FM weighs in on export bans, says have to prioritise Indian consumers during crop shortages

India's headline retail inflation rate surged to 5.55 percent in November

Weighing in on the supply-side steps taken by the Centre, including export bans, Finance Minister Nirmala Sitharaman on December 12 said that Indian consumers have to be prioritised when there are crop shortages.

The Union finance minister, however, acknowledged concerns about farmers being denied better prices when export bans are in place.

"On uncertainty concerning banning and allowing of exports, you have a situation where farmers particularly those who grow onions are denied the opportunity to get a better price if exports are banned. I understand this concern, but if there are crop shortages, we will have to ensure Indian consumers are prioritised and therefore sometimes we have to come up with these measures," Sitharaman said during her response in the Lok Sabha on Supplementary Demands for Grants.

Sitharaman's comments came a few days after the government banned exports of onions till March 2024 to increase domestic availability and to keep prices in check. Apart from this, the Centre has taken a raft of measures over the last couple of years to bring down retail inflation, ranging from export bans on wheat, rice and other commodities including the sale of subsidised tomatoes to cool soaring prices.

India's headline retail inflation rate surged to 5.55 percent in November, according to data released by the Ministry of Statistics and Programme Implementation on December 12, thanks to the combination of an unfavourable base effect and rise in prices of key food items.

"We have certainly prioritised the interest of farmers and consumers. When prices go up, you need to have supply-side constraints removed and bring all goods to the market even if that means we have to purchase them AdHoc from some large growing areas to the market for consumers' sake. We are equally conscious if prices at which we procure from farmers is adequate or meeting their requirement," Sitharaman said.

Economic Affairs Secretary Ajay Seth on December 8 said that the government will continue to take supply-side measures as and when required to tame food prices.

Sitharaman added that for the government, It is always a question of balancing between interests of farmers and consumers, adding that "more often (the government is) inclined towards the farmers because we should not procure their goods lower than MSP. But for farm products that do not have MSP, the market decides the fair price and not the government."