Rice!
For those who moan over the annual food inflation at 14.55 percent, comes salt for the wound. India! hailed as the second largest country in rice production will be importing rice after 21 years. How and why are two serious questions that everyone wants to look into. Rice being the backbone of India with high percentage of consumers in its eastern and southern parts, measuring the impact of this rice import in common man's (Indian citizen) life is crucial.
How and why it happened? We all know India's agricultural sector depends greatly on the monsoons. This year the monsoon has failed. Government reports 23% below normal monsoon. This also is rated as the worst in 37 years. So the impact is evident and justified. The state cannot be held responsible for failed monsoon. We have to accept the decision with gumption.
This year's poor monsoon has raised doubts about the output of summer-sown crops popularly called as kharif crops. The estimated shortage of production is around 69.45 million tonnes at 18 percent. Government reports as on Oct. 1, rice stocks at warehouses were 84 percent higher at 14.5 million tonnes than last year. Still we are importing. Indian Government is desperate in importing at least 3 million tonnes. In this scenario a peek into the figures on export is also mandatory. It averages to 4.56 million tonnes from 2002-2009. When we predict a shortage in production, the decision on exporting this much needs to be questioned. Forecasting import is as necessary and inevitable and it should be treated on par with a check on the export rate. It requires careful analysis too. At last! at the political front, rice politics usually is famous in India and no Government will even think of messing up with rice.
Government strives to work out a state-to-state deal with Thailand the biggest rice exporter. State-to-state trade may be a good strategic with the following advantages.
How and why it happened? We all know India's agricultural sector depends greatly on the monsoons. This year the monsoon has failed. Government reports 23% below normal monsoon. This also is rated as the worst in 37 years. So the impact is evident and justified. The state cannot be held responsible for failed monsoon. We have to accept the decision with gumption.
This year's poor monsoon has raised doubts about the output of summer-sown crops popularly called as kharif crops. The estimated shortage of production is around 69.45 million tonnes at 18 percent. Government reports as on Oct. 1, rice stocks at warehouses were 84 percent higher at 14.5 million tonnes than last year. Still we are importing. Indian Government is desperate in importing at least 3 million tonnes. In this scenario a peek into the figures on export is also mandatory. It averages to 4.56 million tonnes from 2002-2009. When we predict a shortage in production, the decision on exporting this much needs to be questioned. Forecasting import is as necessary and inevitable and it should be treated on par with a check on the export rate. It requires careful analysis too. At last! at the political front, rice politics usually is famous in India and no Government will even think of messing up with rice.
Government strives to work out a state-to-state deal with Thailand the biggest rice exporter. State-to-state trade may be a good strategic with the following advantages.
- Thailand is planning to clear its stockpile for supporting new harvest.
- Procurement from Thailand can be effective since the domestic procurement price from the farmers of the state is slightly ahead of Thailand's export price, This gives procurement possibility at competitive rates.
- Tender based import deals can be overlooked by state-to-state trade deals. This can squeeze up the deal price further.
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