The Committee on Cotton Production and Consumption (COCPC), at a recent meeting, estimated cotton production this season, ending September, at 323 lakh bales and exports 27 lakh bales.

The Cotton Association of India (CAI), however, said production will be 309 lakh bales mainly because it expects production in Telangana to be 34 lakh bales against 48 lakh bales estimated by the COCPC. “We get the cotton-pressing data from the Telangana ginners association. Telangana production this year is higher than last season. But, it is not high as estimated by COCPC,” CAI president Atul Ganatra said.

Indian cotton prices were lower in December and January compared with the international prices and so almost 15 lakh bales were shipped till the end of last month. The Indian cotton prices have increased and only the contracts entered earlier will be shipped this month. So, exports will be 20-22 lakh bales this season, he said.

S. K. Sundararaman, chairman of the Southern India Mills Association (SIMA), advised the textile mills to avoid panic buying based on various estimates. Cotton price increased from ₹55,300 a candy to ₹61,500 per candy of 355 kg last month though the supply position is comfortable.

The Cotton Corporation of India is prioritising supply to textile mills, especially the smaller units. It has high quality cotton with it and so there is no need for panic in the market, he said.

The world’s trade Ministers gathered in the U.A.E. on February 26 for a high-level WTO meeting with no clear prospects for breakthroughs, amid geopolitical tensions and disagreements.

The World Trade Organisation’s (WTO’s) 13th ministerial conference (MC13), scheduled to run until February 29 in Abu Dhabi, the capital of the United Arab Emirates, is the first in two years.

The WTO is hoping for progress, particularly on fishing, agriculture and electronic commerce.

But big deals are unlikely as the body’s rules require full consensus among all 164 member states — a tall order in the current climate.

“I don’t have hopes that a very substantive agreement will be announced,” said Marcelo Olarreaga, Professor of Economics at the University of Geneva.

“My impression is that the negotiators are dealing with tactical positions — how to make it look like it is the other [side] who is blocking negotiations,” he told AFP.

Even WTO Director-General Ngozi Okonjo-Iweala has said she expects the meeting to be challenging due to the “economic and political headwinds” — from the war in Ukraine, attacks in the Red Sea, inflation, rising food prices and economic difficulties in Europe and China.

Her team is working around the clock to draft agreements for the talks, she told journalists this month, noting that “negotiating positions are still quite tough”, notably on agriculture.

‘Miracle’

During the WTO’s last ministerial meeting, held at its Geneva headquarters in June 2022, trade ministers nailed down a historic deal banning fisheries subsidies harmful to marine life and agreed to a temporary patent waiver for COVID-19 vaccines.

They also committed themselves to re-establishing a dispute settlement system which Washington had brought to a grinding halt in 2019 after years of blocking the appointment of new judges to the WTO’s appeals court.

“Replicating the success, the miracle, of MC12 in 2022 will be extremely challenging,” European Trade Commissioner Valdis Dombrovskis said this month.

“Negotiations on the big-ticket items” — such as fisheries, agriculture and the e-commerce moratorium — will “remain open until the final phase of the conference”, he added.

“Negotiations on dispute settlement reform and potentially some parts of the outcome document will also be challenging.”

However, the WTO faces pressure to eke out progress on reform in Abu Dhabi ahead of the possible re-election of Donald Trump as U.S. President.

During his four years in office from 2017 to 2021, Mr. Trump threatened to pull the United States out of the trade body and disrupted its ability to settle disputes.

“There will be the U.S. elections in November…so this is the last chance,” a diplomatic source in Geneva told AFP on condition of anonymity.

“Postponing anything until after MC13 is not a good strategy.”

Earlier this month, U.S. Trade Representative Katherine Tai underlined Washington’s “commitment to reforming the WTO and creating a more durable multilateral trading system”.

But Olarreaga of the University of Geneva said the other members of the WTO “cannot expect huge concessions” from the administration of U.S. President Joe Biden in an election year.

‘Fragmentation’

While there is doubt over progress at the WTO on major issues such as agriculture, there is hope for small advances on other fronts, particularly aid for developing countries.

