The wheat problem

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Wheat is an important crop and it is mostly taken in Punjab. But there is immense shortage of wheat which has triggered tension in government as well as crop market circles. There are many reasons for the shortage and subsequent price rise. The government has immediately banned export of the crop. Undoubtedly, this is going to be disaster for crop producers, but the government can’t deprive people of wheat or any other crop for that matter. THE 2022-23 rabi marketing season is witnessing a sharp drop in wheat procurement by government agencies. This trend is being attributed to an estimated fall of five point seven per cent in crop production due to the early onset of summer; higher demand among private players for domestic and export purposes; and the inclination of some farmers to hold back a part of their produce in the hope of getting better prices. With wheat supplies from Ukraine and Russia — together accounting for about 29% of the global exports — hit hard by the ongoing war, India is going all out to fill the void. It seems to be a win-win situation for farmers as well as traders, though too good to last long. The hapless consumer has already started feeling the pinch, with the average price of wheat flour in retail markets reaching around Rs thirty three per kg, an increase of nearly thirteen per cent compared to the year-ago period. The prices of products made from wheat flour — bread, rusks and biscuits — are also shooting up. The farmers may be now thinking how they have incurred this damage on themselves by blindly opposing three farm laws which had been brought by Modi government. Now the farmers are in deep crisis and no Rakesh Tikait or no any leaders have come to their rescue. Ruling out curbs on exports, the government claims that it has ample stocks for the whole year to cover all beneficiaries under the National Food Security Act and the Pradhan Mantri Gareeb Kalyan Ann Yojana. This apparently comfortable position, however, is not helping to ease inflationary pressure on the food front, thereby pointing to lapses in the storage and distribution of the available stocks. The export overdrive may achieve short-term gains, but the government needs to reassess its domestic priorities to ensure that food prices don’t spin out of control. The worst-case scenario — being forced to import wheat — has to be averted at all costs. The decline in crop yield, triggered by climate change, may not be alarming as of now, but it’s a warning that things can worsen if farmers and policy-makers don’t do course correction. The long-term focus has to be on climate-resilient, sustainable wheat production and better management of stocks, catering not only to the ever-growing needs of the population — with minimal price fluctuations — but also raising the country’s global standing as an exporter of this staple crop. Of course, there is a fault on the part of government as it has failed to manage stocks available in the country. In India’s case, wheat export ban has created double menace. As India wants to export its crop and due to Russia and Ukraine have stopped wheat export, India would have got a good chance to provide large number of crop to world. But, in India, there is shortage of wheat and so government can’t take advantage of this favorite situation. If export will increase, India would have got advantage of increasing exports bill. Now all the plans will have to keep in  cold storage. This will cause heavy damage on the front of foreign exchange also. The trading deficit will also be truncated. The single decision of ban on wheat exports will lead to many ramifications. At once, India was dreaming to be supplier of grains to the entire world. But, now the plans must be differed for indefinite period.