Government Removes Floor Price on Basmati Rice [Current Affairs]
In a significant policy shift, the Indian government has removed the $950 per tonne minimum export price (MEP) on basmati rice. This decision, made in response to falling domestic paddy prices and trade pressures, aims to enhance export opportunities and support farmers’ incomes. The Agricultural and Processed Food Products Export Development Authority (APEDA) will now oversee basmati rice exports without a floor price to ensure fair pricing and transparency.
Background
The MEP of $1,200 per metric ton (MT) was initially set in August 2023 to address rising domestic rice prices and prevent the misclassification of non-basmati rice as basmati. It was later reduced to $950 per MT in October 2023 following concerns from trade bodies that high prices were impeding exports.
Recent Developments
Commerce and Industry Minister Piyush Goyal announced that the removal of the floor price is expected to boost exports and improve farmers’ earnings. APEDA has been instructed to implement this change immediately and to monitor export contracts for realistic pricing.
Export Data
India’s basmati rice exports amounted to $4.8 billion in 2022-23 by value and 45.6 lakh tonnes by volume. This increased to $5.9 billion in 2023-24. APEDA remains responsible for registering export contracts and issuing the Registration-cum-Allocation Certificates (RCAC) as per the Foreign Trade Policy.
Source: currentaffairs by adda247
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