—By Charu Latha
Rice and wheat are the staple food crops in India. For about half of the world’s population, rice is the staple food. The food prices have been rising and reached their highest ever level in March 2022. The Russia-Ukraine war has pushed the cost of wheat to an all-time high level, as the two countries are the major exporters of wheat. The food importing countries are worried, but there is enough rice to compensate. But if the situation persists, the stockpile of rice may deplete. During the global financial crisis in 2008, one of the triggers was an export ban on rice imposed by Vietnam. Other exporting countries like India and China also followed suit creating more panic and increase in prices. Some countries imported the amount of rice that they import for an entire year and reserved it resulting in a drastic increase in prices. Rice prices doubled within days due to the panic of importing countries.
Rice is India’s largest crop accounting for 40 per cent of total food grains production in the country. According to the Ministry of Agriculture and Farmers Welfare, India’s rice production in 2021–22 was 127.9 million tonnes. India is the largest exporter of rice and exported 21.5 million tonnes in 2021. Rice exporters are limited compared to wheat. If the production output in India is low or if India imposes protectionist measures due to the shortfall of rice, there is a possibility of panic and crisis all over the world. The total area under kharif crops is more in 2022 than in 2021, for the same period from June-to mid July, but rice acreage is lower in 2022 than in 2021. Though there was a good amount of rainfall in June and July, some states especially the paddy-growing states from Uttar Pradesh to West Bengal had a comparatively lower rainfall.
Is there a rice crisis?
There is a possibility that the prices of rice could be next to shoot up but there is enough rice production as of now. There is a need to monitor and maintain prices. Even if the rainfall is low this season, there is a possibility of good rains and good acreage next season. Since rice is both a kharif and rabi crop, the loss in one season can be compensated in another season. Even if it does not compensate for the next season in the states mentioned, rice is produced in many states as compared to wheat which is produced only in a few states.
Rice is currently traded at $405 per ton and if any panic is to be avoided, the price should be maintained at this level. The governments can do a few things to keep the prices of rice at the present level. Firstly, the prices of rice are impacted by the prices of inputs like fertiliser and fuel. So, if the farmers are supported with subsidies from multilateral development banks, it will help farmers in dealing with high fertiliser and fuel prices. Secondly, the largest exporters of rice, especially India and Vietnam, should not impose any export restrictions on rice as such restrictions could create panic similar to the one in 2008. With the current stockpile with the government (47.2 million tonnes as of July 1, 2022) and minimum guaranteed production every season, it may not lead to a crisis very soon unless there are other external or internal factors apart from weather conditions that affect the production output.
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