The union government has clarified that the export of broken rice has been banned due to control rising prices in the country, as the domestic industries dependent on broken rice was being badly hit. The clarification from the government came after some opposition leaders and media houses slammed the govt for the export ban, and demanded immediate rollback of the same.
On September 8th, the Ministry of Consumer Affairs and Food & Public Distribution changed the export policy of rice from “free” to “prohibited”, banning the export of broken rice. Along with that, an export duty of 20% was imposed on the export of non-Basmati rice. Following this decision, the opposition started to attack the govt by saying that the union govt is preventing the farmers from earning more by taking the benefit of higher international prices.
Haryana Congress leader Bhupinder Hooda called the move ‘anti-farmer’. He said, “Due to such decisions, farmers will not be able to benefit from the high prices of food grains in the international market arising out of the Russia-Ukraine war.” Similarly, TRS working president KT Rama Rao also targeted the union government over the decision, accusing the Modi govt of not having any long-term plan for the country’s food needs.
On 9th September, Telangana Today also published an oped saying that the ‘Ban on export of broken rice exposes Centre’s lack of vision’. The article by S Sandeep Kumar alleged that earlier the centre refused to buy paddy produced in Yasangi Season in Telangana saying more broken rice is obtained from Yasangi paddy, and now the centre has banned the export of broken rice due to rising international demand.
Quoting Indian Farmers Association Consortium Chief Advisor P Chengal Reddy, the article alleged that the decision to ban export of broken rice appears to be a politically motivated decision. It also claimed that there is no specific reasoning for the ban on exports of broken rice. The article on Telangana Today claimed that the centre could have bought rice from the state to sell in the international market, earning foreign exchange.
Amid such criticism, the ministry has issued a clarification and said that it is a misconception that farmers would have earned more due to higher international prices. The ministry said that the farmers have already sold their crop of paddy at MSP, and they are not getting any additional benefit from higher export prices. As traders and exporters have already bought paddy from the farmers, they benefit from higher prices by selling it in the international market, not the farmers.
“This decision has been taken as the Country has to serve its own people first before serving others,” the ministry. Explaining the reasoning for the ban on the export of broken and 20% export duty on non-Basmati rice, the ministry said that the policy has been changed to ensure adequate availability of broken rice for consumption by the domestic poultry industry and for other animal feedstock; and to produce ethanol for successful implementation of EBP (Ethanol Blending Programme) program.
As already explained while announcing the decision, the ministry reiterated that there has been a rise in global demand for broken rice due to the geo-political scenario which has impacted price movement of commodities including those related to animal feed. During the period April to August 2022, the export of broken rice increased by 4178% as compared to the corresponding period in 2019.
From FY 2018-19 to FY 2021-22, the export of total broken rice increased by 319%. The export of broken rice has increased by more than 43 times in the past 4 years (~21.31 Lakh Metric Tonne exported from April-August, 2022 compared to 0.41 LMT in the same period in 2018-19). During the period April to August 2022, the export share of Broken Rice increased to 22.78% as compared to the 1.34% corresponding period of 2019.
Due to an increase in global demand, the domestic price of broken rice, which was around ₹16/Kg in the open market has increased to about ₹22/Kg in States because of exports due to higher international prices. The ministry added that the Poultry sector and animal husbandry farmers were impacted the most due to the price hike of feed ingredients as about 60-65% of inputs cost for poultry feed comes from broken Rice. The surge in prices of feedstock will lead to an inflationary trend in poultry products like Milk, Egg, Meat etc, which will in turn contribute to food inflation.
Apart from use as feed, broken rice is also used to produce ethanol, and adequate availability of ethanol in the country is vital for the success of the Ethanol Blending Programme. As sugar-based feed stocks alone cannot meet the requirements of 1100 crore litres of ethanol for 20% ethanol blending by 2025. The Indian government has allowed the production of grain-based ethanol, and has also allowed the Food Corporation of India to sell rice to ethanol plants for fuel ethanol production.
However, in the current Ethanol Season Year 2021-22, against the contracted quantity of 36 crore litres, only about 16.36 crore litres (till 21.08.2022) have been supplied by distilleries due to low availability of broken rice for ethanol production.
Moreover, the government also said that some countries which have never imported broken rice from India have started to buy it, to further sell it in the international market to exploit the market situation, at the cost of Indian consumers.
Due to these reasons, the export of broken rice has been banned, and a 20% duty on the export of non-Basmati rice has been imposed. However, the ministry clarified that there is no ban or export duty on the export of Basmati Rice and Parboiled rice.
The ministry added that Parboiled Rice and Basmati Rice constitute around 55% of total rice export from India. So, the farmers will continue to get good remunerative prices and dependent/vulnerable countries will have adequate availability of parboiled rice as India has a significant share in the global rice export.
