ensure adequate availability for the domestic poultry industry, other animal feedstock, as well as ethanol production.

This year, the situation seems as bleak. PM Modi’s promise of ‘free’ foodgrains for five more years comes just a week after the Union Agriculture Ministry reported in its first advance estimate for the kharif crops that the production of rice will decline this year due to erratic rainfall.

The production of rice this year is estimated to be 1,063.13 lakh metric tonnes (106.313 million tonnes)— 3.7 per cent lower than last year’s production of 1,105.12 lakh metric tonnes (110.512 million tonnes). The estimate is lower this year despite a rise in acreage by 200,000 hectares.

Traders and farmer leaders have started to raise questions on the impact such policy decisions are having on the farming community which is already struggling in the face of a changing climate.

“Farmers actually benefit by the export of their produce. Market prices are profitable when their harvest is shipped to foreign countries. When the production is low and the government decides to curb exports, there should be a guarantee for the farmers that they are paid for their arduous labour in the field,” Prahlad Singh, the general secretary of the All India Kisan Sabha, told Gaon Connection.

He acknowledged the need to sometimes put in place curbs to meet the domestic demand but stressed that the minimum support price (MSP) of crops should be increased whenever there is an export ban in the country.

“But leave alone increasing the MSP, the farmers are often forced to sell their produce below MSP because there are too many hassles at the government's procurement centres,” said Singh, who is based in Mirzapur, Uttar Pradesh.

“Why is the system so keen to punish the farmers for no fault of theirs?” he questioned. “We have repeatedly demanded a law which makes it illegal for any trader to buy produce below MSP but nothing has happened so far,” the farmer leader added.

Legal guarantee of MSP was one of the biggest demands of the protesters during the farmers’ protests against the three farm laws which were quashed in 2023.

The desperation of the Indian farmers can be gauged from the fact that recently, Punjab has confiscated about 30,000 gunny bags of paddy from Bihar and Uttar Pradesh. The traders who bought this rice from farmers in these states were found to be smuggling it into Punjab to make better profits

Export Ban — A Necessary Evil?

Pankaj Goel, General Secretary of the All India Rice Exporters’ Association said that the government was rational in its approach to export bans.

“These policy decisions are not overnight ones and undergo a rigorous examination of the challenges in a real time scenario. Ensuring food security is the foremost challenge for any country across the globe. If the production is low, then the exports will have to be curbed,” Goel told Gaon Connection.

But, Vikas Tiwari, an Unnao-based exporter of milled rice, warned that the flip-flops in India’s trade policy is detrimental for the country's commercial interests in the long run.

“Our trading partners are not going to rely on Indian exports for long. They are presently making arrangements for India’s replacement to buy rice. They are growing keen towards countries in South-East Asia such as the Philippines and Vietnam,” said Tiwari.

“The government should do both, protect the farmers from losses and also ensure India’s commercial interests,” he added.

Misrepresentation of ‘Free’ Ration Scheme

Meanwhile, questions are being raised around PM Modi’s recent announcement of extending free rations for five more years. Right to Food India, a Delhi-based non-governmental organisation which advocates for food security of the poorest Indians, calls it ‘election dole’.

“The Right to Food Campaign is against the central government’s actions to misrepresent National Food Security Act 2013 (NFSA) as their own initiative through the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), a misrepresentation being used as an election dole,” it stated in a press statement, on November 6.

The non-profit went on to note that “since January, the central government has been referring to the Public Distribution System as the Pradhan Mantri Garib Kalyan Anna Yojana to hide the discontinuation of the additional 5 kg ration to every ration card holder. The government has termed this as a ‘historic’ decision even though realistically it does not compensate for the high prices of many food commodities in any way.”

According to the Right To Food India, the recent announcement is a clear violation of the model code of conduct. Chhattisgarh Legislative Assembly elections are underway from November 7 till November 17. The announcement of this policy decision reflects an unfair means of influencing voters with the use of state machinery, it said.