Why in the News?

The government on 23^rd October, removed the Minimum Export Price (MEP) of $490 (Rs 41,193.25) per tonne on non-basmati white rice exports and reduced the export duty on paddy, brown rice and parboiled rice from 10% to nil, effective immediately, per official orders.

About Minimum Export Price (MEP)

• It is a price floor set by the Indian government for the export of certain goods, including non-basmati white rice.
• The purpose of MEP is to prevent the dumping of goods on the international market at artificially low prices.
• The likely impacts
  • Potential Positive Impacts
    • The removal of the MEP is expected to significantly boost exports of non-basmati white rice from India. This will increase the earnings of farmers and exporters.
    • Without the MEP, Indian exporters will be more competitive in the global market, allowing them to access new markets and expand their customer base.
    • Increased demand for non-basmati white rice due to exports is likely to lead to higher prices for farmers, improving their incomes.
  • Potential Negative Impacts
    • If the increase in exports leads to a shortage of non-basmati white rice in the domestic market, it could result in higher prices for consumers.
    • The global market for rice is subject to fluctuations in prices due to various factors, such as supply and demand, weather conditions, and geopolitical events. Lifting the MEP could make India more vulnerable to these fluctuations.