Understanding curbs on rice exports

  • August 31, 2023
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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Understanding curbs on rice exports

Subject: Economy

Section: External Sector

Introduction

  • In an effort to stabilize domestic rice prices and ensure food security, the Indian government has introduced measures that restrict rice exports.

Rice Production Estimate

  • During the Rabi season of 2022-2023, rice production witnessed a decline of 13.8%, resulting in a total production of 158.95 lakh tonnes.
  • The Kharif sowing area expanded to cover 384.05 lakh hectares, although concerns arise about potential delays in Tamil Nadu due to a deficient southwest monsoon.
  • The looming possibility of El Niño introduces the potential for increased paddy prices, which have already risen from ₹27 to ₹33 per kg over the past year.

Rice Export Scenario

  • India stands as the dominant player in global rice exports, contributing a substantial 45% of the total market share.
  • Notably, exports during April-May 2023 have surged by a remarkable 21.1% year-on-year.
  • The Basmati rice segment experienced a 10.86% increase in exports for May, while non-Basmati rice also saw a substantial rise of 7.5%.
  • Remarkably, these export figures remained strong despite the imposition of a 20% duty on exports and the prohibition of broken rice exports since the previous September.

Impact on Indian Farmers

  • The government’s move to raise the Minimum Support Price (MSP) serves to provide a more favorable income for rice farmers.
  • Additionally, the curbs on exports work towards stabilizing domestic rice prices, assuring a sustained availability of this essential commodity.

Views of Exporters

  • Despite the implementation of a 20% export duty, Indian par-boiled rice retains its competitive edge in the global market.
  • Some rice-exporting nations, such as Indonesia, have shifted from being exporters to importers due to heightened international demand.
  • Exporters advocate for a more nuanced export classification that accommodates both common and specialty rice varieties.
  • They also recommend safeguarding unique rice strains recognized under Geographical Indication (GI) (12 in total) from market interventions.

Significance of Broken Rice

  • It is often used in the manufacture of feed for very young animals and for pets.
  • Further, it is used for all types of livestock and is particularly suitable due to its rich caloric value and low fiber content.
  • It is also used in the brewing industry, where it is mixed with barley and the production of arak (aniseed alcoholic drink, distilled, colorless drink).
  • It is a raw material for rice flour, used in baby food, breakfast cereals, rice wine, rice liqueur, sake, and prepackaged and canned foods.

Agricultural and Processed Food Products Export Development Authority (APEDA)

  • Established in December 1985 under the Agricultural and Processed Food Products Export Development Authority Act (APEDA Act, 1986), replacing the Processed Food Export Promotion Council (PFEPC).
  • Works under the Ministry of Commerce & Industry.
  • Functions assigned by the APEDA Act:
    • Develop industries for the export of scheduled products through financial assistance, surveys, joint ventures, and subsidies.
    • Register exporters of scheduled products.
    • Set standards and specifications for export products.
    • Inspect meat and meat products to ensure quality.
    • Improve packaging for scheduled products.
    • Promote export-oriented production and development of scheduled products.
    • Collect statistics from factories, establishments, etc.
    • Provide training in various aspects of related industries.

Monitored Products

APEDA oversees export promotion and development for a range of products, including:

  1. Fruits, Vegetables, and their Products
  2. Meat, Poultry, and their Products
  3. Dairy Products
  4. Confectionery, Biscuits, and Bakery Products
  5. Honey, Jaggery, and Sugar Products
  6. Cocoa and its Products, Chocolates
  7. Alcoholic and Non-Alcoholic Beverages
  8. Cereal and Cereal Products
  9. Groundnuts, Peanuts, and Walnuts
  10. Pickles, Papads, and Chutneys
  11. Guar Gum
  12. Floriculture and Floriculture Products
  13. Herbal and Medicinal Plants
  14. De-oiled Rice Bran, Green Pepper in Brine
  15. Cashew Nuts and Derivatives
  16. Basmati Rice
  17. Also monitors the import of sugar.

Additional Roles

  • Manages the National Accreditation Board (NAB) for certifying organic products under the National Programme for Organic Production (NPOP) standards.

Additional responsibilities for Cashew Kernels, Cashewnut Shell Liquid, and Cardanol were added as per DGFT Notification No. 6/2015-2020 (effective June 14, 2021).

economy Understanding curbs on rice exports