 After witnessing steep inflation in costs of various essentials such as fuel, cooking oil, etc., India is now seeing a sharp rise in the cost of wheat. The Narendra Modi-led BGP government at the centre is facing a crisis the country has never faced before. Shortage of wheat, one of India's key staples. The cost of wheat has risen by about 13% as compared to last year. Just weeks ago the government had started increasing wheat exports to tap into the high prices of the grain caused by global wheat shortages which have been triggered by the Russia-Ukraine war. Now because of shortages within India, the government has banned the export of wheat to other countries. What has led to this situation? Extreme heat causes wheat output to dip by 6%. The unusual heat wave in March saw temperatures break 122-year-old records in India. This led to damage of standing wheat crop across northern India. Scientists evaluated that the full growth of wheat grains in the field was hampered and the grain became shriveled and underweight. The wheat crisis that the whole world is facing has affected India as well. While we first thought that it would not affect India very much because India is self-sufficient in wheat and therefore the global prices should not affect us, what we saw is that there was a bad rush for exporting the grain. But a couple of days back the central government has issued a ban on any further exports because of which we might have enough for consumption within the country. But we'll still have to see what it exactly means because of two reasons. Firstly, the production in India has gone down this year because of a heat wave. There's been a decline in yields. Secondly, although there is this ban on exports, they have said that the LCs that have already been agreed upon, the line credits, those would continue to stand. So we don't have the data on what that is and how much wheat is actually going to go out. In the first place, deciding to enter the market to sell wheat was I think a completely wrong decision because we don't have the wheat to sell. I mean that's the reality. We don't have enough wheat to sell in the international market. First and secondly, India is a marginal player in the global market for wheat. We are not a regular seller of wheat in the global wheat market by any means. So it just seemed opportunistic of the Modi government to try and sell whatever wheat it could get its hands on and that was obviously without any consideration to what would happen domestically. Because of that decision and so they have gone back on that decision because that was the rational thing to do. According to India's food secretary, Sudhanshu Pandey, the projected wheat output has been downgraded from the estimated 111 million tons to 105 million tons in the 2021-22 crop year. Last year, India produced 109 million tons of wheat. It is for the first time since 2014-15 that wheat output is expected to decline. This means that there will be a nearly 6% dip in wheat output this year compared with the estimated target and a 4% shortfall compared with last year. These are estimates as of end April. The actual position may be worse. In itself, this is not too much of a cause for worry as long as the dip remains of this order. But there is more bad news. Government procurement plummets by around 55%. Procurement of wheat by government agencies has sharply declined in the ongoing marketing season which continues till June. According to a report based on food ministry sources, it is estimated that wheat procurement will fall to a low of 19.5 million tons this year. This is a steep drop of about 55% compared with last year when 43.3 million tons of wheat was procured. Encouragement of exports also led to private traders buying up wheat from farmers. Farmers also held back wheat in hope of higher prices. Why is this fall in procurement a cause for worry? Government procurement of wheat and other agricultural produce is essential for ensuring food security in the country. The procurements made by the government are used in the public distribution system. Under the system, a network of fair price shops have been set up to ensure availability of food and certain other essentials at affordable prices to the people. This system also serves to regulate food prices in the open markets. Government procurement also forms the basis of the supply of grains to other welfare schemes such as the PM Garib Kalyan Anyojna under which 5 kilograms of free food grain is distributed to all eligible families. Because you took the decision to export wheat, what has happened is that private trade has cornered much of the surplus that is available in the market. And especially because the government hasn't procured, procurement of wheat has declined very sharply in this current season. So there is not going to be enough wheat to sustain the public distribution system as well as the package that the Modi government has been so loudly proclaiming. That it's going to subsidize Garib Kalyan Anyojna and so on those things. Those programs are going to be very badly hit. The last two years, with the impact of COVID, one has seen that there have been reduced incomes and employment is not back to the level it was before COVID. And in this context, various surveys show that the food security of households have been affected. With many poor households reporting that they are consuming less food than they were pre-pandemic and particularly consuming less quantity of more expensive items such as edible oils, pulses which is the main source of protein in the Indian diets because people cannot even in normal times afford animal protein, milk, meat and so on very much. So that is the other cause for concern that with these rising prices that people's diets would get affected even more. Now that exports have been banned, the held over wheat bought at higher prices by traders will hit the open market and raise prices of wheat. Farmers will also get affected of the procurement target of 19.5 million tons this year about 17.5 million tons has already been procured. The Indian government buys wheat from farmers at fixed prices which are announced before the crop season and are meant to compensate the farmers for the cost of production. But this procurement will close in June and subsequently farmers will have to sell the wheat at whatever price they get from traders. What can the Indian government do now to arrest this crisis? In this context there are a number of things that the government can do and some of these are short term but I think this should also be seen as again an opportunity to think long term to avoid further future situations of this kind of crisis. In the immediate term what the government can and should do is to continue providing support in the form of free grains and subsidized grains that it does to a large section of the population through the public distribution system. In fact to expand this distribution of free grains to include not just wheat and rice like it does currently but to add on pulses to add on edible oils and to add on also millets and coarsed cereals so that they make up for the shortage that we have in wheat. And also to expand the coverage to include migrant workers to include a large number of other people who are currently not included in the public distribution system because of documentation requirements because government not renewing the lists of beneficiaries and so on. Going ahead in the long term I think also that the country needs to plan towards regaining our self-sufficiency in the production of all the main food crops. For instance pulses and edible oils, India used to be self-sufficient in the 90s but currently we are hugely dependent on imports for these two commodities. So we need to have various systems and policies in place to ensure that the production of oil and pulses happens within the country so that we are not affected by this kind of volatility in prices that you see globally.