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Wheat policy hits farmers hard
The Government of India decided to scrap the import duty on wheat. The import duty, which was 25 percent till September 2016, was earlier reduced to mere 10 percent.
The Government of India decided to scrap the import duty on wheat. The import duty, which was 25 percent till September 2016, was earlier reduced to mere 10 percent. Now, it has been slashed to zero percent thus allowing foreign wheat to flood Indian markets even though the country is the world's second-biggest wheat producer.
The cut is likely to help private traders such as Cargill, Louis Dreyfus and Glencore increase their imports at the expense of Indian peasants. This is counterproductive to government's 'Make in India' initiative. The abject surrender to the World Trade Organisation (WTO) regime and the interests of advance nations that dump their highly-subsidised agri-produce into the global market would erode the livelihoods of millions of Indian farmers.
If this policy regime is extended to other agricultural commodities, it would prove to be a death knell to Indian agriculture. Importing agriculture is importing unemployment in India as it still sustains the livelihood of 52 percent of Indians. The demonetisation has already hit the agricultural commercial operations hard. Now the indiscriminate import liberalisation would further harm this vital sector.
In fact, India has adequate buffer stocks of wheat. The wheat farmers are not getting remunerative price. The entry of cheap foreign wheat would break the backbone of wheat farmer. The government's zero import policy would result in dumping wheat from the Untied States, Australia, France, Russia and Ukraine that too just before the domestic winter crop arrives in the market. There are no indications that wheat production will be down in the ongoing season. Indians are well aware of the havoc played by cheap Chinese goods.
The minimum support price (MSP) announced for wheat is at Rs 16,250. But, wheat from Ukraine is available at Rs 13,297 per tonne. Indian farmer would simply be vanished from the market. The global wheat prices are expected to fall further while the MSP does not meet the cost of production for the domestic farmer. Rise in domestic prices cannot justify such a move as there is a need to ensure income security for the farmer along with food security for the consumer.
