MP Arora communicates with 3 Union Ministers: Seek abolishing of MEP on Basmati Rice enabling relief for farmers and industry

Ludhiana, September 7, 2024: MP (Rajya Sabha) from Ludhiana Sanjeev Arora has shot off letters to Union Minister of Commerce and Industry Piyush Goyal, Union Minister of Agriculture and Farmers' Welfare Shivraj Singh Chouhan and Minister of Consumer Affairs, Food and Public Distribution Pralhad Joshi, seeking their immediate consideration and intervention in abolishing Minimum Export Price (MEP) imposed on Basmati Rice.

Arora mentioned in his letters that the farmers of Punjab producing Basmati Rice are grappling with significant challenges affecting their livelihood and the overall agricultural economy. He added the situation warrants immediate consideration and intervention from the Ministries concerned in abolishing Minimum Export Price (MEP) imposed on Basmati Rice.

Raising the issue of low returns in mandis of the state, Arora mentioned that currently, the average price at which farmers are selling their Basmati rice in Mandis stands at Rs.2,500 per quintal. This represents a decline of Rs.1000 per quintal compared to the previous year. Such a dramatic drop in prices is leading to substantial financial losses for the farmers, who are already facing economic hardships due to lower yields.

Citing impact of minimum export price capping, Arora mentioned that the central government's capping of the Minimum Export Price (MEP) for Basmati rice at 950 USD per ton has also contributed to the financial strain on farmers. It is important to note that approximately 80% of India's Basmati rice exports are priced below 950 USD per ton bracket, while the higher-value exports constitute only about 20%. Consequently, the current capping limits the price at which a sizable portion of the Basmati rice can be sold, thus further diminishing the returns to farmers.

Arora making a request for immediate resolution to the issue, mentioned in his letters that given the compounded challenges of reduced yields on account of unpredictable weather and low market prices, along with the adverse impact of the MEP capping, he urged upon the Ministers to consider the certain measures. 

He suggested to abolish MEP to better reflect the market dynamics and support the farmers' income.

Suggesting support measures for farmers, he urged upon the Ministers to implement immediate financial assistance or subsidies to offset the losses incurred due to lower yields and prices.

For long-term agricultural support, he suggested to develop strategies to address the impacts of climate change on rice production, including investment in resilient crop varieties and sustainable farming practices.

Arora hoped that addressing these concerns promptly will not only support the struggling farmers but also contribute to the stability and growth of the rice industry, which is a vital component of India's agricultural & industrial economy.

Concluding, Arora mentioned in his letters that he hoped for a favourable resolution to the pressing issues.

Meanwhile, Arora said it was on August 25 last year when the Centre, giving a surprise to everyone, came out with an advisory to cap export price on basmati rice to US Dollar 1200 per tonne. He said this decision of the Centre was widely criticised by exporters. Exporters had urged upon the government to immediately withdraw the price cap and allow free trade. Finally, the Centre agreed to bring down the price cap to $950 per tonne. Exporters were totally dissatisfied with this decision too as they were against introducing a cap on export. They pointed out that basmati rice was being exported from the country for the past five decades without any price cap. Exporters of the country have a large overseas customer base in over 80 countries. Exporters have also sent their representations to all the concerned Ministers. 

Arora said he would keep on pressing upon the Union Government to find out a solution to the issue in the larger interest of producers and exporters of basmati rice.