Food, Farm Ministries Clash Over Wheat Exports.

Sharp differences between the key ministries over wheat exports came out in the open with food minister K V Thomas ruling out the decision firmly on the contention that it could boost prices at home at a time of high food inflation .

"We are against wheat exports. We feel that if we open exports, domestic prices will be affected," Thomas said on Monday.

"We need to be careful about our food security concerns and make provisions for it first."

Agriculture minister Sharad Pawar has been consistently batting for opening up exports in order to allow the farmer get a better price for his produce.

Indian wheat exports, traders estimate, are competitively priced at only $305/tonne (fob) currently in a tight world market. In the domestic market, the wheat prices have fallen below the minimum support price of 1170 a quintal set by the government.

India already has foodgrain stocks of over 44 million tonne and a bumper wheat crop is awaiting purchases.

The firm refusal to allow exports could end up forcing the wheat farmer to bring in his wheat for sale at mandis instead of withholding his produce in wait for exports.

Uncertainty over the contours of the food security law may also be behind the move to not allow exports yet.

Food secretary B C Gupta maintained pointedly that wheat or rice export was a decision likely to be taken only after taking stock of requirements for the food law.

Last week, food minister Thomas had rushed off to Uttar Pradesh with Food Corporation officials to urge the state government to ensure bigger mandi arrivals after reports of a drop in purchases from last year.

Wheat procurement is down 35% as of now from the corresponding levels last year despite estimates of a record 84.2 million tonne wheat crop for 2010-11

The Commission for Agricultural Costs and Prices (CACP) had also recently suggested to the government that it was necessary to open up exports so that wheat farmers could benefit from high global prices.

An empowered group of ministers (EGoM) was expected to take the wheat export decision but has now been put off for May 2.

Source : economictimes.indiatimes.com