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The Asia Foundation Announces New Report on Cross-Border Rice Trade in South Asia

New Delhi, January 31, 2019 — The Bureau of Research on Industry and Economic Fundamentals (BRIEF), supported by the Asia Foundation, launched a new report, The Political Economy of Rice Trade Between Bangladesh, India and Nepal, on January 22, at the India International Centre.

In Bangladesh, India and Nepal, rice is the staple food for most of the population and comprises approximately 50% of the total cereal production. While these economies boast significant domestic production of rice, only India produces a surplus, whereas Bangladesh and Nepal are dependent on imports to meet their domestic requirements. This report identifies key institutional practices of rice trade between India, Bangladesh and Nepal and examines political-economy motives that drive the rice trade.

At the launch event, Mohammed Saqib, CEO BRIEF, said: “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 2, the realization of zero hunger. 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 event was attended by Nandita Baruah, The Asia Foundation’s country representative in India; Afaq Hussain, the director of BRIEF; Vijay Setia, the president of the All India Rice Exporters Association; Sushil Choudhry, the president of the All India Rice Mills Association; A.K. Gupta, the director of the Basmati Export Development Foundation (BEDF) at India’s Agricultural and Processed Food Products Export and Development Authority (APEDA); and Syed Muazzem Ali, high commissioner of the Bangladesh High Commission in New Delhi.

Key findings discussed from the report:

  • Rice production and trade in the South Asia region are strongly influenced by climate change associated external shocks.
  • While the overall import and export of rice in South Asia is dependent on the amount of rice produced, India’s rice trade stabilizes the supply and demand in the greater South Asia region. Export barriers are imposed to mitigate the threat to food security in the region.
  • The study observed that in India, the Minimum Support Price (MSP), a mechanism used to ensure that farmers are compensated, has no correlation to export volumes.
  • Lack of infrastructure at land-customs stations and misinformation among farmers on international pesticide standards are key challenges that will reduce long-term export opportunities for rice, especially high value Basmati varieties.

Read the report here.

The Asia Foundation is a nonprofit international development organization committed to improving lives across a dynamic and developing Asia. Informed by six decades of experience and deep local expertise, our work across the region addresses five overarching goals—strengthen governance, empower women, expand economic opportunity, increase environmental resilience, and promote regional cooperation.

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Related locations: Bangladesh, India, Nepal
Related programs: Inclusive Economic Growth

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Eelynn Sim, Director, Strategy and Programs
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