Report on Political Economy of Rice Trade between India, Bangladesh, Nepal Released

There are economic and social factors associated with rice. The consumption of rice and the change in thereof, is an indicator of the change in the country fuelled by increase in per capita income, variation in individual preferences, and prices. In the social front, rice also has an emotive value based on cultural traditions and beliefs.  

Rise production has made a quantum leap in the region, mainly due to unprecedented economic progress and the advent of green revolution; this has tripled the food grain production, thus moving a step towards attaining self-sufficiency in production. In Bangladesh, India and Nepal, paddy production accounts for more than 50 percent of the total cereal production.  

In Bangladesh, India and Nepal (BIN), rice is the staple food for most of the population, and forms approximately 50 percent of the total cereal production, providing 30 percent of the total calorific requirement. While the BIN economies have a significant domestic production of rice, only India has a surplus, and Bangladesh and Nepal are dependent on imports to meet their domestic requirements. However, high agricultural tariffs in the BIN economies decrease the competitiveness of imports in the local markets. Three levels of analysis have been conducted in the study – (a) at the procurement stage in India, (b) at the export stage, and (c) at the consumption stage in Nepal and Bangladesh. The procurement analysis consists of factors such as input subsidies, domestic production and consumption, and the dynamics of price change in the Indian market; the export stage analyses the prevalence of tariff and non-tariff barriers that exist at the border points; and the consumption stage analyses the trend in consumption and the factors that drive exports from India in Nepal and Bangladesh.  

In view of the Regional perspective on rice trade in South Asia, Shri Aditya Pillai, Consultant, The Asia Foundation presented the pin pointed perspective and the Key highlights of the study was presented by Shri Afaq Hussain, Director BRIEF, who is co-author along with Riya Sinha  of the study also.  

BRIEF-Bureau of Research on Industry & Economic Fundamentals is an economic research organization with a focus on primary survey-based research in undertaking diagnostic studies, policy research, program implementation and of various schemes in the socio-economic areas. BRIEF’s past engagements have spanned areas from international trade to infrastructure to policy analysis with a focus on India and other developing countries. Over the years, BRIEF has been advising on developing inclusive and sustainable growth models for our clients. The organization also functions as a research partner to various academia and research institutions in carrying extensive research on contemporary issues. BRIEF has been undertaking research on several areas to progress India’s integration with the world economy with clients like The World Bank, NITI Aayog, FIEO, FICCI, SIDBI, Dun & Bradstreet, British High Commission, among others. 

BRIEF, an economic research organisation, organised the launch of its latest report on ‘The Political of Rice Trade between Bangladesh, India and Nepal,’ on 22^nd January 2019 at India International Centre, Lodhi Road, New Delhi. The report was released by Shri Sanjay Chadha, Additional Secretary, Ministry of Commerce, amidst other dignitaries. The study was supported by The Asia Foundation, New Delhi. The study, co-authored by Afaq Hussain and Riya Sinha, was conducted in 2018 with the objective of assessing the factors that play a role in the shifting trade patterns between the selected countries and achieving food security. 

Talking about the report, Mohammed Saqib, CEO, BRIEF, adds, “Very few items of trade trigger a large scale emotive and economic response as much as food grains do. Regional trade in food grains has the capacity for improving the bilateral and multilateral relations in South Asia, as well as the achievement of food security in order to contribute to the Sustainable Development Goal no. 2, realisation of zero hunger, of the United Nations. The first major step that can be taken is to undertake a product-specific redressal of challenges faced in procurement and in trade through border points. This report highlights the challenges faced in rice trade between India, Nepal and Bangladesh in domestic procurement and trade at border points, and suggests steps to be taken for redressal.” 

The study highlighted some of the challenges that exist in rice trade from India to Bangladesh and Nepal. Some of these include non uniform farming practices due to small land-holding resulting in inconsistency of paddy quality, infrastructural challenges at the border points, deterioration in quality of rice due to high waiting time at the border points, lack of transparency, traceability and accountability in the procurement and supply chain module between the various entities in the chain – farmers, millers, warehouses and the fair price shops are some of the challenges highlighted in the report. The report also suggested that rice may be considered as a semi perishable commodity while being exported due land borders in order to ensure faster cross over and reduce incidences of quality deterioration.