|Posted : 03 Jan, 2016 22:37:31
Discouraging rice import to protect growers
The decision to hike regulatory duty on rice from the prevailing 10 per cent to 20 per cent is viewed by most observers as a thoughtful move -- though belated -- to protect local growers. This decision to double the regulatory duty on rice import by the National Board of Revenue (NBR) came following repeated appeals from various quarters including the media to put some form of restraint on importing rice so that the farmers get fair prices of their produce. However, lately it was in line with recommendations from the ministry of food that the decision got through.
There are obviously two strong arguments in favour of the decision. Protecting local farmers from falling rice prices due to excessive imports is indeed one that demanded attention. Coupled with it is the increased, almost bumper domestic production of rice. Although the country is now self-sufficient in rice cultivation with more than the required stocks to meet any unforeseen circumstances, the private sector has been importing rice, mostly coarse varieties, from neighboring India, due to cheap prices. According to the ministry of food data, the private sector imported around 15 million tonnes of rice in the fiscal year (FY), 2014-15 -- the highest since FY 2010-11. In the first six months of the ongoing fiscal too, imports are fast on the rise, much to the misery of the growers. The fallout was also adverse on the millers many of whom found rice milling unprofitable because of the cheap imports.
Increased food grains import, especially rice, amid successive good harvests, poses the all important question of how thoughtful the government was to allow it until the duty hike. Import of huge quantities of rice despite a significant stock of nearly one million tonnes, is difficult to reason out. In the light of the state of things, it seems that the bumper harvest of rice for successive seasons in almost all varieties of the staple has not left any impact on the country's food situation. Following the good Boro harvest, the upcoming Aman is also likely to experience good harvest. Expecting a bounteous Aman crop, the officials of food department have already expressed their concerns that they may not be able to sell out the stock in time to procure fresh rice.
Import of rice appears to negate the claim of self-reliance. However, this in reality is not the case; it is the farmers who are to bear the brunt of low prices in the domestic market. Food experts hold the view that the country's Aman and Aus output is potentially capable of curbing import of rice. But this has not happened as the government relied on the natural course of demand-supply situation by what most observers term unnecessary imports. The imported rice is of the low-end -- coarse variety -- and one rationale could be to stockpile this variety for consumption of the low-income groups. But under no circumstances should this add to the already pitiable state of the country's farmers. Since there is no other mechanism available with the government to intervene in the market, making imports a bit costly is the correct move, at least for the moment.