Neither would an foreign trade ban lower inflation at home or meaningfully improve India’s foods security. In August, the government had twenty-eight million tonnes associated with rice in its warehouses (well above the mandated buffer stock of 11 tonnes), so we’re not really running out any time soon.
In the meantime, the agricultural economists Ashok Gulati and Ritika Juneja have got pointed out that inflation in India is mainly getting driven by the costs of fuel plus vegetables; rice costs accounted for than two per cent of the rise in the consumer price index last month.
Moreover, export bans are not just bad for other poor nations; they’re bad for India’s own farmers, that are missing out on high costs overseas. While authorities from New Delhi have often torpedoed consensus at worldwide summits in the name of protecting India’s millions of minor farmers, their activities when it comes to agricultural trade policy show that will they’re more worried about urban food costs, not farm earnings.
Farmers in India are familiar with an one-sided wager: They are exposed to drawback when global prices crater and don’t benefit when they increase, if the government obstructs exports.
FULL-SCALE RICE BAN MIGHT CAUSE CHAOS
Some of the sustained criticism India received following the wheat export ban seemed designed to avoid a repeat of the mistake with rice. If so, it may have had some effect. The government seems to be focusing for the moment on limiting exports of “100 percent broken” rice, the low-quality grade often used for animal feed and exported specifically to China.
In that case, the main influence would be on margins for Chinese pig farmers. This isn’t a negligible concern: Lower margins have already pressed many of them out of the company, causing China’s this halloween herd to shrink. That’s sent pork prices up simply by more than 20 percent, driving overall customer inflation in The far east to a two-year high.