Export Avenue for Farmers
With a bumper harvest on the way, and prices having firmed up because of the war in Ukraine, Indian farmers could have an opportunity for higher exports amid restrictions on Russian cargo movement.
Reasons for increasing exports:
- The surge in rice exports since 202-21 has been driven by a drought in Thailand.
- Diversion of free/subsidised grains meant for PDS substantially increased post pandemic.
- Russia and Ukraine account for 28% of wheat export. The war has led to port closures in Black sea and Russian cargo movement has been restricted through the Caspian sea.
Benefits:
- As supplies from these two key agri powerhouses have dried up, it has created opportunities for India to fill the gap, even if partially.
- Further, it has driven up global prices and can provide better monetary gains for farmers.
- Farmers in Rajasthan, MP, KNK, Bihar, Gujarat are likely to release MSP-plus prices on the back of rising export demand.
- With lower procurement and PM Garib Kalyan Yojana ending this month, there could be a reduction in the centre’s food subsidy outgo as well.
- The improved price sentiment may induce farmers to plant more area under maize, cotton, soyabean, sunflower in the upcoming kharif season and can help in crop diversification.
Issues:
- There is a possibility of exporters competing among themselves to ship out maximum quantity of grains. eg: Indian wheat being heavily discounted.
- Logistics issue: Rush of cargoes is resulting in congestion at ports and vessel wait period is also increasing.
- Increase in fertiliser prices and their raw materials/intermediates can lead to increase in overall cost.
Way forward:
- Ensuring adequate availability of urea, DAP, MOP (muriate of potash) well before the start of kharif plantings is necessary.
- The government is in talks with other countries such as Canada, Israel etc to secure supply of various inputs.
READ MORE: Daily Prelims Booster
READ MORE: Daily News Analysis
Leave a Comment