A prohibition on wheat exports is a knee-jerk reaction.

India's wheat export ban is a knee jerk reaction, says ICRIER . The government could have offered a Rs 200-250quintal bonus on top of the MSP to improve wheat procurement .

With some minor exceptions for countries that have irrevocable letters of credit or where the Indian government is requested for food security purposes, this reaction is a knee jerk reaction.This comes as a shock.Prime Minister Narendra Modi told President Joe Biden in his inaugural address at the 2+2 ministerial meeting on April 11 that if the WTO allows India to export grains, it will begin exporting from the next day to feed the world.So what happened between April 11 and May 13?The only plausible explanation is that the revised estimates of wheat production are much lower than the predicted 111 mmt, and that wheat procurement is projected to reach 19 to 20 mmt by June end relative to more The wheat in April 22 is expected to be 9.59 percent (y-o-y) higher than the total cereal inflation rate of 5.96 percent.

It shows that India does not have a viable export strategy as it can change its position at the drop of a hat.Much more interestingly, it also reflects a deep-rooted consumer bias in India's trade practices.This consumer skepticism is what makes the farmer indirectly anti-farm.Why is it that the government is refusing to let farmers enjoy improved market conditions, even when 800 million people have been offered almost free food (rice and wheat) under NFSA and PMGKAY until September.Is the government trying to preserve the urban middle class at the expense of farmers?

It found that the imposition of stocking limits on traders, export restrictions, etc., acts as an implicit tax on farmers.All OECD countries, as well as other significant nations like China, Brazil, Indonesia, etc., give their farmers a net positive boost.However, India continues to implicitly tax its peasantry by way of market and export controls.The export ban also reflects a negative image on India.

Export bans would only worsen the situation.What could the government have done when wheat production and procurement are sluggish?Firstly, it could have offered a Rs 200-250quintal bonus on top of the MSP to improve wheat procurement.If a bonus is given, farmers who hold stocks may also like to give it to the government.That would make farmers proud and motivate them to increase their area under wheat in the next season.So, why was the government's PDS-based assistance system used to be free food until September 2022?If it wanted to offer more money, it could have offered meals so that customers could purchase any food from eggs to milk to pulses, which are more nutritious and where inflation is much lower.

Instead, the government chose the worse policy choice, namely an absolute ban on exports.It only highlights the hollowness of the governments' agri-trade policies and promises of doubling agricultural exports.In conclusion, it should be admitted that inflation is a global phenomenon today due to excess liquidity injected by central banks and global fiscal policies.India's wheat export ban won't be enough to tame inflation at home.

)The contributor is the chair professor for agriculture at ICRIER.Views are for example:...Sanchit Gupta is a researcher at ICRIER.