On Feb. 26, two new countries, the Comoros and East Timor, are expected to be accepted as WTO members.

More than 120 countries and regions, including China and the European Union, but not the United States, issued a ministerial declaration early on Feb. 26, marking the finalisation of an agreement aimed at facilitating international investments in development.

They also issued a submission requesting the official integration of the deal into the WTO, but some diplomats fear Opposition from India, which rejects any agreement that does not include all member states.

But amid the difficulty of obtaining full consensus, more and more plurilateral agreements — deals with a narrower number of signatories — are being reached, applying only to the participating countries.

Adding to the challenges for those gathering in the U.A.E., is the ongoing war in Gaza and related attacks by Yemeni rebels on ships in the Red Sea, a campaign that has disrupted global maritime trade.

“The current situation is characterised by geopolitical tensions,” said a European diplomat who spoke to AFP on the condition of anonymity.

“High expectations from developing nations following the financial crisis and the Covid-19 pandemic, as well as economic tensions due to inflation… [add to the] risk of fragmentation of the global economy,” the diplomat said.

According to Union Finance Minister Nirmala Sitharaman, the PM Kisan SAMPADA Yojana has benefited 38 lakh farmers and assisted 2.4 lakh self-help groups. File photo
| Photo Credit: REUTERS

Enumerating the benefits of the agriculture schemes implemented by the Modi government in her interim budget speech, Finance Minister Nirmala Sitharaman on Thursday, touted that the PM Kisan SAMPADA (Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters) Yojana has benefited 38 lakh farmers and assisted 2.4 lakh self-help groups (SHGs). The scheme uses modern infrastructure and supply chain management to ease the transfer of farm goods from farmers to retail outlets.

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She added that the government will promote private and public investment in post-harvest activities, including storage, processing. Usage of nano Diammonium phosphate (DAP) fertilisers on crops will be expanded for all agro-climactic zones said Ms. Sitharaman. A strategy focusing on oilseeds will be formulated soon covering research for high-yielding varieties, procurement, value addition and crop insurance.

Apart from these, the Finance Minister also announced a comprehensive program to support dairy farmers, tackle the Foot and Mouth Disease among cattle. Lauding the establishment of a separate fisheries department, the Minister informed the Parliament that the PM Matsya Sampada yojana has helped double seafood exports from 2013-14. The scheme will be boosted to generate 55 lakh jobs and boost exports to Rs 1 lakh crore.

Also Read | Interim Budget 2024: Highlights

The Finance Minister is presenting the interim budget for the FY 2024-25 as a ‘stop gap’ measure for the transition period between April and June/July. After the Lok Sabha elections scheduled to be held in April-May, the new government will present a full-fledged budget in which Ms. Sitharaman has promised to present a pathway for ‘Vikasit Bharat’ (developed India).

Slack in consumption demand for Fast-moving consumer goods (FMCG) has been concern of the agriculture sector. High input costs has lead to companies hiking goods, leading to slump in demand. the advance GDP estimates shows the sector’s growth decelerate from 4% in 2022-23 to 1.8% in the current fiscal. Even the Index of Industrial Production (IIP) data for April-November revealed the output of consumer durables decelerated to 0.6 per cent, against 5.3 per cent in the same period last year.

Seeking to tackle these issues, the sector hoped that the government may tweak the tax slabs in the new regime or increase standard deduction, allowing taxpayers a breather.

Homes are surrounded by floodwaters in Sohbat Pur city, a district of Pakistan’s southwestern Baluchistan province
| Photo Credit: Zahid Hussain

Disaster events are not only becoming more frequent and severe but their impact is also expected to worsen. The year 2023 brought an end to the warmest decade on record, marked by unprecedented extreme weather events and large-scale disasters. These catastrophes were worsened by ongoing conflicts and the COVID-19 pandemic.

A report by the Food and Agriculture Organization titled ‘The Impact of Disaster on Agriculture and Food Security’ found that the frequency of extreme disaster events has risen significantly over the past 50 years. The 1970s saw approximately 100 disaster events per year. In the last 20 years, that number went up to about 400, globally (Chart 1). 

