THE RECENT decision of the government of India to ban the export of all oils and oilseeds in order to arrest the spiraling prices needs to be reviewed, as it has included within its ambit several non edible oils like sesamum (sesame or til), coconut oil and oils from minor forest produce, which affect the livelihoods of lakhs of farmers in the country, especially as it has not been taken in consultation with the state governments who have to bear the brunt and the wrath of the farmers’ anger at sudden changes in macro policy which wreck their financial expectations.

 

The government of Kerala has asked for an exemption of coconut oil, MP and Chattisgarh for oils from minor forest produce, and West Bengal in the case of sesamum.  It is expected that the government of India will revoke these orders, but the uncertainty and the sudden dip in the market prices of these agri commodities for at least two to three weeks caused a panic among the producers, many of whom are reeling under the impact of price failure in the case of potato crop. The question, which the farmers should be raising, is: has the commerce ministry acted with the same alacrity to find export markets, as it has been to ban exports? Is it because governments are better at exercising fiscal and physical controls rather than undertaking promotional activities? Has the import of potato flakes been banned? Have countervailing duties on tomato paste and apple concentrate (that is being dumped by China) been applied within the tariffs permissible under the Agreement on Agriculture?  

 

The larger question is – Why are these decisions taken without consulting the stakeholders: in this case, the state governments, many of whom have been promoting these very oilseeds because over the last few years the government of India has been preaching the mantra of crop diversification, and the need to move away from the conventional rice-wheat-rice crop cycle? Considering that state governments are called by the agriculture ministry for discussions at least twice a month, it would have been appropriate if a feedback had been obtained from the states on the farmer’s viewpoint on these issues.

 

Even from the point of view of constitutional propriety, it has to be noted that agriculture is essentially a state subject, and the government of India has now encroached on the autonomy of the states in deciding their own policies on agriculture and food security by virtually controlling every aspect of agriculture – from research to supply of seeds, fertiliser, credit, price fixation through Commission for Agricultural Cost and prices (CACP), futures trading, commodity exchanges. Where then is the legitimate role for the states to make their point on issues impacting the livelihood of farmers? As a matter of fact, the crops that are ‘indigenous’ to the states are often ignored, and it is only the market driven crops: wheat, rice, onions, potatoes, oilseeds etc that get all the focus and attention.

 

Food security can, however, be built when farmers grow crops which will be consumed locally and should become part of the PDS system in the rural areas – for local purchase and consumption. Thus, if the states were to take up production programmes for mandua, bajra, jowar, raagi and keshari and focus on research, development and support prices, it will be possible to delink farmers’ incomes from nutrition security – because subsidies will be focussed and targeted. AgriMatters  strongly suggests that the PDS for rural areas , and the food grain component in National Rural Employment Guarantee Act (NREGA) and Mid Day meal schemes be built on coarser cereals, which will draw lesser water, enhance the factor of eco-friendliness, and be free from the negative impact of mono cropping. This will also imply those crops, which have a good export potential.

 

Reverting to the issue of the export bans, one has to remember that even when the ban is lifted over the next few days, the international buyers would have already started looking for alternate sources, and in much case will only order a certain percentage of these oils from India next year as the confidence in credibility of contracts made in the Indian market has been shaken. What this means is that we have done long term damage to our presence in the global agri markets as a result of a knee jerk response to inflationary pressures in the country, which emanate not from any fluctuations in the supply side of Indian agri commodities but on account of   global recession, the decline of the dollar and the deployment of sovereign wealth funds in FII and FDI sector which pushes up process of non renewable like steel, coal, cement and real estate.