Pawar, CACP favour opening up exports

India’s record foodgrains production in 2010-2011 has not only prompted the agriculture minister to pitch in for opening up exports, but the government’s main advisory body on pricing policy for farm goods, CACP, has also favoured allowing export of grains to prevent prices from falling below the minimum support price (MSP).

“There is a fear that with such bumper harvest of grains, which will further add on to the already existing stocks, prices of both wheat and rice can fall below MSP, hence CACP is in favour of opening up exports,” a key official said.

Senior officials from the Commission For Agricultural Costs and Prices (CACP) are believed to have also met Prime Minister Manmohan Singh with their suggestions on allowing grain exports.

India had banned export of wheat since 2007 as government procurement dropped because of low harvest. Exports of non-basmati rice were also banned thereafter.

Meanwhile, agriculture minister Sharad Pawar today reiterated that government should allow exports as production in 2010-2011 is expected to be at an all-time high. “Government of India has to take a serious thought on storage, allocation to states and exports,” Pawar said while releasing the latest foodgrain forecast for the current crop year to June.

Last month, Minister of State for Agriculture Arun Yadav had also indicated the government would lift the ban on exports. India’s foodgrain stocks as on March 1, 2011 is estimated to be around 46 million tonnes, of which around 28.72 million tonnes is rice and 17.15 million tonnes is wheat, much higher than the buffer stocks norms.

India’s food inflation eased to 9.50 per cent in the year to March 19. Trade sources said around 1-3 million tonnes of wheat could be easily exported and it won’t have any bearing on government’s food stocks and grain availability.