December 5, 2022

Great Indian Mutiny

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India: Bitter harvest for farmers after wheat export ban | Economy

The result of Exports should be banned To ensure domestic consumption, amid the rush of international prices due to the war It shocked foreigners and pushed up grain prices even more.

The decision angered Indian farmers and traders, who were denied a sudden fall as domestic prices fell.

India is the second largest producer of wheat in the world, but the government – the main buyer of wheat in the country – supported the ban, arguing that food security should be ensured for the people.

The move, coupled with a drop in world supply due to the Russo-Ukrainian war, pushed commodity markets in Chicago and Europe to record highs.

However, in Asia’s largest grain market, Khanna in the Indian state of Punjab, prices have fallen.

Every year, thousands of farmers come to this market to sell their produce. The place was made up of about ten large warehouses, each the size of a football field.

Before the export ban, 100 kg of wheat was worth Rs 2,300 (about US $ 30). Thereafter, the minimum price set by the government for the purchase of cereals fell to Rs. 2,015.

Millions of small farmers in India are living in extremely difficult conditions subject to variations in weather. In Punjab, many have already suffered production losses due to the severe heat wave that is hitting the region.

Faced with this situation, farmer Navtej Singh saved half of the 60-tonne yield and made it available for sale during off-season, when prices were high.

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Disappointed by the government’s decision, he is currently struggling to sell what he has left.

“The ban has come as a shock,” he told AFP. “The price has dropped to a minimum and has not even covered our costs. I can not wait a day,” he explains.

He said the officers acted selfishly, without consulting anyone.

“We have already suffered a loss of production this year and the embargo (on exports) has made life difficult for us,” he laments.

“Feed the World”

Prior to the war and heat wave in Ukraine, officials expected the country to increase wheat production (109 million tonnes by 2021) and exports (7 million tonnes) this year.

Last month, Prime Minister Narendra Modi offered to help offset the global wheat shortage, saying he was ready to “feed the world”.

But extreme weather conditions are becoming more frequent, which experts say is due to climate change.

After being hit by a heat wave, farmers in Punjab did not produce the expected amount and the national harvest was four million tonnes less than forecast.

Authorities have reduced the amount of purchases made for the vast public distribution system that provides grain at greatly reduced prices to about 800 million people due to the completion of support programs put in place during epidemics.

As a result, the retail price of wheat flour has risen to a 12-year high, as wheat prices to Indian traders have fallen.

Manish Panchi, head of the Punjab government’s grain distribution program in Kanna, supports the export ban. Without it, he argues, the price of a quintal of wheat would have been as high as 3,000 rupees.

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But according to trader Raj Suite, the government should have been more careful instead of abruptly halting exports and creating market chaos.

“The market was already tense due to the harvest crisis and without thinking about it, the government banned it,” he criticizes.

“There is no doubt that major exporters like Kargil, ITC and Glencore will suffer significant losses, but small traders and farmers will also be affected,” he laments.