Chart 1 | The chart shows the number of disasters by EM-DAT (the international disaster database) grouping and total economic losses in $ billion.

Chart appears incomplete? Click to remove AMP mode

According to the EM-DAT database of the Centre for Research on the Epidemiology of Disasters, 2022 witnessed nearly 31,000 deaths and an estimated $223.8 billion in economic losses from disasters, affecting over 185 million people. 

Agricultural activities and livelihoods rely heavily on environmental conditions, natural resources, and ecosystems. Globally, the agriculture sector faces growing threats from hazards such as flooding, water scarcity, drought, diminishing agricultural yields, fisheries depletion, loss of biodiversity, and environmental degradation. For instance, in Pakistan, exceptional monsoon rainfalls in 2022 led to nearly $4 billion in damages to the agricultural sector. In the U.S., the National Oceanic and Atmospheric Administration estimated over $21.4 billion in crop and rangeland losses in 2022, with drought and wildfires responsible for most of the crop losses.

Data from 88 Post-Disaster Needs Assessment surveys conducted from 2007 to 2022 in 60 countries indicated that agricultural losses constituted an average of 23% of the overall impact of disasters across all sectors. However, the available data are limited, primarily focusing on low-income countries and major extreme events. A comprehensive global estimate of economic losses across all sectors is unavailable.

PDNAs revealed that more than 65% of losses attributed to drought affected the agricultural sector, while floods, storms, cyclones, and volcanic activities each accounted for roughly 20% (Chart 2). 

Chart 2 | The chart shows the share of loss in agriculture by hazard type. 

However, data on loss and damage are not systematically collected or reported. To address this gap, the report used secondary data sources such as EM-DAT and FAOSTAT production data to quantify the impact of disasters on agriculture, with a specific focus on crop and livestock production. Findings indicated that estimated losses in these sub-sectors have been gradually increasing over the past three decades. 

The total loss from extreme events over the past 31 years amounted to approximately $3.8 trillion, averaging about $123 billion per year. 

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Losses across major crop and livestock product groups exhibited increasing trends (Chart 3). Over the past three decades, estimated losses in cereals averaged 69 million tonnes annually. Losses in fruits and vegetables, along with sugar crops, averaged 40 million tonnes each annually. Meats, dairy products, and eggs experienced an estimated loss of 16 million tonnes per year. 

Chart 3 | The chart shows the estimated loss in various product groups (in million tonnes) between 1991 and 2021.

The distribution of total losses across regions from 1991 to 2021 also reflected the geographic size of each region. Asia bore the largest share of economic losses (45%), while Africa, Europe, and the Americas displayed similar orders of magnitude. Oceania experienced the lowest total losses (Chart 4).

Chart 4 | The chart shows the distribution of the total estimated $3.8 trillion losses by region (1991-2021).

In absolute terms, high-income countries, lower-middle-income countries, and upper-middle-income countries reported higher losses, while low-income countries and Small Island Developing States experienced lower levels. However, when considering losses relative to agricultural value added, low-income countries suffered losses more than double those of upper-middle-income countries on average (Chart 5).

Chart 5 | The chart shows total agricultural losses as a share of agricultural GDP by country groups (1991-2021).

Source: FAO report titled “The Impact of Disasters on Agriculture and Food Security 2023”

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A policy brief argued for a rational trade policy to contain food inflation which takes into account both consumers and producers.
| Photo Credit: TRAVELLINGLIGHT

A policy brief issued by the Indian Council for Research on International Economic Relations said that the recent steps taken by the government to curb inflation, such as wheat and rice export bans and increasing export duties, were “knee-jerk approaches rather than a well-thought-out strategy”. It argued for a rational trade policy to contain food inflation which takes into account both consumers and producers.

In August 2023, retail inflation accelerated to 6.83%, which is higher than the ceiling of 6%. As food and beverages carry a 57% weightage in India’s retail inflation calculation, and food inflation was 9.94%, rapid acceleration in that segment had a severe impact on retail inflation (Chart 1).

