India: Cereals Export Ban

Lord Grimstone of Boscobel Excerpts

Thursday 19th May 2022 Lords Chamber

[The Lord Bishop of St Albans]

To ask Her Majesty’s Government what assessment they have made of the impact of the decision by the government of India to ban the export of cereals from that country on inflation and the cost of living in the United Kingdom.

[The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)]

My Lords, taken in isolation, the direct impacts on inflation and the cost of living in the United Kingdom will be negligible. The UK imports a very small amount of wheat from India; 88% of the wheat used in the UK is grown here. However, the UK is encouraging all countries to keep their global supply chains open to minimise the global pressure on food costs and, of course, to enhance global food security.

[The Lord Bishop of St Albans]

I thank the Minister for his reply. A few minutes ago, some of us in the Chamber were praying, “Give us this day our daily bread”. In the light of increasing wheat prices, we need not only to redouble our prayers but also to focus our political action. What discussions have Her Majesty’s Government had with the Government of India about their export ban on cereals? Perhaps even more urgently, what support are we giving the Government of Ukraine, who have huge surplus wheat stocks which they normally export, to develop land-based and river-based export channels to help them in their plight and to add to the worldwide supply of wheat?

[Lord Grimstone of Boscobel (Con)]

The right reverend Prelate makes good points. The cause of the Indian action is the current heatwave in India curtailing wheat production, which is expected to fall for the first time in some years. However, we have had dialogue with them and we are putting pressure on them, because it does no one any good if people shut down their borders in relation to food supply. As for the dire situation in Ukraine, if things return to normal—which we must all pray they do—food exports from there will of course then start again.

[Baroness Boycott (CB)]

My Lords, I completely agree with the Minister that the supplies from India do not make that much of an impact, but the right reverend Prelate’s question about Ukraine is incredibly important. It is not just the amount of grain stuck in silos around Mariupol and Odessa, but the new harvest which will be coming through on land that Ukrainian farmers can still get to. The World Health Organization and the UN World Food Programme say that the world’s coffers are already empty in terms of feeding struggling countries and that large-scale famines, the likes of which we have never seen, are expected. Is there any way the Government can start talking about an equivalent of humanitarian corridors to try to get out of Ukraine this food, which will otherwise end up being completely wasted?

[Lord Grimstone of Boscobel (Con)]

My Lords, we are indeed working with our G7 partners to bolster the global market and to secure the export of wheat and other grains from Ukraine through grain corridors. I am proud that over 50 WTO members have now supported us in committing to keeping food markets open, predictable and transparent.

[Lord Purvis of Tweed (LD)]

As we debated last night, the consequences of the war in Ukraine and the decisions of the Indian Government are felt not only here at home but in the lowest-income countries in the world. This is why the World Bank, the IMF and the World Food Programme, together, have put forward an overall package of support. The World Bank element of that is the International Development Association, from which, in February, unique among all donor countries, the UK cut its support by £1.5 billion—an astonishing 54% reduction. In the situation the world is now facing, why on earth did the Government do this?

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[Lord Grimstone of Boscobel (Con)]

That is an important point, and I will write to the noble Lord giving some background on it.

[Lord Bellingham (Con)]

Given this catastrophic situation of world food shortages, surely it is imperative that Russia is made to lift its vindictive and highly dangerous embargo of the port of Odessa. What can HMG and their colleagues in the EU and NATO do about this?

[Lord Grimstone of Boscobel (Con)]

My Lords, we had a good debate on these matters yesterday in the debate on the gracious Speech. We are all working very hard on this. However, noble Lords will appreciate that the scope for direct action on this is limited.

[Lord Berkeley (Lab)]

My Lords, the House knows that the Black Sea ports will be effectively closed to wheat exports for some time to come. I have come across a very interesting paper by the European Commission, working out how to get the wheat by land—as the right reverend Prelate said—to other ports on the west. Can the Minister get in touch with the European Commission, if he has not done so already, and try to collaborate with it so that we can all work together to get these cereals out in a westerly direction?

