A food policy worthy for the archives!-India's food woes

Recent clashes between India and rest of the world at the Bali meeting of WTO helped us to get an insight into the problems India has been facing in the food front because of lack of objective changes in the country's food policy during the last 5 decades. According to many impartial observers the stand of India in the above meeting was not rational and it does not recognize its own deficiencies vis-a-vis policies and practices involved in food production, procurement, storage, distribution and price subsidization. It is a late realization that our existing policies need to be moth balled because they are out of sync with what is happening else where in the world, that a revamp was considered by the new government at Delhi. The panel vested with this responsibility did a commendable job within a short period of time. India's "committee culture" which has the incredulous capacity to delay taking decisions in any field, did not come in the way of completing the report in record time and  the recommendations made by them deserve speedy implementation with high priority. Here is a take on this report which provides interesting reading.

"The report makes five sensible and practical suggestions. First, get the FCI out of the business of procurement in grain-surplus states like Punjab, Haryana, Madhya Pradesh, Chhattisgarh, Andhra Pradesh and Odisha, and shift its focus to eastern Uttar Pradesh, Bihar, Assam and West Bengal. The FCI can purchase grain above its NFSA needs from surplus states, but the actual purchasing should be handled by the states themselves. Getting the FCI out of direct procurement is a good idea and it's not clear why pushing it into procurement in the eastern states is desirable. It would be better to build procurement capacity in eastern states and help fuel another green revolution. Second, the report pushes for a national warehousing system under a PPP model to reduce wasteful storage and transport costs. Farmers can deposit their produce at these warehouses and receive up to 80 per cent of the MSP value of this produce from banks — and then sell it later at market prices. This will be a major improvement as it would reduce storage costs and wastage. Third, the panel suggests that state bonuses be the responsibility of the states and levies be made uniform at 3 per cent. This would help avoid the costs of huge bonuses paid by the states and financed by the levies they charge the FCI to procure from their farmers. Fourth, the panel moots shifting to cash payments for inputs like fertilisers and rationalising the price of urea so that the NPK mix, which has been distorted by urea pricing, is reversed. Smuggling to neighbouring countries and other distortions caused by urea pricing would also be removed. Huge productive investments in the fertiliser sector are needed but have been held back by the absurd pricing system, which has made India even more dependent on fertiliser imports. Fifth, the panel suggests amending the NFSA and reducing the subsidised population to 40 per cent instead of the current 67 per cent. It also suggests BPL consumers get more subsidised grain — 7 kg vs 5 kg — but that the issue price be linked to MSPs, except for the very poor. Further, in cities that have a population of more than one million, fair price shops should be replaced by DBTs. If implemented, these recommendations would provide more food for the poorest population, reduce FCI costs, bring private trade back into the system and give poor urban consumers greater choice in their food basket. It will hurt labour unions that are gaming the FCI system and states that use bonuses as a political handout, which they get the Centre to pay for through levies. This would hugely reduce the massive leakages and corruption in the food chain. If India can implement these reforms in the coming years, it would also avoid unnecessary battles at the WTO. It's time to begin reforming a system that may have served us well 50 years ago but is now benefiting a few at a huge cost."

Subsidy is not a bad word when it comes to upliftment of poor people from their poverty ridden life but when such subsidies are doled out mindlessly as a part of the vote bank politics, it becomes a scandal bordering on crime and shame. It is beyond any body's comprehension as to why government must subsidize well to do citizens even for buying a cooking gas cylinder or for that matter why should subsidized food grains be given under the APL card system to people who have sufficient income to buy the same from the open market? One of the most brilliant suggestions coming from the above panel is to reduce the population coverage under the NFSA from 67% to 40% saving enormously on the total outgo on this count. Similarly the country should have a reliable data base on its citizens vis-a-vis income details, in stead the politicians trying to conduct surveys on caste and religion! To start with, all government employees, those owning a mobile phone, two wheelers, four wheelers, houses, paying IT regularly, registered business men, air travelers, higher class train travelers, etc must be taken out of the list of people eligible for receiving government subsidy. Whether the present government has the courage to do it is another matter. Unless this is done, we as a nation is going to be left behind in the global race to attain economic strength and status.

