Centre should look for other options as there is a mismatch between foodgrain procurement and storage capacity.
A couple of photographs told the story of India’s food mismanagement.No words were needed. Mounds of sacks full of rotting foodgrains being ploughed by some labourrers in the hope, that they find some quantity still eatable splashed newspapers this month. Another photograph had the same story but this time lying in pool of water. Not shocked, Union ministry of consumer affairs and public distribution wanted to question the authenticity of the photographs.
“Why is no one saying that those photographs were taken three years ago,” quipped a senior official of the ministry.
With wheat productions alone set to cross 90 million tonnes this year, the government is caught in a dark tunnel. There are two options for the government; one to let the grains go to the hungry mouths, and secondly export them. The choice is not that easy. First option would entail much higher subsidy burden, while the second would still need export subsidy but the government can recover part of the cost of procuring the foodgrains.
The ministry rushed to the Prime Minister’s Office with a proposal to release 17 million tonnes of wheat through the PDS for people under the Below Poverty Line (BPL) and Above Poverty Line (APL) categories. The government bent with subsidy burden constituted a committee under C Rangarajan to look into the issue of “Food Management”, while tasking it to look into the ministry proposal.
In one week’s time the committee submitted its recommendations. Release 10.5 million tonnes of wheat through PDS and export two million tonnes. Total subsidy liability would be Rs 17,000 crore.
“Export is not a wothwhile option, as there are hardly any buyer. International price is low. India has been able to export to only a handful of countries, including Bangladesh, Taiwan and some African countries. Unless export is substantially subsidiesd, there will be no buyers in the international market,” said a senior official of the Food ministry. In fact, ban on export of wheat was lifted in September 2011 but in all only eight lakh tonnes of grain could be exported till date. This sums up the export option story.
Against the likely government procurement of 90 million tonnes of wheat this year, the storage capacity available by all means is of 62 million tonnes only. The piecemeal approach of getting rid of 10.5 million tonnes of wheat, as suggested by the Rangarajan committee, is clearly not in lines with the sound principles of “management”.
“The storage capacity, Covered and Cover and Plinth (CAP) available with the Food Corporation of India as on 01.04.2012 was 336.04 lakh MTs, both owned and hired. The storage capacity with state agencies for storage of Central stock of foodgrains as on 31.03.2011 was about 291 lakh tonnes, including both covered and CAP capacity. Thus, a total quantity of about 627 lakh tonnes of storage capacity was available for storage of Central stock of foodgrains against the Central stock of 527 lakh tonnes as on 1.04.2012. However, some quantities of foodgrains get damaged due to rain, floods and natural calamities,” Union minister of state (independent charge) of public distribution informed the Rajya Sabha this month.
Problem is more acute for the reason that the country is set to witness a record foodgrains production of 252 million tonnes this year. In fact the eastern India is in the grip of the second green revolution. Five states — Madhya Pradesh, Uttar Pradesh, Rajasthan, Punjab and Haryana – are facing major storage problem. These are the states known as food bowl of the country. The case of Madhya Pradesh is unique, as it does not have enough jute bags to keep the grains.
“Problem of plenty is also for the reason, that consuming states have become producing states. West Bengal, Bihar, Odhisa have come around in a big way as foodgrains producing states,” said Prof. Thomas.
The government in fact informed the Parliament, which discussed the issue of lack of storage capacity, that supply of grains through PDS is enhanced and other welfare schemes linked with grains be launched.
However, the government has committed release of about 55 million tonnes of foodgrains through the PDS. The FCI is of the view that a minimum 75 million tonnes of grains be released through the PDS so that adequate capacity is created for the new crop. The cost of heeding to the advice of the FCI is about Rs 40,000 crore.
The Finance minister Pranab Mukherjee mooted an idea of reviving the old scheme of “Food for Work” through the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS). Prof. Thomas lapped the idea. However, the ray of hope dimmed just a flood down on the Krishi Bhavan where Union Rural Development Minister Jairam Ramesh did not waste any moment to recall “absolutely bad experience” when the “Food for Work” was being executed in some the poorest districts. The idea has been clearly a non-starter. Ramesh even recalled “excessive corruption” to show why he was not pleased.
The PDS grain release is taking place on the basis of 2001 Census. A number of states, including Chhatisgarh, Odhisa, Bihar, Uttar Pradesh, West Bengal, have sought that the PDS allocation be based on the 2011 Census. “We are currently getting 25 lakh tones of foodgrains, if it is raised to 35 lakh tones Chhatisgarh will be able to cover all the BPL families in the state,” Chhatisgarh chief minister Raman Singh told Prof. Thomas in a meeting this month.
However, the Centre is not rushing in to link the PDS allocation to the states based on 2011 Census. The Centre rather wants to wait for the ongoing Socio-Economic and Caste Census (SECC) to complete to revise its PDS allocation system. But the SECC has missed the December 2011 deadline for completion. It is still nowhere completion. Rather, the SECC has been a non-starter, as barring a couple of states like Maharashtra and Punjab, its progress percentage is in single digit as on March 31. It may even be not completed by this year as well.
Besides, National Food Security Bill is being deliberated upon by the Parliamentary standing committee and is expected to give its report before the Monsoon session of the Parliament begins. However, its fate is itself not clear for the reason that the food subsidy burden will be a whopping Rs 1.25 lakh crore, while the programme would still not be universal as sought out by states like Tamil Nadu.
“The government will have to discourage farmers from producing more by ensuring that there is no hike in minimum support price (MSP), which is paid for procuring the grains. The states will have to take the cue from the Centre and stop the practice of giving bonus on MSP. This is the only way we can get out of the mess in which we are trapped currently,” quipped a senior official of the Food ministry.
(This article was first published in Sopan Step)