Ministerial panel to decide on export of wheat.

NEW DELHI: The empowered group of ministers (EGoM) headed by finance minister Pranab Mukherjee is likely to meet this week to decide upon export of wheat and enhanced distribution of foodgrain through the subsidized public distribution system.

The EGoM is likely to weigh in favour of exports as recommended by a panel headed by Prime Minister's Economic Advisory Council chief C Rangarajan. TOI had reported his advice to the PMO to export 3 million tonnes of wheat, 2 million tonnes through state agencies and 1 million tonne through private traders. He had also suggested that 10 million tonnes of foodgrain be distributed through the PDS system and another 1 million tonne be released in the open market.

The food ministry seems to be in agreement with the Rangarajan panel's recommendation. In an answer in Parliament on Monday, food minister K V Thomas said, "(The committee's) suggestions are being examined. Our department has fully supported the suggestions of C Rangarajan committee."

Rangarajan had pointed out that exports would entail a subsidy of Rs 1,500 crore because the international market rate of wheat was far below Indian prices. The prices are expected to further dip in the days to come as producer countries in the Black Sea belt bring their harvest to the market. A price differential upwards of $130 is expected to prevail by then between the Indian wheat prices and international rates.

With the government staring at a record 75 million tonnes of wheat in storage by beginning of June and monsoon clouds expected to hit Indian shores by then, the urgency of avoiding a crisis of plenty has gripped the government. But fears abound within sections of the government of the political implications of exporting grains against subsidy for feed in the international market.

The likely decision to distribute additional grains through the PDS is also expected not to yield good results with states unwilling to pick up ad-hoc additional grains in the short run. This was evident in the last attempt by the Centre to offload stocks consequent to a Supreme Court order. Additional ad-hoc allocations made up to March for 150 poorest districts amounted to 23.69 lakh tonnes but, of this, only 6.39 lakh tonnes was actually picked up by the states.

With the total number of beneficiaries under BPL category and the overall entitlement to them locked, the states do not pick up grains even when allocated on an ad-hoc basis. Allocations against additional APL quota too find few takers amongst the states with the price for the same being higher.

Source : timesofindia.indiatimes.com