India Removes Export Price Limits on Basmati Rice and Onions to Help Farmers
The Indian government has announced the removal of the minimum export price (MEP) for basmati rice. This decision, made by the Ministry of Commerce and Industry, aims to boost farmers’ incomes by allowing the export of this premier GI-tagged variety from India. The Agricultural and Processed Food Products Export Development Authority (APEDA) will monitor export contracts to ensure fair pricing and transparency.
In August 2023, a floor price of USD 1,200 per metric tonne (MT) was set for basmati rice exports due to tight domestic supply and rising prices. This measure also aimed to prevent the misclassification of non-basmati rice as basmati. However, the government reduced the floor price to USD 950 per MT in October 2023 after feedback from trade bodies and stakeholders.
In another move to support farmers, Minister of Agriculture and Farmers Welfare, Shivraj Singh Chouhan, announced an increase in the basic duty on refined oil to 32.5%. This is expected to boost demand for mustard, sunflower, and groundnut crops, providing better prices for farmers and increasing employment opportunities in rural areas. The import duty on edible oils was also raised from 0% to 20%, with a total effective duty of 27.5%.
Additionally, the government removed the MEP on onions, following expectations of a strong kharif crop and favorable monsoon. Previously, the export prohibition on onions was lifted on May 4, allowing exports with an MEP of USD 550 per tonne and a 40% export duty. These restrictions were removed on Friday, benefiting farmers by allowing onion exports.
Doubts Revealed
Export Price Limits -: These are rules that set the lowest price at which goods can be sold to other countries. Removing these limits means farmers can sell their products at any price.
Basmati Rice -: Basmati rice is a special type of long-grain rice that is very popular for its unique aroma and flavor. It is mainly grown in India and Pakistan.
Domestic Rice Availability -: This means the amount of rice that is available within India for people to eat. If there is enough rice in the country, the government can allow more to be sold to other countries.
Basic Duty -: This is a tax that the government charges on goods that are imported into the country. Raising this tax makes imported goods more expensive, encouraging people to buy locally grown crops.
Refined Oil -: Refined oil is cooking oil that has been processed to remove impurities. Examples include mustard oil, sunflower oil, and groundnut oil.
Mustard, Sunflower, and Groundnut Crops -: These are types of plants that produce seeds used to make cooking oils. Mustard seeds, sunflower seeds, and groundnuts (peanuts) are common in Indian agriculture.
Export Price Limit on Onions -: This was a rule that set the lowest price at which onions could be sold to other countries. Lifting this limit means farmers can sell onions at any price, which can help them earn more money.
Agricultural Exports -: These are products grown on farms in India that are sold to other countries. Increasing these exports can help farmers earn more money.