No. 42, December 2006

No. 42
(December 2006):

Counter-Revolution in Military Affairs?

Wheat Imports – A Tool for Re-shaping India’s Agriculture

[An earlier draft of this piece was prepared in March 2006 by RUPE as a background note for a peasant organisation in Punjab. The following is an updated and expanded version.]

Since February 2006, the Government has booked, in all, 5.5 million tonnes of wheat imports at an estimated cost of $1.13 billion, or over Rs 5,000 crore. Further, private parties have reportedly booked an estimated 0.75 million tonnes in addition to the above. These are India’s largest cereals imports in the last three decades, and are equivalent to about nine per cent of domestic wheat production. India has suddenly emerged as the world’s second largest importer of wheat, after Egypt, and its purchases have had a tangible effect of increasing prices on the world market.

The Government’s alibi is its concern for the Indian consumer. Union Minister for Food and Agriculture Sharad Pawar declared: “As Agriculture Minister, I am not happy [to import wheat] but as the Food Minister, it is done to protect consumers’ interests and keep buffer stocks to face any eventuality”. And “The government cannot compromise on India’s food security”.1

This is false. As we shall see, the wheat imports are part of a broader policy which will further degrade India’s “food security” and serve the interests of foreign and domestic big capital:

1. India’s production of foodgrains is being allowed to stagnate. That is, production per head is falling. This will create a large market here for imports of foodgrains (particularly wheat) from multinational corporations of the US, Europe and Australia.

2. Step by step the Food Corporation of India is being dismantled; the system of minimum support prices (MSPs) is being surreptitiously scrapped; the warehousing system is being privatised; and multinational grain firms are being allowed a free hand to purchase directly from peasants (in the absence of any state intervention). These corporations, besides, will be allowed massive speculation in foodgrains, at the expense of Indian consumers.

3. More land is being diverted to horticultural crops for export or for the urban elite. With the entry of giant multinational retail firms like Wal-Mart and Indian corporations like Reliance, such crops will be produced increasingly by contract farming.

In this larger process, millions of Indian peasants – already in the throes of a profound agrarian crisis – would be displaced by imports, bankrupted and dispossessed of their land. At the same time the food security of the vast majority of people would be made the plaything of speculators and multinational corporations.

No doubt the area sown to wheat has increased as a consequence of the high prices reigning, and the 2007 wheat crop is likely to be larger than the 2006 crop. However, we show below that the wheat imports this year were not a chance occurrence or a passing phenomenon, but the outcome of policy. And so the longer-term direction is set.

We also show how the wheat imports are one aspect of the re-shaping of India’s agriculture – the sector which employs the majority of the country’s workforce – to imperialist requirements. It is in this frame that we examine the recent developments.

Since Aspects has repeatedly covered these issues in the past, there will be some repetition of points made earlier; this is unavoidable, and we ask our readers to bear with us.


1. Hindu, 23/5/06; Business Standard 3/6/06. (back)


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