V.H.POTTY
http://vhpotty.blogspot.com
http://foodtechupdates.blogspot.com

Food grain storage -Where is the quality oversight?

If government orders can set things right, every thing in this country should have worked as they ought to have!Alas, in the scheme of things in the agenda of babus who rule this country, "ordering" is the only duty they have to perform and whether they are obeyed or implemented is none of their business!. Latest one hears is about an "order" by the Goan government to the PDS players in the state to obtain license from Delhi for grain storage to "ensure" quality of grains supplied by PDS to the card holders. What is not clear is how getting a license will improve the quality unless there is a ground level infrastructure to pick up samples, assess quality in a well equipped laboratory and haul up those who indulge in distributing unfit grains to the consumers. Here is a take on this tall order from Goan babus to the state PDS dealers. 

"Goa civil supplies department has stated that all its godowns across the state have to obtain a food safety license to ensure that quality of grains is maintained. The department has also asked for a monthly report from joint mamlatdars about damaged, inferior or infested grains found in godowns from where the grains are supplied to fair price shops through the public distribution system. The directions are mentioned in a circular issued by director of civil supplies Vikas Gaunekar.The joint mamlatdars will also have to educate fair price shop owners about maintaining quality of grains and to take measures to prevent pest infestation. There are more than a dozen godowns in the 12 talukas."

One wonders whether there has been any case in the last 2-3 decades of any food inspector daring to confront PDS system and hauling any ration shop owners or the warehouse owners (FCI or State agencies) for violating food standards? India is a country where public agencies are holy cows which cannot be touched by quality control agencies, be it food grains or the milk. If these QC agencies had done their job efficiently without fear, the quality complaints so rampant from consumers about unfit grains being supplied would not have reached Himalayan dimensions to day. Even private players manufacturing and selling sub-standard foods are rarely hauled up with annual conviction hardly in the range of 700-1000 in a country with a population of 1.2 billion! The truth is that food standards agencies in almost all states are grossly understaffed with archaic testing infrastructure though there are loud proclamations from Delhi that crores and crores of rupees have been "budgeted". Is this some sense of pessimism expressed here? Of course past experience has taught the citizens in this country to be pessimistic about every thing government says from time to time! 

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

FOOD SECURITY AND THE STORAGE WOES-IS THE COUNTRY FULLY PREPARED?

The "courageous" Government at Delhi (or is it food hardy?) has now jumped into the so called food security program, one wonders what is in store for the country. It looks like government is ignoring the time tested saying that "a bird in hand is two worth in the bush"! That is not doing much to develop the economy while indulging in resource sapping free food distribution extravaganza. The country may end up with neither hungry alleviation nor economic growth. The brutal butchering of Indian rupee in the currency market during this midweek is a warning signal which can be ignored only at the expense of the economic security of this country. The much touted food security bill which garnered support from practically every party did not had the courage to stand up against this populism and voter bribing attempt through this bill and therefore each one of them will be responsible for the economic consequences of implementing an impractical scheme. Here is an informed critique from well reputed experts about the gullibility of this latest action of the federal government. 

"As the procurement of food grains increase, the storage capacity should be appropriate, explained Sabnavis, "If we look at the bill closely, 60 million tones would be distributed annually, on an average five million a month. This means 55 million tonnes would be lying in the warehouses and if we add buffer stock to it, we would move closer to 100 million tonnes of capacity. Hence, we would require appropriate mechanisms for storage." Ashok Gulati, chairman of the Commission for Agricultural Costs and Prices, told Business Standard it was a debatable issue as to how much food grains were damaged. "Twelve million tonnes in Punjab and five-six million tonnes food grains in Haryana are lying in the open. The International Mechanical Engineers estimates say that every year 21 million tones of wheat is damaged in India. Hence, that goes without saying that we need better infrastructure to take care of our produce", said Gulati. The total storage capacity available for central pool stocks was 74.6 million tons as on July 30 this year. However, Gulati believed that unless it is announced what the buffer stocks norms in the Bill are, one cannot know how much produce needs to be stocked. He felt that not more than 51-52 million tones storage capacity will be required for implementing the proposed scheme.  "This is because we need to match our procurement with distribution and at present, we are keeping much larger stocks than we need", added Gulati".

