The absurdity of restricting Basmati rice exports

Why is the UPA government helping Pakistani exporters at the cost of Indian farmers?

Imposing an export tax on rice was a bad idea; the Indian government should never have done it. It only hurts India’s rice farmers. (see these posts)

And in the international market for the high-end Basmati rice, the Indian rice tax gave a competitive edge…to Pakistani rice exporters.

The Indian government lifted the absurd export tax today. It also lowered, but still retained a floor price on Basmati exports. It is inexplicable why there should be an export restriction on a premium variety of rice. And it is unfathomable why the UPA government should think that hurting Indian exporters and lending a hand to Pakistani ones is somehow a wise thing to do.

The Other Vidarbha

When villagers are free to do what they want

Jaideep Hardikar of DNA reports something that P Sainath somehow manages not to (linkthanks Neelakantan). A village in Vidarbha that refused to take up the UPA government’s “debt relief” measures and…is doing rather well for itself.

The Girata SHG, to which he’s a mentor, is imitating his mode—farming and live stock management that reduces risks and shields them from volatilities. “We transport milk in autorickshaws to Washim, where we sell it,” informs Prakash. The dairy collective clocks a monthly income of Rs4 lakh with a net profit of Rs1 lakh, which is shared equally by its 20 members. That comes to a modest Rs5,000 a month-per head or Rs60,000 per annum, in addition to the returns from agriculture. Each member contributes Rs100 to the collective as his monthly saving. Thus the 20 members save Rs2,000 every month, or Rs24,000 annually.

A majority of the villagers are now linked to this activity. Now, the neighbouring 23 villages have decided to follow the model, with Girata as the epicenter. “We’ll increase our production, form a 23-village federation, and diversify into processing,” says Prakash. The collective that owns an autorickshaw, a tractor, and a deep-freezer now wants to buy a van with a chiller for better milk transportation. The SHG has also set up an outlet at Washim to sell milk to consumers. Two women’s collectives of the village have taken on the responsibility of keeping the financial records of the village dairy. [DNA]

Imagine the UPA government’s policy initiatives had focused on building good roads and reliable power supply instead of seeing the problem as one of “debt”.

The Girata initiative is an experiment—it’s too early to tell whether it will succeed. But what it shows is that people take the initiative to help themselves. Imagine the government stopped discouraging from doing so.

Related Links: Vidarbha whodunit; half-baked solutions; and Suvrat Kher’s post on groundwater management that was published in Pragati.

Pragati July 2008: A better connection with Israel

Issue 15 - Jun 2008
Issue Contents


“Adamant for drift, solid for fluidity”
India needs leadership and a renaissance in its foreign policy
Harsh V Pant

Business interests vs national interests
As Indian companies grow abroad
Sameer Wagle & Gaurav Sabnis

The myth of illiberal capitalism
Multi-polarity, democracy and what the US might do about them
Dhruva Jaishankar


A survey of think-tanks
The post-American world; Asian geopolitics
Vijay Vikram


The India-Israel imperative
Indo-Judeo commonalities: the symbolic and the substantive
Martin Sherman


Fruits of knowledge
Apply knowledge-economy processes for food security
Mukul G Asher & Amarendu Nandy

Needed: A new monsoon strategy
The focus should be on groundwater recharge
Tushaar Shah


Know your consumer?
A review of Rama Bijapurkar’s We are like that only
Aadisht Khanna

Read excerpts | Subscribe