March 11, 2024
📰 FEATURE STORY
Will the Bharat Rice scheme be effective?
Global food prices have come under pressure ever since the war in Ukraine broke out. Not to mention the effects of climate change on stock, particularly rice. India’s decision to ban rice exports last year due to erratic monsoons and the conflict laid bare the vulnerabilities of the global food trade system.
At home, the government was under pressure to ensure rice was available at an affordable price to the masses amid high inflation. Their latest move is to introduce Bharat Rice at a subsidised rate. While the timing is striking, considering it’s before the country goes to the polls, will the scheme actually work?
Context
The web of global food trade has always been vulnerable to factors like climate change, economic fluctuations, and geopolitical tensions. Recently, all of those have come to pass to create a perfect storm and send shockwaves through the global food market.
India is often called the world’s “rice bowl”. It’s a big player in the global rice market. Since the war broke out, India has taken a protectionist stance on rice exports. Last year, the government surprised many and banned rice exports. The main reasons were erratic monsoon conditions with excessive or low rainfall across different regions. The ban affected countries in Africa and the Middle East that depend on Indian rice. To fill the void, Thailand stepped up its rice exports.
India’s decision was in contrast to Prime Minister Modi’s assurances to US President Joe Biden in 2022 that India would be ready to ‘feed the world’ following supply shocks as Russia invaded Ukraine. The two warring countries were the biggest exporters of wheat. To make things worse, commodity prices were already at a 10-year high before the conflict.
In 2022-23, India produced 135 million tonnes of rice. That’s over 62 lakh tonnes more than the previous year. For 2023-24, it gets complicated. South Indian states, the highest rice consumers, have seen lower paddy production due to inadequate rainfall. Tamil Nadu and Karnataka may see a 30% and 25% decline in production, respectively.
Retail prices of rice have increased by 14.51% in the past year, per some estimates. Between November 2022 and 2023, the prices of some varieties increased by ₹10 per kg. To keep things in check, the government had asked retailers, wholesalers, traders, and millers to report stocks online for broken rice, non-basmati white rice, par-boiled rice, basmati rice, and paddy.
Then came the introduction of Bharat Rice, available at a subsidised rate of ₹29 per kg through the Food Corporation of India (FCI). Each kg of Bharat Rice will have 5% broken rice. The government hopes to sell 15 lakh tonnes of this under the Bharat brand and help ease the financial burden for the poor and lower-income population. How effective will it be?
VIEW: A way to score political points
It seems the government wants to feed into its poll strategy through the Bharat staples. It’s an excellent way to “carpet bomb” Bharat products, including the recently launched Bharat Rice, across assembly constituencies in the weeks before the election. While no doubt launched as a benevolent act, not everyone is convinced.
In Kerala, Civil Supplies Minister G.R. Anil alleged the move to launch and sell Bharat Rice violates the National Food Security Act that mandates the distribution of food grains through ration shops operated under the state governments. He questioned the government’s motive to sell subsidised rice outside the public distribution system.
The rollout of Bharat Rice hasn’t exactly gone to plan in Kerala, at least. The All Kerala Retail Ration Dealers’ Association said only a few people have received the rice. As far as farmers who produce Bharat Rice are concerned, there’s a gap between the production and distribution price. The National Agricultural Cooperative Marketing Federation of India (NAFED) buys it at ₹18.59, and the market price is only ₹29. The government needs to clarify the economics here.
COUNTERVIEW: An effective tool to help households
The government obviously recognises the cost of food and retail inflation and economic adversities. While some may see this as a purely populist measure to woo voters, it doesn’t need to be seen that way. The launch of Bharat Rice and other commodities under the Bharat brand are significant and necessary steps to tackle inflation and ensure people don’t break the bank to get the basics. Also, if this is a political move, so is the LDF government in Kerala’s K-rice for millions of ration card holders in the state.
Despite some of the government’s previous measures, like export restrictions, rice prices are still an issue. The Bharat initiative has worked out well so far. About 3.5 lakh tonnes of wheat flour and 20,000 tonnes of rice have been sold under the Bharat brand. The high prices are expected to decrease this month as Bharat rice continues to propagate and increase in sales combined with the arrival of the rabi crop.
In a broader sense, the Bharat Rice scheme has been well thought out. The rice is being sold through cooperatives to help keep prices down, and 5 lakh tonnes of rice from the FCI was offloaded for retail sale. To ensure maximum accessibility and reach, The government decided to make Bharat Rice available through e-commerce platforms too.
Reference Links:
- The Impacts of India’s Rice Export Ban and the Ukraine-Russia Conflict on Global Food Trade – Earth.org
- India’s rice production set to drop for the first time in 8 years: here’s why – Times of India
- India launches ‘Bharat rice’ at ₹29 per kg – CNBC TV-18
- Modi’s Bharat Rice or Pinarayi’s K-Rice: What will please Kerala’s political appetite? – India Today
- Grain with an eye on political gain? – Deccan Herald
- Explained: What are Bharat brand products? How do they fare in the market? – Forbes India
What is your opinion on this?
a) The Bharat Rice scheme won’t be effective.
b) The Bharat Rice scheme will be effective.
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