EconSurvey
Invoke exports ban only under exceptional circumstances
This story was originally published at 19:46 IST on 22 July 2024
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NEW DELHI – The government should invoke export bans only under exceptional circumstances so that markets are allowed to function in the interests of farmers, the Economic Survey 2023-24 (Apr-Mar) tabled by Finance Minister Nirmala Sitharaman in Parliament today said.
"Such price stabilisation measures (export bans) aimed at consumers often conflict with income support policies for the farmers. Governments have no option but to do a delicate balancing act," according to the survey. The suggestions for this farmer-friendly policy framework come at a time when India has placed several export bans on key commodities such as sugar, wheat and non-basmati rice.
The survey gave an example suggesting how an absence of market intervention on the government's end may play out. "If sugar prices rise, consumers can consume less of it or switch to jaggery. It may even be a good thing for their health. In general, it is far easier for consumers to substitute or pare back consumption than for farmers to endure big losses because of ad hoc export bans or huge imports," it said.
The survey asked the government to allow farmers to benefit from higher international prices. It has cautioned that ban on food exports need to be telegraphed in advance, "lest hunger and famine elsewhere in the world worsen".
The survey has further suggested that the government carefully pick up commodities for derivatives trading, and ensures minimal intervention in this segment while also re-examining the inflation-targeting framework. End
Reported by Pallavi Singhal
Edited by Akul Nishant Akhoury
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