Is it not a pity that no one in the country, least of all those governing the country, has a clue regarding the way to go about in implementing this massive scheme though every one is talking about crossing "the bridge when we reach there"! As rightly said the storage and distribution system as it exists in most states are woefully inadequate to deliver the promises contained in the bill and it is not going to be easy to rectify the same over night even if action is taken to day. With very little evidence about any improvement in the management efficacy of those entrusted with grain storage and distribution, the country will continue to waste grains and allow pilferage through many leaky points through out the system. It is gut wrenching for every honest and conscientious India to be told by experts that more than more than 18 million tons of precious food grains that can feed the population for three months are lying in the open without protection from the spoilage vectors and elements! Another 21 million tons are reported to be damaged every year in the country as assessed by some international agencies. With only a few months remaining for general election there is a lurking suspicion that this food security program will be abandoned once the election over!   

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

IS THE FOOD GRAIN POLICY OF GOI IN SHAMBLES? APPARENTLY SO!

The food glut scare is giving no sleep to the babus in Delhi who are running helter skelter to find a way to manage the grain stocks, old as well as new, now being procured without inviting Supreme Court wrath or consumer backlash. As there are no long term policies in place governing agricultural production and export, the dynamics of grain flow change from day to day. If exports are allowed to day, it could be banned tomorrow when there are some protests from the people. The crop pattern in the country also is highly skewed with water guzzling crops like Sugarcane, Banana and wineyard grapes getting preference in water utilization policies pursued during the last few years. Immediate concern is whether surplus food grains over and above that is required for domestic consumption between the harvests as well as for food security, reported to be sufficient to feed half the population for an year, can be safely exported without causing any price distortion in the market place. Some experts feel that it is safe to export a predetermined quantity of grains as a part of a long term export policy with flexibility to increase whenever there is too much of a surplus. However a timid government with the 2014 election uncertainties staring at it, does not seem to have the courage to open up grain export for earning valuable foreign exchange. Here is a take on this issue which is a "hot potato" for Delhi to handle comfortably! 

"India should adopt an 'open' policy for food grains exports so that small farmers are benefited from prevailing higher global food prices, Shenggen Fan, Director General, International Food Policy Research Institute (IFPRI) on Friday said. India must also reduce rising food subsidy by 'better' targeting of Public Distribution System, Fan observed. "At present the PDS is not well targeted which is leading to pilferage of food grains. By reducing food subsidy, more financial resources could be allocated for research and development in agriculture," Fan told FE. "India being the biggest the rice exporter must have an open export policy for increasing farm income realistion ," Fan commented. India has emerged as the world's biggest rice exporter in 2012 surpassing Thailand with shipment of around 10 million tonnes after a four year old ban on rice exports were lifted in 2011. He said China may increase the volume of rice import from India in coming years because of rise in cost of farm production. China's total rice import was 2-3 million tonnes from Vietnam and India last year. "It is just a beginning and China's rice import from India could enhance in the coming years with cost of labour, water and land increasing. Also, it is cheaper to import food grains from India instead of providing subsidies to farmers," Fan, the head of the key global think tank observed India has a huge food grain stocks – mostly rice and wheat, due to bumper production last year. The rice and wheat output was reported at record 104.32 million tonnes and 93.90 million tonnes, respectively. Due to US drought, the global food prices are expected to higher and volatile during the year, He said due to uncertainty in supplies of wheat, corn and other crop because of drought in many parts of the world is expected to keep supplies situation 'volatile'. "We need stability in higher food prices as because of lack market access small farmers have not been able to take advantage of the prices," Fan said while predicting that global food prices during the year will be 'high and volatile'. On level of poverty in Asian countries like India and China, Fan observed, "The region as a whole is not on track in meeting the millennium development goal (MDG) of cutting the rate of undernourishment by half between 1990 and 2015." "India accounts for some 217 million or a quarter of all undernourished people globally. As a result, India is likely to miss the MDG target," he said. Calling for hiking investment in the agricultural research, Fan observed that agricultural spending in research and development generally has the largest positive effects on growth and poverty reduction. "For each unit of local currency spent on the agricultural R&D, on average 11 local currency units are returned. For every rupee invested in agri-research in India,Rs 13.5 is returned," a IFPRI study has stated. "Indian government should increase investment in agriculture, rural infrastructure and education as these have high payoffs in terms of raising smallholder farmers' productivity and incomes," Fan noted."

