Government Lifts Minimum Export Price on Basmati Rice, Raises Duties on Edible Oil: A Policy Shift to Boost Farmers’ Incomes
Government Lifts Minimum Export Price on Basmati Rice, Raises Duties on Edible Oil: A Policy Shift to Boost Farmers’ Incomes
The Union Government has recently introduced significant changes in the export and import policies related to agricultural commodities, aimed at supporting farmers and stabilizing the domestic market. In a major announcement, the Ministry of Commerce and Industry revealed that the minimum export price (MEP) threshold for basmati rice exports has been removed, while duties on refined edible oil have been significantly increased. These moves reflect the government's broader strategy to balance domestic food security with global trade demands.
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Removal of MEP for Basmati Rice: A Boost for Export Growth
On Saturday, the government removed the floor price of USD 950 per metric tonne (MT) for basmati rice exports, which had been in place as a safeguard measure since October 2023. Initially introduced in August 2023 at USD 1,200 per MT, the MEP was intended to curb the misclassification of non-basmati rice as basmati during exports and prevent price inflation within the domestic market. The decision to remove this threshold altogether comes after adequate domestic rice availability and a concerted push by trade bodies for more flexible export terms.
Edible Oil Duties Raised to Support Local Farmers
In another significant measure, the government announced a sharp increase in the import duty on refined edible oils, which has been raised to 32.5%. The total effective duty on edible oil, including other components, now stands at 27.5%, up from a previous 0%. This decision, highlighted by Minister of Agriculture Shivraj Singh Chouhan, is seen as a key effort to boost demand for domestically grown oilseeds such as mustard, sunflower, and groundnut.
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Implications for Farmers and the Agriculture Sector
The removal of export restrictions on basmati rice and onions, combined with increased protection for the domestic edible oil industry, underscores the government's pro-farmer agenda. With the growing global demand for Indian basmati rice and the push to bolster local production of edible oils, these policies are likely to lead to better incomes for farmers and greater employment opportunities in rural areas.
As the government continues to fine-tune its agricultural policies, the long-term impact of these measures on both the domestic and global markets will be closely watched. For now, the decision to lift restrictions and impose duties represents a careful balancing act between promoting exports and safeguarding local agriculture
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