Soaring food prices across the globe has turned the smuggling of foodgrain into a cash-rich industry. Food experts estimate that over two million tonnes of rice is being smuggled every year from India to Bangladesh. This, according to the current world price of rice — Rs 20,000 per tonne — is worth Rs 4,000 crore.
Much of the foodgrain being allocated to the northeastern states, Bihar and eastern UP under the public distribution system is finding its way into neighbouring countries, including Bangla-desh and Nepal.
Dr Pronab Sen, India’s chief statistician, confirms this. “Work done by the Washington-based International Food Policy Research Institute suggests that two million tonnes of rice has been finding its way into Bangladesh,” said this senior official of the department of statistics. This has set alarm bells ringing in the agriculture ministry, especially with rice production seeing a decline. Figures released by the agriculture ministry indicate that rice output has dropped from 13.2 million tones last year to an expected 12.6 million tones this year.
“Such a marginal drop cannot explain why rice prices have doubled in India. The only explanation is smuggling. From the 24 million tonnes of rice allocated for PDS, a sizeable amount is making its way to our rice-deficit neighbours,” said Dr Sen.
The stepping up of rice smuggling has forced the government to place a ban on all rice exports from April 1, 2008.
The Planning Commission’s food expert, Dr Abhijit Sen, admits that smuggling is difficult to control. “Part of the problem is a corrupt system, part of it is based on geographical reality. Bangladesh lost a sizeable part of its rice crop due to the cyclone last year, and is now importing rice from Thailand at Rs 24,000 per tonne and from the Philippines at $700 (Rs 28,000 approx.) per tonne,” said Dr Sen.
“With rice in India selling at Rs 12,000 per tonne, this becomes a lucrative industry, specially since the border with Bangladesh remains fairly porous. Nepal is also a food deficit state with whom we have an open border,” Dr Sen adds. West Bengal remains one of the largest rice-producing states in the country, but its contribution to PDS remains a tawdry one million. On the other hand, Dr Sen said, Andhra Pradesh’s contribution of rice crossed the six million tonne figure last year. “The PDS network has always been leaking. Most of the leakage takes place at the ration shop level, and this is something which needs to be controlled,” Dr Sen said.