Global Rice News

India’s Policies on Rice Exports Impacting Developing Nations

India prides itself on its role as a leader of the Global South, showing empathy for developing nations in contrast to the West and China. However, recent policies regarding rice exports are raising concerns about the impact on poorer countries.

The International Food Policy Research Institute has highlighted the repercussions of the ban on the export of non-basmati rice imposed by India. Of the 15 countries that imported over 100,000 metric tons of this type of rice from India in 2022, nine are in sub-Saharan Africa, including Kenya, Ivory Coast, Cameroon, Guinea, Madagascar, Benin, Angola, Mozambique, and Togo. The rising food prices are causing inflation across the region, with Nigeria experiencing inflation rates exceeding 25 percent and Ghana facing rates over 40 percent for several months.

However, restricting the export of food can lead to insecurity and instability instead. During the foodgrain crisis in 2007-08, 14 countries in Africa witnessed food riots. Furthermore, World Bank economists estimate that major food importers experienced a 3 to 5 percent increase in poverty rates, setting back the development of these countries by seven years. Persistently high prices are believed to have fueled the Arab Spring a few years later.

India is not alone in imposing such bans, restrictions, or export taxes. Other major exporters like Vietnam have also implemented similar measures. Bloomberg News has reported on countries such as Argentina, Pakistan, Turkey, and China taking similar actions.

Given India’s dominance in the rice market, it bears a greater responsibility than others. However, the Indian government, fearing voter backlash due to food inflation, has consistently favored controls over transparent support for domestic consumers. This approach was also observed in the wheat market last year, and restrictions on sugar exports have been implemented as well, despite India being the second-largest market player after Brazil. Sugar prices have reached their highest point in 12 years.

It is important to note that export bans adversely affect Indian farmers the most. They are denied the opportunity to sell their produce on the global market when prices are high. Indian leaders often defend their stance on agricultural subsidies at the World Trade Organization, citing the need to protect millions of subsistence farmers. However, these concerns seem to fade away when food prices rise and the government seeks to appease urban consumers.

India has made promises to be a different kind of great power, distinct from the US and China. It intends to avoid hypocritical behavior exhibited by Western nations and trade responsibly, unlike China. Recognizing that supply chains for essential commodities such as food and fuel must remain open and resilient, India aims to protect the world’s poorest.

These principles hold significant value and India should strive to fulfill its commitments. By adopting policies that align with its stated principles, India can become a true leader in the Global South.

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