Chart 1 | The chart shows the trend of retail inflation (dark blue) and food inflation (light blue) over time.

Chart appears incomplete? Click to remove AMP mode.

To date, the Indian government has implemented a series of actions aimed at controlling food inflation such as prohibiting the export of wheat in May 2022 and halting the export of broken rice in September 2022. Additionally, in June 2023, the government imposed stocking limits on wheat traders and millers. In July 2023, an export ban was placed on non-basmati white rice, followed by a 20% export duty on parboiled rice. In August 2023, a Minimum Export Price of $1,200 per tonne was set for basmati rice, along with a 40% export duty on onions.

Chart 2 | The chart shows the chronology of trade and domestic stock policy measures to tame the inflation of rice and wheat. 

Due to heatwaves, the production of wheat has suffered in the last two years. Wheat procurement by the government has also been low in the last two cycles. Wheat inflation was 9.22% in August. All this prompted the government to ban wheat exports in May 2022, argues the brief. “But this sudden ban on wheat exports, instead of bringing wheat inflation down, led to greater uncertainty in the market and wheat inflation surged to 15.7 per cent in August 2022, when GOI also banned exports of wheat flour (atta) products,” says the policy brief. Just before the harvest season, wheat inflation accelerated to 25.4% in February 2023. Following this, the government off-loaded wheat under the Open Market Sales Scheme at much cheaper prices and announced wheat stocking limits, according to the policy brief. While these measures did bring down inflation, the report argues that the implications of such measures on farmers who bore the brunt have to be taken into account.

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Chart 3 | The chart shows trends in cereal exports in India. 

Data from the report shows that non-basmati exports increased from 1.38 MMT in FY20 to 6.40 MMT in FY23, by 363%. The report argues that in the fiscal year 2023, the per-tonne export value for non-basmati rice stood at $344, falling below India’s Minimum Support Price (MSP) for rice. This indicates that millers may be sourcing rice directly from farmers or that there could be an increase in rice supply due to potential distribution leakages from the expanded PMGKAY free rice programme. 

Chart 4 | The chart shows the offtake of rice and wheat under the National Food Security Act and PMGKY from the central pool. 

Chart 3 and Chart 4 underscore the growth in rice and wheat offtake within the last three years, as well as the significant rise in grain exports from India over the same time period.

In July 2023, when rice inflation was 13%, the government banned the export of non-basmati rice. Yet, inflation remained at 12.5%. Rather than imposing export duty and gradually increasing its impact, the government called for a ban which created panic among the African and Indian diaspora in the U.S., according to the report.

Source: A report called “Tackling food inflation: Is restricting exports and imposing stocking limits the optimal policy?” published by the Indian Council for Research on International Economic Relations

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Around half a million metric tons of urea are held up at Chinese ports after China curbed exports of the key fertiliser following a price surge, an analyst and Indian company official said.

As the world’s largest producer of urea, China accounts for about a third of global supplies of the nitrogen-based fertiliser, which is critical to growing crops.

Two Chinese state-owned urea producers will prioritise domestic supply, company notices this month showed, while port inspections on some cargoes of the chemical have been suspended, Gavin Ju, principal fertiliser analyst at CRU Group, said.

China’s National Development and Reform Commission (NDRC) did not immediately respond to a request for comment.

About half a million metric tons of urea bought by Indian Potash Limited (IPL) is currently being held at the Chinese port of Tianjin, awaiting inspections and clearance, said Ju.

An Indian fertilizer industry official told Reuters there had been an unusual delay in the loading process because of inspections.

An official at China’s general administration of customs said it could not immediately comment on the situation.

India’s Rashtriya Chemicals and Fertilizers Limited (RCF) may also struggle to secure large purchases of over one million tons in a recently issued tender, said Ju.

Neither Indian company immediately responded to requests for comment.

Urea futures on China’s Zhengzhou Commodity Exchange reached 2,600 yuan ($353.84) per ton on Sept. 1, the highest level since March, after a surge in demand from India, triggering efforts to slow shipments.

