Govt scraps import duty on wheat

Vibha Sharma

Tribune News Service

New Delhi, December 6

India today scrapped altogether the 10 per cent import duty on wheat, a move that has raised doubts about the Agriculture Ministry’s production estimates and evoked sharp reactions from farm bodies and Opposition parties. A zero per cent duty on imports, they claim, was not only “counterproductive” to the interests of farmers, but also reeked of “ulterior motives of catering to the interests of international traders”.

The notification, tabled by the Finance Ministry in Parliament, said the cut was to be effective immediately and with no end date.

Significantly, the decision has come after reports of local wheat prices hitting a record high last month amid apprehensions of production in the past two years falling well below the peak of 2014 and stocks almost at the lowest in the past few years.

Ajay Jakhar of farmer forum Bharat Krishak Samaj dubs the move “absolutely wrong” and one “giving wrong signal about the country’s foodgrain situation”.

“The government has time and again declared that despite demonetisation, the sowing has been more than that last year… Farmers, especially in wheat-growing states of Punjab and Haryana, are bound to suffer while international firms will make a killing.

“Imports are also counterproductive to the Prime Minister’s ‘Make in India’ campaign and his efforts to double the farm income,” he says.

Agriculture expert Sudhir Panwar too says the move will lift overseas purchases. “Producers of premium wheat will suffer more than those selling wheat at MSP. Private operators will be able to buy international premium produce at cheaper rates,” he adds.

Reports say after the government lowered wheat import duty from 25 per cent to 10 per cent in September, private importers purchased about 5 lakh tonne of wheat, mostly from Australia. The latest move, too, is expected to help private traders increase purchases, perhaps from the US, which, Jakhar says, has seen a record production of corn and wheat this year.

But officials say the step is to circumvent any further rise in wheat prices. “The government could not have afforded another controversy, especially post-demonetisation. It wants to keep inflation under control ahead of the crucial elections in Uttar Pradesh and Punjab. There are also concerns about the productivity and quality factors of the rabi crops in view of IMD’s forecast of warmer winter,” they say.

The Opposition parties claim the step is a “double whammy for farmers already hit by demonetisation”.

Rajya Sabha MP Viplove Thakur (Congress) says: “Farmers are still reeling under the aftershocks of demonetisation. They had been complaining how note ban made it tough for them to buy seed and fertilisers and now comes this latest setback.”

The government, the critics say, has been progressively reducing import duty on wheat, which falsifies the Agriculture Ministry’s wheat production estimate of 93-94 million tonne. The production a year ago stood at 86.53 million tonne.