Is it not remarkable that Indian farmer has not failed the country in spite of enormous odds faced by him with severe water scarcity and limited support from the governments at the Center as well in the states and this year also a bumper harvest is predicted? Scores of farmers are starving and committing suicide with a sickening regularity because of many socio-economic reasons and the farm operations are increasingly becoming economically unviable with too many uncertainties. The small land holdings in the hands of small and marginal farmers cannot be expected to generate adequate cash for meeting the daily necessities of life for them. Cooperative model for integrated development of land does not seem to be working except in the case industrial crops like Sugarcane and Banana, that too monopolized by big land holders with powerful political connections. Under these circumstances Government must encourage exports in a big way and utilize the earnings for improving the lots of the poor farmers of India.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

IS THE FOOD GRAIN POLICY OF GOI IN SHAMBLES? APPARENTLY SO!

Many international experts believe that India has reached a tipping point as far decision making is concerned and if GOI does not face the daunting task of addressing the grain surplus on its hands, future governments and the nation will have to pay a heavy price for shirking the responsibility. Shockingly the very fear GOI is having regarding food inflation if massive export is allowed right now is going to haunt it later because locking up the grains under unsafe conditions and starving the market can lead to only sharp increase in prices which is already being experienced by the middle class population most of whom will have to depend on free market grains for their day to day sustenance. With the general election due any times now, sooner this policy jam is removed better it will be for the country at large. Here is some critical commentary on this vexatious issue now being faced by the country.   

"India should adopt an 'open' policy for food grains exports so that small farmers are benefited from prevailing higher global food prices, Shenggen Fan, Director General, International Food Policy Research Institute (IFPRI) on Friday said. India must also reduce rising food subsidy by 'better' targeting of Public Distribution System, Fan observed. "At present the PDS is not well targeted which is leading to pilferage of food grains. By reducing food subsidy, more financial resources could be allocated for research and development in agriculture," Fan told FE. "India being the biggest the rice exporter must have an open export policy for increasing farm income realistion ," Fan commented. India has emerged as the world's biggest rice exporter in 2012 surpassing Thailand with shipment of around 10 million tonnes after a four year old ban on rice exports were lifted in 2011. He said China may increase the volume of rice import from India in coming years because of rise in cost of farm production. China's total rice import was 2-3 million tonnes from Vietnam and India last year. "It is just a beginning and China's rice import from India could enhance in the coming years with cost of labour, water and land increasing. Also, it is cheaper to import food grains from India instead of providing subsidies to farmers," Fan, the head of the key global think tank observed India has a huge food grain stocks – mostly rice and wheat, due to bumper production last year. The rice and wheat output was reported at record 104.32 million tonnes and 93.90 million tonnes, respectively. Due to US drought, the global food prices are expected to higher and volatile during the year, He said due to uncertainty in supplies of wheat, corn and other crop because of drought in many parts of the world is expected to keep supplies situation 'volatile'. "We need stability in higher food prices as because of lack market access small farmers have not been able to take advantage of the prices," Fan said while predicting that global food prices during the year will be 'high and volatile'.On level of poverty in Asian countries like India and China, Fan observed, "The region as a whole is not on track in meeting the millennium development goal (MDG) of cutting the rate of undernourishment by half between 1990 and 2015." "India accounts for some 217 million or a quarter of all undernourished people globally. As a result, India is likely to miss the MDG target," he said. Calling for hiking investment in the agricultural research, Fan observed that agricultural spending in research and development generally has the largest positive effects on growth and poverty reduction. "For each unit of local currency spent on the agricultural R&D, on average 11 local currency units are returned. For every rupee invested in agri-research in India,Rs 13.5 is returned," a IFPRI study has stated. "Indian government should increase investment in agriculture, rural infrastructure and education as these have high payoffs in terms of raising smallholder farmers' productivity and incomes," Fan noted. 