CNAMPGC Holding Ltd, one of China’s top fertiliser exporters, said it will proactively decrease exports and “make every effort” to ensure domestic supply and price stability, according to a notice dated Sept. 2 on its website.

State-owned China National Offshore Oil Company (CNOOC) has also urged its subsidiaries to prioritise urea supply to the domestic market ahead of the autumn sowing season, according to a Sept. 4 notice seen by Reuters.

CNOOC did not immediately respond to a request for comment.

China’s urea futures have declined about 4% since the Chinese companies’ announcements.

But the Chinese curbs will raise global prices and spending by India on fertilisers, said Indian company officials, who declined to be named.

India imports about 30% of around 35 million metric tons needed each year for its vast agriculture sector and China was its second largest supplier last year.

Supplies from Oman, Saudi Arabia, Egypt, and Russia could fill the gap, said an Indian industry official.

Midday Meal workers burn copies of Union Budget 2023-24 during their protest, in Kolkata, Thursday, Feb. 2, 2023.
| Photo Credit: PTI

The Samyukt Kisan Morcha (SKM), the umbrella organisation of more than 300 farmers’ outfits and the Right to Food Campaign, a platform for activists working on food and nutritional security, termed the Budget as an attack on farmers and the poor. They said in separate statements that the allocations for the agriculture sector and food subsidy had been reduced considerably in the Budget, presented in the Parliament on Wednesday.

The SKM, expressing shock and bewilderment at the Union Budget, said it had expected the Centre to appreciate the importance of the farm sector with the need to secure income and future of the rural farming community. “Instead, the Union Budget 2023 is the most anti-farmer Budget in the history of the nation,” they said.

The Budget was silent on doubling farmers’ income, the SKM said adding that the Centre “dishonestly stopped” giving data on the income of farmers and out of the targeted increase in the income of ₹13,000, only ₹4,400 had been achieved, that is only one-third of the target, the SKM said.

The grant for PM Kisan Samman Nidhi had been reduced, they said and alleged that the number of beneficiaries had been steadily declining and now the portal had stopped displaying real-time beneficiary data. “At a time of deep economic distress, this scheme gave some relief to farmers but now even that is being constricted,” the SKM said.

Social spending reduced

The Right to Food Campaign said it was shocked to see that the Budget reduced the government spending on the social sector to a huge extent. “The negative impact of the economic crisis that began even before the pandemic, has fallen disproportionately on those at the bottom of the pyramid,” the platform noted. The activists said with the discontinuation of the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) from January 1, 2023, the ration entitlement of the people was halved.

“Women and children of the country have once again been ignored even when they have been most affected by the pandemic and the continued economic severity. The allocations for Samarthya (including maternity entitlements), and PM POSHAN (mid-day meals) have reduced considerably this year as well,” they said.

A farmer spreads fertilizer in a field, at a village in Madurai.
| Photo Credit: PTI

Globally, there is a twin crisis in agriculture: in food and in fertilizers. On the one hand, there are fears of a fall in the global production and availability of food. The rise in food inflation has been an area of serious concern for the government and the Reserve Bank of India. On the other, global fertilizer prices have risen by about 200% over the past two years. Consequently, the prices of fertilizers and other farm chemicals in India have also shot up.

Domestically, the Union government has the unenviable task of explaining why it failed to double the real incomes of farmers between 2015 and 2022. Official data show that real incomes from cultivation have fallen in absolute terms after 2015. Between 2020-21 and 2022-23, annual growth rates in agriculture and allied sectors have been stagnant between 3% and 3.5%. Agricultural exports have risen, but the impact of this has been insignificant outside a handful of commodities.

Thus, the objectives of the Budget could be formulated as two-fold: one, it must have protected farmers and consumers from the food and fertilizer crises; and two, it must have taken steps to raise net incomes from cultivation.

