Govt should consider the option of exporting surplus wheat: Rangarajan

It has been suggested that the government considers the option of exporting surplus wheat to deal with the problem of storage, which is expected to pose problems in the near future. A Committee headed by PMEAC Chairman, C Rangarajan, has suggested that the government also consider the option of off loading the excess wheat through ration shops by increasing the entitlement under BPL and APL and sell some in the open market.

In a report submitted to the Prime Minister, the Rangarajan Committee has estimated that the subsidy cost of exporting two million tonnes of wheat shall be Rs 1,500 crore and that of offloading 13 million tonnes through ration shops shall be Rs 15,500 crore.

India has not exported wheat for the past six years. Export restrictions were removed in September last year but the country could only manage exports of 8.5 lakh tonnes of wheat. This is because Indian wheat faces stiff competition from Russia and Australia. In order to make wheat globally competitive, the government will have to provide subsidies to the farmers.

Currently, the wheat stock with the Food Corporation of India is close to 20 million tonnes. Additional 33-34 million tonnes is expected to come in by the end of this procurement season. The total storage capacity available with the government is 63 million tonnes whereas total procurement is expected to go up to 75 million tonnes.