$6,193 mn loss, agri export ban hurting farmers

Neeraj Mohan

New Delhi, June 16

Despite a record-breaking harvest and a significant increase of nearly 14.1 million tonne in foodgrain production, farmers continue to face distress, thanks to the ban on the export of key agricultural commodities to contain inflation during the elections.

According to farmers, traders, food policy experts and other stakeholders, it is the ban on non-basmati rice, sugar and wheat that has led to 6.36 per cent decline in the country’s agricultural exports, bringing it to $25,016.05 million in 2023-24 from $26,717.72 million in 2022-23.

Sharp decline

• Non-basmati rice exports fell from $6,356 mn to $4,573 mn
• Sugar exports decreased from $5,770 mn to $2,824 mn
• Wheat exports plummeted from $1,520 mn to just $56 mn

Over the past three years, the export ban has resulted in a cumulative loss of $4,880 million, according to data from the Ministry of Commerce and Industry. The ban has resulted in the financial loss of $6,193 million to all stakeholders in the last fiscal alone.

Non-basmati rice exports fell sharply from $6,356 million to $4,573 million, while sugar exports decreased from $5,770 million to $2,824 million. Wheat exports, which faces a complete ban, plummeted from $1,520 million to just $56 million.

Rightful prices denied

The OECD report reveals that farmers suffered losses to the tune of $169 billion in 2022 alone. Continuing agrarian distress is the result of denial of rightful prices to farmers. —Devinder Sharma, Agri expert

The exports of cereals declined to $517 million from $1,194 million during the period, while castor oil trade slipped to $1,071 million from $1,265 million. Despite a condition of minimum export price of $950 a tonne on basmati, its export has increased from $3,537 million in 2021-22 to $4,787 million in 2022-23 and $5,843 million in 2023-24.

Monthly agriculture export reports indicate a further 6.79 per cent decline, with total agricultural exports dropping to Rs 22,470 crore from Rs 24,105 crore during the same period last year.

The total foodgrain production in FY2023 registered an increase of 14.1 million tonnes to 329.7 million tonnes. However, the agriculture sector is projected to grow by only 1.8 per cent in FY24 — a seven-year low — due to a poor kharif harvest and weak initial sowing of rabi crops, according to the data by the National Statistical Office (NSO).

Experts and traders stress a pro-farmer export policy is essential to address the issue of declining agricultural income. Although major political parties have promised to boost farmers’ earnings, none has emphasised the critical need to overhaul the export policy to effectively tackle the issue.