Disappointing allocations

It was widely expected that food and fertilizer subsidies would be retained or increased. The restructuring of the food distribution guidelines, which effectively ended a part of the free supply of food grains under the Pradhan Mantri Garib Kalyan Anna Yojana, was a disappointment even prior to the Budget. The Budget has reaffirmed that stance and cut food subsidy from ₹2.87 lakh crore in 2022-23 (RE) to ₹1.97 lakh crore in 2023-24 (BE). Fertilizer subsidies have also been cut from ₹2.25 lakh crore to ₹1.75 lakh crore. In effect, these cuts will expose farmers to the vagaries of the global market and render the economics of agriculture more fragile. Landless households in rural areas are also likely to be affected adversely, as the allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme has been cut from ₹73,000 crore in 2022-23 (BE) to ₹60,000 crore in 2023-24 (BE).

The cut in fertilizer subsidies will increase the costs of cultivation for farmers, but there is no amelioration to be expected from a compensatory rise in output prices. The rise in minimum support prices between 2020-21 and 2021-22 just covered for the rise in input costs and did not leave any space for higher net incomes.

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There has been no solace on the production front too. Yields in agriculture remain low. Rising fertilizer prices have led to lower consumption of fertilizers in farms, leading to imbalanced nutrient application and even poorer prospects of yield rise. The government, on the other hand, has been promoting variants of “natural farming”. The Budget has even allocated ₹459 crore to a new National Mission on Natural Farming. But natural farming has no scientific validation and is likely to reduce crop yields by 25-30%. If yields fall, how can farming stay viable in the face of rising input prices and stagnant output prices?

Capital expenditure

Amidst all the talk of raising capital expenditure, agriculture presents us with a story of utter neglect. Capital investment is required in agriculture not just for irrigation but also to build/improve agricultural markets (mandis). The total capex of the government in 2022-23 was ₹7.5 lakh crore, but allocation under the capital accounts of crop husbandry, animal husbandry, dairy and fisheries was just ₹119 crore. In 2023-24, this is expected to fall to ₹84.3 crore. Under the capital account of irrigation and flood control, the budgeted allocation in 2022-23 was only ₹350 crore, which is slated to fall to ₹325 crore in 2023-24. The Agriculture Infrastructure Fund (AIF) is another much-touted scheme. The budgeted allocation for AIF in 2022-23 was ₹500 crore, of which only ₹150 crore was spent. In 2023-24, the allocation of ₹500 crore has been retained.

The Finance Minister made a series of other announcements on agriculture in her speech, but the allocations for these schemes or scheme components are not listed in the Budget documents. Essentially, all these are fragmented allocations thinly spread across diverse departments with only an indirect or marginal impact on the agricultural sector. Good examples are the Agriculture Accelerator Fund, PM-Pranam, GOBARdhan, Bhartiya Prakritik Kheti Bio-Input Resource Centres, Mishti, and Amrit Dharohar. There was much time spent in the speech on millets too, but without any explicit allocation other than in upgrading a Centre for Excellence in Hyderabad. There was yet another announcement on a targeted investment of ₹6,000 crore under the Pradhan Mantri Matsya Sampada Yojana, but the actual increase in allocation in the Budget papers is only ₹ 121 crore.

The Budget fails to address the most pressing problems in Indian agriculture. The lack of a scientific and grounded vision, which must have ideally driven the quantum and direction of allocations, is telling.

R. Ramakumar is Professor at the Tata Institute of Social Sciences, Mumbai

Image for representation purpose only.
| Photo Credit: K.K. Mustafah

Considering the huge increase in the prices of fertilizers in global market, the Centre has ‘doubled’ the fertilizer subsidy for this rabi season. A meeting of the Union Cabinet here on Wednesday approved a subsidy of ₹51,875 crore to Nitrogen (N), Phosphorus (P), Potash (K) and Sulphur (S) for Phosphatic and Potassic (P&K) fertilizers for the ongoing rabi season.

From the budget estimate of ₹21,000 crore of nutrient-based subsidy, the amount has been more than doubled, said Union Minister for Fertilizers and Chemicals Mansukh Mandaviya. Briefing reporters after the meeting, he said the Centre revised the subsidy keeping the increasing market prices in mind.

