If the cereal grain is imported at low prices in non-harvest season, it will create a cheap stock impacting the upcoming harvest
The Centre plans to import maize for cattle and poultry feed and starch industries despite the country producing the cereal grain in record numbers for the past five years.
The Metals and Minerals Trading Corporation (MMTC) of India Ltd, Centre’s international trading enterprise, on February 13, 2019, issued a circular asking starch companies and animal feed producers for the quantity of maize they require.
“The government will only give a nod once it assesses all requirements and knows the import quantity,” says C Unnikrishnan, general manager, agro products, MMTC.
This is when the government has pegged kharif maize output for this year at a record high of 21.47 million tones, which is 1.23 million tonnes more than that of last year’s production (20.24 million tonnes). Further, this is 4.40 million tonnes more than the average production in the last five years.
Since the government wants to do this under Tariff Rate Quota for zero import duty, it’s possible that the import may occur during non-harvest season. And, this may crash the crop’s prices and impact production as the markets may still have a stock of cheap corn before harvest season.
The average market price of maize in January 2019 was Rs 1,768 per quintal, which is 40 per cent more than the international price of Rs 1,250 per quintal. This is when the domestic price was already 22 per cent higher than last year — Rs 1,447 per quintal in January 2018.
The minimum support price of maize has been fixed at Rs 1,700 per quintal. “When it’s time for farmers to get the MSP for their produce, the government has decided to import and generate a glut in the market,” says Devinder Sharma, an agriculture and trade policy analyst.
According to Federation of Indian Chambers of Commerce & Industry (FICCI), India’s maize prices are much higher than those in the international market.
“There is strong lobby of animal feed industries pushing for imports at lower-than-domestic prices,” says another MMTC official.
Since India has a policy to not import or domestically grow genetically modified food crops, its options for countries to get maize from are limited. “In such a situation, Europe which grows non-GM food crops, would be an option. There is possibility of importing corn from Ukraine or Russia,” says Ramandeep Singh Mann, a farmer leader.
Problems in production
Maize is primarily a kharif crop, the production of which is largely impacted by drought and fall armyworm attack. Karnataka, which is the largest producer of corn, was hit by both drought and worm attack and that led to the state producing much less corn.
Other states like Telangana and Maharashtra too were sailing in the same boat. Only Rajasthan and Bihar were able to minimise the shortage of production as they weren’t hit by the natural calamity or the pest as much.
According to the fourth advance estimates, the estimated production of maize in 2017-18 was 28.72 million tones and the target for 2018-19 was set at 27.3 million tonnes. The target was reduced because of expectant deficit rainfall and worm attack.
How was the past
India was traditionally an exporter of the crop till 2015-16. The export declined when the rising domestic prices couldn’t match the low international prices.
India was also importer of maize in the 1980s in the wake of rising demand from animal feed industries. In the ’90s, India became self sufficient and then began to export its produce in the 21st century. But in 2016-17, India again imported 0.1 million tonnes of maize and that gives way to a fear that the country may go back to how it was in the ’80s.
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