There are some terrible things happening globally, but also some exciting things at home. Let me first start with the global situation. The news from Russia-Ukraine war continues to be disturbing. Yet, there seems to be some ray of hope with president Volodymyr Zelenskyy of Ukraine saying that he will not insist on membership of the NATO (North Atlantic Treaty Organization) for his country. This was one of the key sticking points that provoked Russia into invading Ukraine.

Right now, the US and its Western allies may not come for a quick compromise on this. They would like to ‘punish’ Russia through strictest sanctions, hoping Russian president Vladimir Putin bows out of the war and his country becomes so weak that it never raises its head again.

But China has openly indicated that it will stand firmly with Russia, and literally bail it out of the embargo. If China and Russia join hands, it may not be good news either for NATO or for India.

With Indian students now evacuated from Ukraine, prime minister Narendra Modi can take a lead—along with powers that want to be neutral between the West and Russia—to find an amicable solution to end the war, which otherwise is likely to be even more devastating than it has been so far.

The ripple effects of the war are already being felt across the world, with energy and gas prices surging as also also wheat prices breaking all barriers. As on March 7, wheat prices in exporting countries like the US shot up to $525/tonne, up from $275-280/tonne on January 3, 2022. Other wheat exporting countries have also followed suit, with Australian wheat export prices touching $395/tonne, Argentina at $425/tonne, the EU at $460/tonne, and Canada at $478/tonne. Russia and Ukraine together normally export about 50-55 mmt in a total global market of about 200 mmt.

With their supply lines terribly disrupted, there is an opportunity for India to fill up this gap. This wheat window is likely to be there at least for the next 3-4 months, if not longer.

India has large stocks of wheat with the Food Corporation of India (FCI). The buffer stock norm for wheat on April 1 is 7.46 millio metric tons (mmt) while the actual stocks are 23.4 mmt in March 2022. India can easily go for about 15 mmt of exports of wheat.

This will not only reduce its food subsidy bill, but also compensate for the higher costs of imports of crude oil. India needs to scale down its target of procuring wheat in the coming marketing season from 44 mmt to, say, just 30-35mmt, and let the private sector buy wheat at competitive prices. The domestic market prices are likely to be higher than the MSP, provided we keep wheat exports going at a fast pace.

In this context, the news from the domestic front is more exciting. With BJP winning four of the five states that had assembly elections, it is a shot in the arm of BJP for the 2024 Parliamentary elections. The Indian voter needs to be complimented for giving clear victory to BJP in Uttar Pradesh (UP) and the AAP in Punjab. In UP, it reflects that neither the farm protests (largely driven by large farmers of western UP and Punjab) nor the Covid-deaths saga nor joblessness had any significant dent on BJP’s fortunes.

But, in the process, Congress, which was at the forefront of farm protests—remember Rahul Gandhi and Captain Amarinder Singh riding a tractor driven by Sunil Jakhar in support of farm protests?—has almost been decimated in UP and Punjab. In Punjab, even Akalis who always thought that they were the champions of farmers, and the newly-floated party by protesting farmers, all had to bite the dust.

In Punjab, the AAP has given big promises to voters. They range from jobs for all to free power to Rs 1,000 for each woman above 18 years of age, and on top of all this, a corruption-free state! These are lofty ideals and ambitions, but let them assume power and see the crumbling finances of the state, and chalk out a strategy how they will fulfil their promises. Voters will be keenly watching and looking forward to the implementation of these promises. And if the AAP can control corruption and turn around Punjab’s agriculture, making it more prosperous and environmentally sustainable, it can hope to emerge as a national party and replace the Congress as the principal challenger to the BJP in the 2024 elections.

But, let me come back to the wheat window. This is an opportune time for the Centre and the key wheat-growing states to chalk out a reformist action plan. Uttar Pradesh is the largest producer of wheat and should have the biggest say. Punjab and Madhya Pradesh are the largest contributors to the central pool. Haryana, Bihar, Rajasthan and Gujarat are others. There is a need to bring in symmetry in procurement costs.

FCI should put a ceiling on the procurement expenses (including arthiya commission/fee)—say, at 3% of the MSP in all states. Right now, Punjab imposes an 8.5% ‘mandi fee/cess/arthiya commission’, while in most other states it hovers around 3-4%. Yogi Adityanath in UP should take a lead in streamlining the value chains of wheat, rice, sugar, and milk, by inviting private sector companies to build export lines, storage silos with grading, packaging and processing facilities. Adityanath can unleash a revolution in UP agriculture by making it more competitive and opening global markets for UP farmers.

Also, wheat-growing states should give the PDS beneficiaries an option to get grain or cash in lieu of grains that is equal to MSP of wheat plus 20%. That would save the centre precious resources by plugging leakages in the PDS, help diversify agriculture towards high-value crops, and give a better deal to farmers as well as consumers.

The author is Infosys chair professor for agricultre, Icrier