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LATEST NEWS UPDATES | EGoM on food urged to lift export curbs on all varieties of non-basmati rice by Amiti Sen

EGoM on food urged to lift export curbs on all varieties of non-basmati rice by Amiti Sen

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published Published on Feb 20, 2011   modified Modified on Feb 20, 2011
The commerce department has urged policymakers to lift export curbs on all varieties of non-basmati rice, which will ensure parity in the treatment of rice producers across the country.

Earlier this month, the government allowed export of 1.5 lakh tonnes of the premium varieties Sona Masoori, Ponni and Matta, all grown in the southern states of Kerala, Andhra Pradesh, Tamil Nadu and Karnataka.

The department has communicated to the empowered group of ministers on food that there should be no discrimination amongst producers and export of all varieties should be allowed, subject to a minimum export price, a commerce department official said.

Rice exports are subject to a minimum export price of $850 a tonne, which means rice of lower value cannot be sold overseas.

"When we are dictating the value above which exports should be allowed, there is no logic behind specifying varieties that should be exported," the official said.

In 2008, India, the world's second-largest producer of rice, banned export of the crop to check spiralling prices and ensure enough was available for the domestic market. The ban on basmati rice was subsequently lifted and the minimum export price brought down to $900 a tonne from $1,300.

Some rice exporters feel the decision to allow exports selectively is based more on political compulsions than economic reality.

"Some of the southern states that have been allowed to export non-basmati rice are facing elections. This decision looks more like a political one which can be damaging for the country," says Vijay Setia, president, All India Rice Exporters Association.

Setia said if the government allowed export of all rice varieties, subject to the MEP of $850 per tonne, a maximum of 5 lakh tonnes would be exported, which could be well supported by the available rice stock.

"We are not saying that we should be allowed to export the cheaper varieties. But why should farmers have to subsidise the rice consumed by the rich," he said.

Rice stocks at government warehouses have risen to 27.8 million tonnes in February, against a target of 11.8 million tonnes. The government, however, is watchful as food inflation is still high.

The commerce department, which had been trying to convince the group of ministers to allow exports of premium varieties of rice since December, will continue to push the issue. "We firmly believe that there should be equity amongst producers and would keep trying to persuade the EGoM," the official said.

The department also wants the quantitative ceiling to be removed as it leads to uncertainty and malpractices. It says the MEP could be pushed up whenever the government feels that exports are rising above the comfort mark.

The Economic Times, 21 February, 2011, http://economictimes.indiatimes.com/news/economy/foreign-trade/egom-on-food-urged-to-lift-export-curbs-on-all-varieties-of-non-basmati-rice/articleshow/7536595.c


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