India imports wheat!

Sometime during April end, the Government decided to lift the ban on wheat imports into the country, and Sharad Pawar, the union agricultural minister, said he might allow private and public mill owners to import wheat.

The reason I put the heading in exclamation because I am one of those people who grew up listening all about the green revolution and self reliance in agriculture. Wasn't that the whole point of the green revolution, to produce enough to feed the entire country? So when I read this article about India allowing food grain imports again, I was pretty surprised, because I hadnt heard of it being done before. The first thought that came to mind was that isn't this a really politically sensitive subject? I am sure the 50% of the national work force that is employed in agriculture will have something to say about it, right? So with these questions, I scourged news sources and am trying to find out what the deal is, and what other people's opinions are.

I would say that for somebody as naive as me, the basic issue would be the issue of self-reliance versus the global economy. Global economy is built on international trade, and food grain is a part of that trade. With the green revolution, the buzz word was self reliance, meaning we don't have to look at anybody else to feed us now. So I suppose if we have to move with the times and be a true economic power, we must open our agricultural sector to competition and global best practices too. But then there is a flipside as well. How does one explain the billions and billions worth of dollars of subsidies that the United States and Europe provide to their farmers? I can't, except that it puts the millions of farmers in the less developed nations at a disadvantage, and thats exactly what is happening now.

So apparently the decision to import wheat has been taken to augment India's buffer stocks and the public distribution supplies. Ha, public distribution, that one shining example of India's failure to run efficient public services. I think i've already mentioned before of the crores and crores worth of food grain that is stolen from the system and sold on the open market. Its right in front of us, but for some reason I don't see no activist talk about and I dont see no newspaper write about it.

Another thought that came into my mind when I was thinking about it is this, during the times of the industrial revolution in England, the demand for workers, for fuel, for raw materials was great, and there was a great pressure on English agriculture to cope with the rising demand. While the industrial revolution made the English realize that the world was to be won with foreign trade, I think agriculture was still a domestic industry, with the main concern being protecting the livlihoods of the pheasants. Then the English government made the conscienscious decision to let agriculture sink, and focus on food imports. There was a big cry then, but in the end, I think it worked out to their advantage. And I think the same thing happened in the US. While these nations had half of their populations in agriculture at one time now only have a few, heavily subsidized millions working the farmlands.

Anyways, I will post this editorial from The Indian Express first and see what they are saying.

Cereals in basket case

Self-reliance does not mean that India meet its foodgrain needs by domestic cultivation

In terms of its comparative advantage, it makes sense for the country to import capital and resource intensive crops like cereals. If India imports wheat from countries like the US, Canada, Latin America and Australia by exporting high-value, labour-intensive commodities like vegetables, fruit, flowers and herbs, we will benefit due to gains from trade.

The world has changed from the cold war days when India needed to be self-reliant in the production of foodgrains and had to invest heavily in cereal production. Then, that strategy yielded beneficial results, but today this strategy has become a liability. It has become too expensive and inefficient for us to continue on the path of trying to promote cultivation of cereals through a plethora of subsidies on fertilisers, power, water and seeds, and then buying vast quantities of cereals at above-market prices to fill government granaries.

Over the next 30 years, as India grows, the need for land for industrial and urban uses will increase. There will therefore be increasing pressure on land. Also, as the road network, industrial parks and SEZs expand, marginal agricultural land will no longer be available for cultivation.

Today “food security” can be achieved without growing all the wheat and rice we need. On agricultural land, we need to turn to higher value crops by developing marketing, research, support and infrastructure for them. Import of agricultural products needs to be decanalised, allowing private traders to engage in trade and import of foodgrains.

The most difficult challenge will be for the government to remove the considerable subsidies being handed to farmers to produce cereals. Unless we do away with incentives for farmers to produce cereals, no serious move can be made to diversify cropping patterns. Today a new notion of food security and a new vision are required.
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Man has always opposed change. And in a nation as India, where millions of people have no job security, have that one job they have had for all their lives, any attempts to bring about a change in that situation will be met with resistance. This was the case with the Indian airports, where thousands of government employees went on strike because I believe they were aware that with their skillset (or lack of it), they wouldn't find such a meaty job cushion as this.

Govt plans new wheat import tender soon

India will issue a new wheat import tender shortly to replenish low government stocks and rein in spiralling prices, a top food ministry official said on Wednesday.

Earlier this month, Farm Minister Sharad Pawar said India would import 3 million tonnes of wheat in addition to 500,000 tonnes already contracted with Australian exporter AWB Ltd.The first consignment of 50,085 tonnes of wheat from Australia arrived in Chennai on Tuesday aboard the bulk carrier Furness Australia.

Government agencies have been trying to replenish depleted reserve stocks since the first week of April by buying newly harvested wheat in the main northern growing regions.But the effort has been hit by farmers holding back their produce in anticipation of prices rising higher. The official said the government has procured 8.5 million tonnes of wheat since April 1 out of a targetted 16 million tonnes.

D.P. Singh, president of the All India Grain Exporters Association, said the wheat was likely to be imported by a combination of state-run and private traders."The price spiral will be contained once imports come on private account," he said, adding that private imports would cap prices.Government agencies would use their imports to build up reserves. The first wheat shipment was contracted entirely by the State Trading Corp.

The food ministry official dismissed the need for contingency food planning because of the weather office forecast this week that the monsoon would be just below normal. India's wheat output this year could fall below the government's forecast of 73 million tonnes because of unusually hot weather in February and rains in March, traders said.India's annual demand is 70-72 million tonnes, and the government needs to maintain a large stockpile to rein in prices.
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So while our agriculture is mired in a weird mix of subsidies, price controls, state monopolies, I can't understand why India can't have a robust domestic agriculture sector that allows for private trading, including exim, futures (I think they have them already though), while cutting down on the subsidies. Plus our land reforms have been a mess, I havnt heard of any in the last many years, and as the population keeps growing, the farmlands are being further divided into smaller and smaller plots.

And ominously, the first batch of imported wheat is stuck at Chennai port because it is unfit for consumption. Expect delays and political opportunityism.

Controversy hits wheat import

The country's first wheat import in years is currently stuck in a Chennai port - the reason - it is not fit for human consumption. It contains pesticide and poisonous weeds. What is worse is the price paid for this wheat is around Rs 8,000 per tonne.The price is much higher than the procurement price for wheat to Indian farmers.

Import criticizedSerious questions are now being raised on how this unsafe wheat made its way into the country and whether the Australian wheat board has been favoured over other bidders including US and Ukraine.New Delhi has launched a damage control exercise after US ambassador David Mulford met the cabinet secretary and complained that its wheat was rejected unfairly.

So far the government claims there is nothing wrong with the wheat. It claims the wheat was ordered to stablise prices, but critics say there was no reason to give concessions, because there was no hurry to import.Weed threatBesides the pesticide content, there are fears that the consignment will introduce new weeds into the country - what are called invasive alien species. The consignment reportedly has 14 noxious weeds, of the 31 banned in India.

The weeds can cause fungal diseases in wheat plants. In 1970's when India imported wheat from US under the PL 480 scheme, Parthinium or Congress Grass an exotic weed slipped into the country. While the weed is yet to be eradicated from the country it caused respiratory diseases among millions of people and damaged soil fertility.