News: As per the third advance estimate of crop production for the year2021-22, India has harvested a record foodgrain production, up by 3. 77 MMT over the preceding year.
While the rice production is up compared to previous year, wheat production is a bit low.
It has led to several negative effects on traders who purchased wheat at higher price, on farmers due drop in price. Also, Export controls and stocking limits inflict an ‘implicit tax’ on farmers.
What government can do to contain negative effects of export ban?
It should announce that it will honour its commitment to exporting 10 MMT of wheat. Additionally, it can export 10-15 MMT of extra rice.
It can provide bonus for wheat farmers who want to sell wheat to government.
Under, PMGKAY and NFSA allocations, government can give option of cash to beneficiaries. It will give beneficiaries an option to buy more nutritious food, be it pulses, milk, eggs, meat or fish.
Lastly, government should reconsider its policy of free food under PMGKAY and NFSA to 800 million plus people.
Source: This post is created based on the article “Why GoI Can Resume Wheat Exports” Published in The Times of India on 23rd May 2022.