The argument that India must invest more on agricultural research is well reasoned one and to add to this it may be appropriate that more focus is made on pulses and oil seeds, both in tremendous short supply currently. According to dispassionate observers GOI's obsession with crops like cereals, sugarcane and other crops, ignoring the precarious situation vis-a-vis pules and oil seeds can further exacerbate the food security problem in the coming years. A population fed on a predominantly carbohydrate diet cannot be expected to be healthy as per present nutritional norms. It is time GOI addresses these issues without losing further time and take a long term agricultural policy decision based on domestic food needs and export potential for commodities in which the country has excelled itself.  

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

THE FOOD SECURITY "APATHY"- IS THERE NO ACCOUNTABILITY?

It is only recently that India is being viewed as a potential economic power because of the sustained GDP growth brought about by the opening up of the economy to global changes. The manufacturing and service sectors have contributed greatly to this reasonable boom though agriculture is increasingly being marginalized adversely affecting the fortunes of millions of farmers in the country side. Unbiased critics may be right in pointing out that the visible signs of development, excluding more than 70% of the population residing in the rural regions, has no meaning because the fruits of current development are getting concentrated in few hands with no percolation effect. The country is over dependent on imported edible oil and pulses in spite of massive investments on agriculture during the last two decades. Under such conditions wastage of food grains, what ever be the excuse, cannot be condoned as the number of hungry people in the country is substantial if recent reports by reputed international agencies are to be believed.

"RODENTS, MONKEYS and dogs eating away the food grains; poor food storage conditions and rain water flowing from the sacks of wheat in the godowns of Food Corporation of India are a disgrace to the nation. We have seen such pictures on different news channels. Many months have passed since a news channel first aired such reports but the situation has not improved. On the contrary, the Agriculture MinisterSharad Pawar and other officials are accusing media of repeatedly showing the same footage and exaggerating the issue. In Allahabad, more than one lakh wheat sacks are left in the open despite enough space in the godown. The godown is spread in nine acres of land. Similar situation is prevailing in Patna and Katihar godowns. Food grains are left in open without any care. In Haryana itself three lakh sacks of wheat got wasted in a warehouse due to floods. The Met department had issued flood warning to Punjab and Haryana before the arrival of monsoon. However, the precautions were not taken and the foodgrains continued to lie in open and low-lying area. Flood water entered the warehouse and damaged the food grains. Similarly, 4.5 lakh sacks of wheat estimated to be worth over Rs 25 crore were damaged due to rains at the FCI godown at Hapur in Ghaziabad. But when the media-persons contacted the FCI offficials, they quickly denied the impact of rain. The stock was meant to be picked up by the Uttar Pradesh government but it failed to do so in time. Foodgrain storage is a major issue in India as a large part of it gets wasted due to poor storage conditions. Every year it is the same story. Even Pawar admits that we need 140 tonnes of extra storage capacity. But the question arises why it has not been done till now".

Is there no accountability in this country with a great historical past, ruled not by cruel kings but by people's own elected representatives? If corporate management principles are applied probably no one in the administration will escape indictment or punishment for the negligence, callousness and insensitivity to public funds. Symbolic resignations or temporary admonition followed by rehabilitation of the tainted officials cannot be accepted and deterrent action of severe nature will only be understood. There must be an accountability mechanism before which all these inefficient, corrupt and good for nothing officials must be prosecuted for the unpardonable food "crimes" they commit in allowing valuable foods go waste.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com