Vol. XL No. 51 December 18, 2016

Zero Import Duty on Wheat: Direct Assault on Farmers’ Interests

THE All India Kisan Sabha, in a statement issued on December 10 has condemned the decision of the Narendra Modi led BJP government to scrap the import duty on wheat. The import duty which was 25 percent till September 2016 was reduced to 10 percent. This was, on December 8, totally done away with. The move is aimed to allow corporate companies and big traders of wheat to profiteer at the expense of farmers and is according to the diktats of the WTO and countries like the USA. AIKS demands immediate withdrawal of this move. The government must instead make preparations on a war-footing to procure the wheat grown by farmers facing great adversities at remunerative prices with incentives over and above the minimum support prices (MSP).

The government move comes despite the country having adequate buffer stocks and will rob Indian farmers of even the meagre earnings from cultivation of wheat. The government had preceded this move by announcing the MSP of wheat of Rs 1,625 per quintal by mechanically adding merely Rs 100 per quintal although the costs of production are rising. In many states, the cost of production is much higher than the MSP announced. In the wake of the crisis created by the Narendra Modi-led BJP government due to the demonetisation move, farmers are already being forced to make distress sales and they are not getting even Rs 1,200 per quintal for paddy. In some places they are getting as low as Rs 800-900 per quintal while the MSP is Rs 1,510 per quintal. This and lack of working capital for Rabi season due to demonetisation has also adversely affected sowing of wheat. The government has failed to procure wheat at MSP and refuse to open purchasing centres which leads to distress sales. It is now opening the gates just ahead of the winter wheat crop to help agri-businesses to rake in super profits by dumping wheat from USA, Australia, France, Russia, Ukraine and other countries which have had bumper wheat harvests. It is estimated that overseas purchase would be the highest in a decade. Cargill, ITC, Adani-Wilmar, Reliance and such groups are likely to be the biggest beneficiaries of this move. 

The move will have a catastrophic effect on Indian farmers given the fact that global wheat prices are seeing a decline. The big players in the wheat flour market had been demanding withdrawal of import duties and this move is to suit their interests. Wheat traders are expecting imports to cross five million tonnes this year. The wheat contracted from Ukraine is ranging from $ 197-212 a tonne ie, between Rs 13,297 to Rs 14,310 per tonne. This will be far below even the MSP which will be Rs 16,250 per tonne. This will lead to a further crash in prices as the incompetent government has no effective procurement plans.  Given that due to the Modi-made demonetisation crisis the farmers are already forced to make distress sale, this move will destroy the livelihoods of wheat farmers irreparably. 

AIKS calls upon all its units to rise in protest against this retrograde move by uniting broadest sections of the society.