‘Highest so far’

He said the total fertilizer subsidy for the rabi season, including ₹80,000 crore for urea, would be ₹1,38,875 crore and for both the rabi and kharif, the subsidy amount would be ₹2.25 lakh crore. “This is the highest subsidy so far. Last year it was ₹1.65 lakh crore,” Mr. Mandaviya said and added that as commercial prices had doubled due to the Ukraine-Russia conflict and the logistics issues due to pandemic the Centre decided to double the subsidy component too. “Increased prices would have burdened the farmers. We have ensured that there will not be any increase in the fertilizer prices in the next six months,” he said.

Also Read | Reforming the fertilizer sector

Mr. Mandaviya said a bag of Diammonium Phosphate cost ₹1,350 and it would have been cost ₹2,650 without subsidy. On urea, he said, the subsidy was around ₹2,400 per bag as a bag was being sold for about ₹266 instead of the market price, which was ₹2,700.

He added that the Centre had taken up measures to increase production of urea in the country. While the requirement was 350 lakh metric tonnes (LMT), the production in the country was 250 LMT. He said four new plants were coming up and nano urea would also replace the use of urea slowly. Mr. Mandaviya said the country had enough stock of fertilizers for this season and reports about farmers queueing up to buy fertilizers were blown out of proportion.

Also Read | No shortage of fertilisers in the country, says Mandaviya

The Centre said the move would help the farmers. “This will enable smooth availability of all P&K fertilizers to the farmers during rabi 2022-23 at the subsidised / affordable prices and support the agriculture sector. The volatility in the international prices of fertilizers and raw materials has been primarily absorbed by the Union government,” a government release said.

According to a notification by the Revenue Department, an export duty of 20% has been imposed on ‘rice in husk (paddy or rough)‘ and ‘husked (brown) rice’.
| Photo Credit: Sandeep Saxena

The Centre on Thursday imposed an export duty of 20% on rice, brown rice, and semi-milled as well as wholly milled rice except for parboiled rice to boost domestic supplies, effective September 9.

According to a notification by the Revenue Department, an export duty of 20% has been imposed on ‘rice in husk (paddy or rough)‘ and ‘husked (brown) rice’.

The development comes in the wake of concerns about lower paddy sowing by farmers this Kharif season amid uneven monsoons in parts of the country, that have exacerbated inflationary expectations and nudged up retail prices for rice in recent weeks.

The Central Board of Indirect Taxes & Customs further said the export of ‘semi-milled or wholly-milled rice, whether or not polished or glazed(other than Parboiled rice and Basmati rice)‘ will also attract a customs duty of 20 per cent.

The export duty will come in force from September 9, the notification added.The area under the paddy crop has been down by 5.62% at 383.99 lakh hectares in the ongoing Kharif season so far due to poor rains in some states, as per the latest data released by the Agriculture Ministry.

India, the world’s second-largest rice producer after China, commands a 40% share in the global trade.

The country exported 21.2 million tonnes of rice in the 2021-22 fiscal year, of which 3.94 million tonnes were Basmati rice. It exported non-Basmati rice worth $6.11 billion in the same period, as per official data.

The country exported non-Basmati rice to more than 150 countries in 2021-22.

Welcoming the export duty, former president of All India Rice Exporters Association Vijay Setia said Indian rice was being exported at a “very low price”. The export duty would lead to a reduction in non-Basmati rice shipments by 2-3 million tonnes, but the realisation from the exports would remain the same because of the 20% duty.

“It is a good decision in view of fall in paddy acreage,” Mr. Setia said.

The association’s current president Nathi Ram Gupta said the export of raw rice from southern parts of the country would be impacted, but shipments of parboiled may go up.

Paddy is the main Kharif crop, sowing of which begins with the onset of the southwest monsoon in June and harvesting starts from October onwards.

Rice production rose to a record 130.29 million tonnes in the last crop year as against 124.37 million tonnes in 2020-21.

The government has already restricted exports of wheat.