THE Centre is unlikely to provide any worthwhile subsidy on wheat exports once the over-two-year-old ban is lifted even as speculation is rife that the country may extend doleouts for offloading its huge reserves to create storage space for fresh crops.
The government may instead enhance supply in the domestic market and pass on the benefit of huge stocks to people through its different schemes if it is to offload wheat at a subsidised rate in the international market. "We may not export it at a subsidised rate after the ban is lifted. If the global prices are lower and demand is less, we may sell it in the domestic market and raise allocation under different schemes to ensure that prices are kept in check," a senior government official said. "If we are to extend subsidy to exports why should we not provide the dole-out in the domestic market and benefit our own people," he argued.
The government did not lift the ban on wheat exports slapped in February 2007 even after building huge stocks as it played safe and did not want a repetition of the situation in 2006 and 2007 when India had to import a total of 73 lakh tonnes at higher prices to meet the domestic demand, according to him.
Earlier, the US department of agriculture (USDA) had said that India might need to extend an export subsidy as Indian wheat would otherwise be uncompetitive because of the high local support price of Rs 1,080 a quintal. "Lack of storage space may not be much of a problem as stocks can be transferred if necessary to other locations in the country where there is adequate space," the official said. "Only Haryana and Punjab may witness some storage problems but there would be space in other states."
Last month, food and agriculture minister Sharad Pawar had asked states to lift wheat from buffer stocks as about 136 lakh tonnes of the grain was still lying from the last year's procurement even as it was fully prepared to procure the grain from the new crop starting April. In 2008, the Food Corporation of India had procured a record 226.8 lakh tonnes of wheat.
The government had also told Parliament last month that the FCI had estimated that an additional capacity for 43.6 lakh tonnes was required in Punjab and 44.8 lakh tonnes in Haryana for storing wheat in the 2009-10 Rabi marketing season.
The government may instead enhance supply in the domestic market and pass on the benefit of huge stocks to people through its different schemes if it is to offload wheat at a subsidised rate in the international market. "We may not export it at a subsidised rate after the ban is lifted. If the global prices are lower and demand is less, we may sell it in the domestic market and raise allocation under different schemes to ensure that prices are kept in check," a senior government official said. "If we are to extend subsidy to exports why should we not provide the dole-out in the domestic market and benefit our own people," he argued.
The government did not lift the ban on wheat exports slapped in February 2007 even after building huge stocks as it played safe and did not want a repetition of the situation in 2006 and 2007 when India had to import a total of 73 lakh tonnes at higher prices to meet the domestic demand, according to him.
Earlier, the US department of agriculture (USDA) had said that India might need to extend an export subsidy as Indian wheat would otherwise be uncompetitive because of the high local support price of Rs 1,080 a quintal. "Lack of storage space may not be much of a problem as stocks can be transferred if necessary to other locations in the country where there is adequate space," the official said. "Only Haryana and Punjab may witness some storage problems but there would be space in other states."
Last month, food and agriculture minister Sharad Pawar had asked states to lift wheat from buffer stocks as about 136 lakh tonnes of the grain was still lying from the last year's procurement even as it was fully prepared to procure the grain from the new crop starting April. In 2008, the Food Corporation of India had procured a record 226.8 lakh tonnes of wheat.
The government had also told Parliament last month that the FCI had estimated that an additional capacity for 43.6 lakh tonnes was required in Punjab and 44.8 lakh tonnes in Haryana for storing wheat in the 2009-10 Rabi marketing season.
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