[Lord Grimstone of Boscobel (Con)]

My Lords, working together is obviously extremely important in a situation such as this. I will read the report to which the noble Lord refers and take it up.

[Lord Singh of Wimbledon (CB)]

My Lords, the situation regarding the export of wheat from India reminds me of the Bengal famine of the 1940s, when grain was being exported to Britain, thereby causing the famine. In these circumstances, with the heatwave and their diminishing supply, is it not totally wrong to expect, or put pressure on, the Indian Government to supply grain?

[Lord Grimstone of Boscobel (Con)]

My Lords, as I said earlier, only a very small amount indeed of Indian wheat comes to the UK. Indeed, the majority of production of wheat in India contributes to the domestic market. India produced 109 million tonnes of wheat last year, and of that no less than 90 million was consumed domestically.

[Lord McNicol of West Kilbride (Lab)]

My Lords, since the Russian invasion of Ukraine, the number of countries imposing export restrictions on food has climbed from three to 16. With Russia and Ukraine accounting for 29% of global wheat exports, cereal prices have jumped another 6% following India’s announcement. The Minister is right that the impact on the UK will be negligible, but this is on top of a cost of living crisis. What steps are Her Majesty’s Government taking to alleviate that crisis and to mitigate the current vulnerability of food shortages and food cost spikes?

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[Lord Grimstone of Boscobel (Con)]

My Lords, I think that following this Question we have an Urgent Question on food shortages, and that may be the opportunity to go more into the detail on that. Of course, the Government understand and deeply sympathise with the fact that the rising cost of living is making life harder for people. We should all be concerned about that, and we should all look for ways in which to ameliorate that.

[Baroness D'Souza (CB)]

My Lords, yesterday some of us received an excellent briefing from the UK’s ambassador to Kyiv, which said that one problem of using the rail network is that there is a different gauge between Ukraine and other NATO countries, particularly Poland. Might the Minister be in touch with Army logistics experts to see what mechanisms there might be to transport large amounts of grain that already exist, avoiding the mines placed by the Russians around Odessa, and to get that grain on to the market?

[Lord Grimstone of Boscobel (Con)]

My Lords, that is a good point, but I think that the House will appreciate that changing railway gauges is a complex process, which cannot be done in the short term. Let us hope that this conflict does not go on for so long that that becomes the solution.

[Lord Moylan (Con)]

My Lords, given concerns about the supply and cost of imported grain into the UK, why are Her Majesty’s Government maintaining tariffs on imported wheat averaging 16%?

[Lord Grimstone of Boscobel (Con)]

My Lords, my department has taken strong action in relation to this, either reducing or eliminating tariffs from Ukraine, which was obviously the right thing to do in the terrible situation facing the people of Ukraine.

[Lord Krebs (CB)]

My Lords, in light of the shortages of grain we have been hearing about in the last few minutes, do Her Majesty’s Government have a view on whether domestic production of grain should be increased and, if so, how the increase in domestic production should be reconciled with other commitments that the Government have made in relation to land use, such as protecting and enhancing biodiversity and sequestering carbon?

[Lord Grimstone of Boscobel (Con)]

My Lords, food security is, of course, immensely important, and no more important than at the present time. We are fortunate in this country in that we grow most of the wheat that we consume, and I am sure that the lessons that we should all learn from the need for resilience is to boost domestic production wherever possible.

[Lord Foulkes of Cumnock (Lab Co-op)]

My noble friend Lord Berkeley seemed to assume that we would not be able to get the grain out of Odessa and the other ports. I hope that that is not the case. I wonder whether discussions are taking place with the Ministry of Defence to see whether a way can be found to use those ports.

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[Lord Grimstone of Boscobel (Con)]

My Lords, I am sure that those discussions are continuing, but I think that the House will appreciate that we are deep in a conflict there and, when one is deep in conflict, those things are very hard to achieve, much though one might wish them to be achieved.