India self-sufficient in cereals; expected to halve oil imports: Ramesh Chand of NITI Aayog

In an interview with The Federal, NITI Aayog member Ramesh Chand weighs in on export bans, whether they are compatible with free trade and whether they would force countries to adopt inefficient import substitution strategies.

Ramesh Chand, member of NITI Aayog. Photo: Twitter

On May 13, India banned the export of wheat despite earlier claiming that 10 million tonnes would be exported this year compared to just over 7 million tonnes last year. The ban came even as the military conflict in Ukraine stifled Russian and Ukrainian wheat exports.

Earlier, on April 13, Indonesia banned the export of palm oil in all its forms – raw, refined and used – to stifle domestic prices which had doubled to $2 a litre.

In a Zoom interview, The Federal asked NITI Aayog member Ramesh Chand whether export bans were compatible with free trade and whether they would have a chilling effect and force countries to adopt ineffective import substitution strategies.

Sand in the wheels of international food trade does not affect India much because it is self-sufficient in grain, Chand said. He added that India depends on imports to meet around 7-8% of its pulse needs.

Only in the case of cooking oil is it vulnerable as India imports about two-thirds of the amount it needs.

Free trade is based on comparative advantage – that each country produces what it does best, maximizing consumer welfare, Chand pointed out. But if countries cannot depend on trade in crisis situations, they will have to take compensatory measures that may not be the most effective, he added.

Read also : Three reasons for India’s wheat shortage and ways to avoid future crises

Chand further said he had proposed that India isolate itself for 90% of its commodity needs. One hundred percent self-sufficiency would be expensive. For cooking oil, Chand said, India must strive to halve its dependence on imports, to around 35%. This could be achieved with high import duties, as happened when Rajiv Gandhi was Prime Minister. Import duties were then 85 per cent. High domestic prices have encouraged farmers to cultivate more areas, including irrigated land, in oilseeds. But when import duties were reduced, oilseed production declined, he said.

India’s heavy dependence on cooking oil imports is also due to oil consumption which has more than doubled over the past two decades, again driven by imports cheap oil, Chand said. He said reducing dependence on imports should be achieved through yield increases and technological breakthroughs.

When reminded that the government had not allowed the cultivation of genetically modified Dhara Mustard Hybrid 11 (DMH-11) despite a recommendation from the Genetic Engineering Evaluation Committee (GEAC) in May 2017, Chand said that consumers were sensitive to genetically modified foods. . He said he had read the DMH-11 article and was convinced that it was high-yielding, but people’s sensitivity could not be ignored.

Chand further said that the government took a middle course and approved guidelines for genome editing, where biosafety requirements were much less onerous when foreign genes were not involved.

Read also : From G7 nations to traders to farmers, India’s wheat export ban has pleased no one

As Chand has over 30 years of experience as an agricultural economics researcher, teacher, administrator and policy advisor, The Federal asked him a series of questions – from buffer storage standards to cash transfers instead of subsidized food grains for the poor.

He said high buffer stocks had helped India overcome the crisis created by the COVID pandemic. During the 2020 lockdown and restricted mobility thereafter, grain stored in government warehouses helped feed the poor who had lost their jobs and income. In 2019-20, an additional 103 lakh tons of cereals were distributed to the poor. The following year, another 119 lakh tons were distributed, noted NITI member Aayog.

Read also : Indian economy rebounded strongly despite COVID: US Treasury report

When asked if the buffer storage standards needed to be revised in light of the experience of the pandemic, he replied that they were reviewed every seven years and a review was due.

The pandemic has also shown that providing cash food subsidies is not a substitute for providing in-kind food aid. Markets in India are not uniformly efficient, he said. During the pandemic, supplies were stifled and people would not have been able to buy grain or sufficient quantities if they had received a cash food subsidy.

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