Go for the unthinkable; import wheat to curb food prices inflation
Agricultural economist Ashok Gulati says the government should import wheat, to signal plentiful domestic availability and dampen expectations. This is sound advice, and in the short term, India should also export the damaged wheat FCI procured this season to meet the world’s need for animal feed, which would release some grain being devoted to animal feed for human consumption.
For medium-term grain price stability, India should help African countries grow more grain locally, drawing on its Green Revolution expertise and the lessons on offer since then on the possible ill effects and preventing or remedying them. This would reduce the surprising dependence on imported grain of the world’s fastest-growing region in terms of population, and win India sizeable goodwill, besides stabilizing foodgrain prices.
India maintains decent stocks of rice and wheat, and some stocks of coarse grains and pulses, to guard against insecurity. But when the stock of any particular grain dips, even if it is above the buffer stocking norms, it gives policymakers the heebie-jeebies, and they take action to boost supplies.
The buffer stocking norm for rice as well as for wheat varies over the year, depending on how recently a harvest has happened of the particular grain and how far away that time of the year is from the next harvest. The opening stock of wheat in the central pool — this would exclude what different states might hold — in August has been 28 million tonnes.
This is above, but only just above, the buffer stocking norm of 27.8 million tonnes for July, counting both operational stocks and strategic reserves. Rice availability over the buffer stocking norm has been more liberal and yet the government has banned the export of
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