Centre unveils measures to tame food inflation, bans onion exports
The Centre on Friday unveiled a slew of measures as part of its efforts to tame rising food inflation and tide over the production problems arising out of climate change, in particular an active El Nino.
The measures were banning onion exports and permitting import of yellow peas duty free (both until March 31, 2024), releasing more wheat for sales in the open market, cutting stock limits, curbing supply of sugarcane juice or syrup for ethanol production and considering maize instead for the blending project.
Pre-LS poll moves?
The moves are crucial considering the fact that elections to the Lok Sabha are hardly 3-4 months away and prices of key essentials such as rice, wheat, atta (wheat flour), pulses and onion are rising sharply.
Data from the Consumer Affairs Ministry show that prices of rice, wheat, atta (wheat flour) have increased by over 30 per cent year-on-year and those of pulses, mainly urad (black matpe), tur (pigeon pea), moong (green gram), masur (lentils) doubling.
In the case of onion, prices are up over 28 per cent year-on-year and the Government fears that the production could be lower this year in view of a prolonged dry period in August and unseasonal rains now.
El Nino impact
Prices are surging on the back of agricultural production being affected due to the El Nino turning severe since October. Kharif foodgrain production has been estimated 4.6 per cent lower this year compared with last year’s 155.71 million tonnes. Sowing during the current rabi season is trailing, with the overall acreage slipping by 2.7 per cent.
In addition, with 43 per cent of the 713 districts from where data were received being rain deficient post-monsoon, at least 25 per cent of the country is facing drought (per US National Oceanic and Atmospheric Administration).
While permitting import of yellow peas duty-free, the Centre brought it under the “open” list to facilitate shipments. However, shippers will have to mandatorily register before importing.
Sops for maize growers?
On the wheat front, the Government has decided to increase the offerings at the weekly e-auctions conducted by the FCI to 4 lakh tonnes (lt) from 3 lt with immediate effect.
It further cut the wheat stock limit to 5 for retail outlets, including big chains, against 10 tonnes earlier. For traders, wholesalers and big chain retailers at depot level, it has been cut to 1,000 tonnes from 2,000 tonnes. For processors of atta and other flour products such sooji and maida, the maximum capacity has been trimmed to 70 per cent of monthly installed capacity of the mills.
While banning the use of sugarcane juice or syrup for ethanol production, the Centre on Friday said it was considering purchasing maize from growers from the next kharif season to supply to grain distilleries to produce ethanol. The scheme will be submitted to the Cabinet soon, Food Secretary Sanjeev Chopra said.
A trade expert said the decisions are a clear indication that the the National Democratic Alliance, led by the Bharatiya Janata Party, does not want to rest on the laurels of having won the elections to Assemblies in three key central Indian states – Madhya Pradesh, Rajasthan and Chhattisgarh – during the weekend.