India’s broken rice export ban.

19 Sep India’s broken rice export ban.

 Prelims: Indian economy and Indian social development

Mains: GS paper III: Indian Economy and issues relating to planning, mobilization of resources, growth, development, and employment, major crop pattern In India.

Why in news?

• The ruling government of India, not more than 4 months ago put banned the export of wheat from India, because of unexpected crop failure resulting in low procurement and a decrease in public stocks. . Concerns over a similar situation arising have now led it to impose curbs, albeit not an outright ban, on rice shipments as well

what are the restriction

• India exports four categories of Rice, and out of those, two of them –basmati rice and parboiled non-basmati rice – are openly allowed.
• The restriction is only for the other two: raw(white), and broken non-basmati rice.  
• Recently, the Revenue Department to the Ministry of Finance informed the slapping of 20% duty export on rice “ other than the parboiled and basmati rice “ which was supposed to come into effect from Sept 9.
• It will include all the raw non-basmati rice shipments, whether full or broken grains.
• Another notification of the Directorate General of Foreign Trade in the Ministry of Commerce and Industry puts a blanket ban on broken rice export.
• It concludes that only nonbroken basmati of full-grained will be allowed for export on payment of 20% duty
• The restrictions noticed will come into effect just under half of India’s rice exports in terms of quantity and over a third by value.

 Why these bans?

There are prime reasons :

• The 1st  is  the significant decline of India’s rice production due to the deficient monsoon rainfall in the northern states of India, like Uttar Pradesh, Bihar, Jharkhand, and Gegatic West Bengal.
• The 2nd reason is  It the production of rice in Punjab and Haryana also affected the virus that has caused the “dwarfing” of paddy plants in many fields there.
• The 3rd reason is during current the Kharif season some of the farmers have planted the lower–yielding shorter duration varieties, which is bound to reflect the output.
• The 4th reason is, that rice export is being restricted, as to sustain the public duration system with the low public wheat.
• Broken rice can be used to boost India’s ethanol production. 

What are Parboiled rice and broken rice?

• The type of rice that is obtained, from the milling of paddy grains produced by farmers. In general, paddy has 20-20% husk and 10-11% bran. Remnant of the husk and bran white raw rice that contains 68-69% of paddy. The milled rice at the end has both whole grains and broken grains.
• The paddy with its outer husk is soaked in water, steamed, and dried, hence the rice becomes harder and breakage during milling is called parboiled rice.
• India exports parboiled rice which contains 5-15% broken grains. In raw rice, it is about 25%.
• Rice which is 100% broken exports have been prohibited.

 Rice export in India

•  According to the data, last year more than 70% of  basmati has been exported to Iran and Arabian countries,
• Some more percent were being added to it by the countries like UK, USA, Canada, Australia.
• Almost 55% of non-basmati rice has been exported to African countries. Including countries of south America like Cameroon, Djibouti, Guinea, Madagascar, Somalia Benin, Ivory Coast, Senegal, Togo, and Liberia.
• Most exports to Africa and Bangladesh consist of parboiled rice, while China imports broken rice that has now been banned.

  What is promising about the selective ban on rice exports?

•  The central government of India has determined to make sure the availability of broken rice for various industrial uses and for its own poultry.
• The Eastern countries depend upon Indian cheap rice, mainly for feed purposes depend. so the Rice shipment to the nations in the East has been restricted.
• The central government of India’s indirect message for these countries is to import corn from us.
• Saving the domestic stocks of food grains in a country like India holding a large population is very essential at a time of fears of a global food crisis precipitated by fertilizer shortages and droughts.
• This will help the producer to stand a benefit with corn prices ruling at ₹22,000-23,000 a ton.

What are the criticisms against this government move?

There is fear that the restrictions,

• can affect the supplies in a negative way when the demand will increase in hr global market for Indian rice.
• Bring shortage to the global food.
• Surplus the inflation in the poor countries.

What is the way ahead?

• 1st  is to reduce export prices can be announced to intercept any under-invoicing.
• 2nd, There should be periodic checks to make sure  premium non-Basmati and other types of rice are not get shipped as Basmati rice to avoid  the 20% tax by hawala traders.
•     The 3rd , will be to ensure that other types of rice are not mixed with Basmati and shipped out to evade the tax. In both these cases, there is a lurking danger of hawala traders operating through this channel.

sources :

https://bit.ly/3BSVAo0(The Indian Express )(The curbs on India’s rice exports)

https://bit.ly/3BRGfns(thehindu)(India is right in curbing rice exports)

Plutus IAS Current affairs eng med 19th Sep 2022

farhin