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Ukraine war-triggered wheat exports an attempt at bridging a shortage but exposes policy gaps

“India has lacked a consistent policy on import and export of foodgrains, which in the current context mayleave scope open to ad hoc measures to curb or allow exports,” says Sukhpal Singh, professor and former chairperson, Centre for Management in Agriculture at the Indian Institute of Management (IIM), Ahmedabad.

wheat export
With Ukraine ingulfed in war with Russia and wheat supplies from both these major exporters of wheat falling, India took to filling a void.

There is no gain if it is at the cost of someone else’s pain but it can still be a chance to learn and course-correct, if possible. This seems a basic truth that experts are pointing to when viewing India’s role in the international wheat market. With Ukraine ingulfed in war with Russia and wheat supplies from both these major exporters of wheat falling, India took to filling a void. Now, whether one sees it as stepping in to bridge a global gap or seizing an opportunity, the point really is that Indian exporters took to attempting to ramp up wheat supplies and that too in a market that was seeing higher price of wheat in the international markets. But there are challenges.

While for India, having more than adequate buffer stocks, export of wheat was possible, experts see this development as a reminder of the need to correct some policy gaps. “India has lacked a consistent policy on import and export of foodgrains, which in the current context mayleave scope open to ad hoc measures to curb or allow exports,” says Sukhpal Singh, professor and former chairperson, Centre for Management in Agriculture at the Indian Institute of Management (IIM), Ahmedabad. He says, a lack of consistent policy on foodgrain imports and exports can get ad hoc also because tracking them will need real-time monitoring of exports and imports and be able to take counter measures in case of overcommitment by private exporters. Today, professor Singh says, “there are reasonable stocks available for India to export wheat and post November when the free ration scheme (triggered by the pandemic) is to conclude, more would get added to the buffer. However, a better grip on the export commitments backed by a consistent policy would help domestic farmers and exporters be in a position to gain from opportunities that arise in the global markets while also making it possible to maintain a close watch on the domestic foodgrain availability.

The other policy gap, he feels that may needs greater attention and highlighted at the momentby the wheat exports is on the quality issues. India, he says, has not been a traditional wheat exporter and has yet to build an image as a quality producer.

On the question of the extent to which exports now could impact domestic supplies, Professor Singh does not see the current exports hurting domestic supplies. He sees the current exports as mostly those from private exporters and from wheat bought at above MSP (Minimum Support Price) or market prices.

He however also says: “the export opportunity and higher wheat prices will dampen rationale for legal MSP which will be a sad fallout as this export opportunity is more of an episodic phenomenon that we are experiencing this year.”

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