In a move aimed at providing much-needed relief to Basmati farmers, the Central Government has reduced the Minimum Export Price (MEP) for Basmati from $1,200 per tonne to $950 per tonne. This reduction is expected to greatly benefit Basmati growers, ensuring better prices for their crops. In a Zoom meeting late on Monday evening, the Union Minister for Consumer Affairs, Food, and Public Distribution, Piyush Goyal, agreed to bring it down and asked exporters to export it above $950 per tonne. When the government initially decided to maintain the MEP at $1,200 per tonne, prices for Basmati 1509 and 1718 varieties dropped by ₹300 per quintal for both top-quality and slightly lower-quality grains. Farmers expressed deep disappointment with this decision, arguing that it undermines the interests of Basmati growers, particularly in Punjab. These farmers have been instrumental in Punjab's shift from water-intensive paddy crops to the shorter-duration Basmati variety. Last week, prices had already dropped by ₹500 to ₹600, but on Monday, Basmati prices began to recover. Prices, which had fallen to ₹3,100 per quintal, have now risen to ₹3,300 to ₹3,700 per quintal. The announcement from the government also brought relief to Basmati exporters. On August 25, the Centre imposed the MEP on Basmati rice, causing concern for exporters in Punjab and Haryana, the two major Basmati rice-exporting states. After numerous requests from exporters, Union Minister Piyush Goyal hinted at a lower MEP on September 25. However, on October 14, the Department of Food and Public Distribution, under the Ministry of Consumer Affairs and Food and Public Distribution, issued a circular stating that the registration-cum-allocation certificate for Basmati rice may continue beyond October 15 until further notice. In response, exporters temporarily stopped purchasing Basmati. They resumed buying the rice at lower rates when the Centre assured them of a review. It is important to note that the government does not purchase Basmati crops; instead, private traders and exporters handle the procurement. The high MEP had led to Indian exporters returning empty-handed from recent international food fairs, as international buyers turned to Pakistan. Exporters argued that the high MEP will further harm the industry. Vijay Setia, former president of the All India Rice Exporters Association, expressed appreciation for the government's decision: "The Government of India has announced relief for Basmati exporters. They will now be allowed to export above USD 950. The Exporters Association welcomes this government decision, as it will significantly improve the income of farmers and all other stakeholders, leading to improved export realizations." With 70 percent of Indian Basmati being exported within the price range of $700 to $1,200 per metric tonne, only 2-3 percent of the total Basmati rice produced in India is consumed domestically, with the majority intended for export. Ashok Sethi, Director of the Punjab Rice Millers Export Association, said that during a Zoom meeting held at 9:00 pm, the Union Minister assured to bring down the MEP to $950. He believes that this price adjustment will help manage exports and ensure better returns for farmers.
