Wheat imports undermine India’s position in WTO

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: India is deliberately weakening its bargaining position in WTO by unnecessarily resorting to wheat imports against zero duty and relaxed quarantine norms when the granary is full.

The government has recently estimated that the wheat production in the current year will increase by 1.5% to beat 73.1 million tonne(mt), which is more than sufficient to meet domestic needs. Market arrival of wheat has already begun following the harvest. Despite the slackness of the government agencies in procurement, the stock in the Central pool has increased to over 7 mt in last few days.

The decision to import wheat was taken in February this year, when the stock in the Central pool was 4.8 mt. This was more than sufficient to meet the needs of the public distribution system and other welfare schemes till April, that is the beginning of the harvest season.

The government cited “rising domestic prices due to shortage” as a pretext for imports. It was a fact that prices of wheat marked a phenomenal rise, particularly in the South in January and February. But it was due to artificial shortage rather than actual shortage. Last year wheat output was 72 mt. The government agencies procured about 18 million tonne. The private trade procured and stocked a substantial amount. In the name of “liberalisation of the economy” the government removed all restrictions on the stocking limit. The result is that the private trade is now in a position to stock any amount and manipulate market prices. It is a shame that the government, instead of re-imposing stocking limits, is citing the need for imports on the pretext of “shortage”.

The government move has exposed its ulterior motives. It wants to put in place a liberalised export-import policy for agro commodities, which is likely to prove fatal for the farmers. This will, in the long run, lead to the influx of cheap subsidised imports.

Apart from the decision to import five lakh tonnes, government has also decided to import an additional three million tonne. This decision is taken evidently based on the US Department of Agriculture (USDA) report suggesting India to export an additional 2 mt.