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Saturday, June 2, 2012

Red alert on Food Security---Brinda Karat


The call by the Left Parties for a nationwide struggle for a universal public distribution system to ensure food security, doing away with the targeted APL/BPL is very timely. For the last two years with the increase in foodgrain production and good procurement, the country has ample stocks to ensure a non-targeted public distribution system along with maintaining adequate buffer stocks. But under the neo-liberal policy framework, a 3 per cent increase in foodgrain production, as it is this year, is seen not as an opportunity to tackle malnutrition but as a “problem” and a “mismatch of production and storage” capacity. 

We have the shameful spectacle of plenty amidst hunger and malnutrition while Government Ministers discuss how to avoid foodgrains rotting in the open, because of lack of storage space. On April 30, it was reported that the Prime Minister would be meeting with the Ministers of Agriculture, Finance and Food along with the Planning Commission officials to decide what to do. It surely does not require such high level meetings to know that the only “solution” in a country with the largest malnourished population in the world, would be to ensure cheap foodgrains to the people through increased allocations. The FoodMinistry is on record that it had suggested that the allocations for BPL and APL should be doubled and the price for APL reduced which would “eliminate old stocks” and “empty the godowns” for the rabi season procurement. According to statements made by Ministry officials to the Parliamentary Standing Committee on Food, they had asked for an allocation of 1.06 lakh crore rupees, around 30,000 crores rupees more than the 2012-2013 budgetary allocation. But this has not been accepted. 

On the contrary, big capitalist farmers and agri-trade representatives in the Government are arguing for lifting of restrictions on exports of foodgrains to be encouraged through subsidies to the farmers. This deliberate attempt to pit the interests of farmers against consumers helps only the rich farmers and the big traders. There are examples in the not so distant past, as in 2008-2009 when deliberately created shortages, say for example in sugar supplies, helped big sugar companies make a killing in profits on the import and export of sugar, subsidized at both ends while consumers had to pay upto 100 rupees a kilo of sugar. Earlier in 2006 and 2007, a deliberate non-procurement of wheat leaving the field open to private procurement at only slightly higher prices than the MSP, led to a substantial loss to the exchequer when India had to import wheat at much higher prices than it gave to the Indian farmer. Again it was the big farmers and traders that made a killing. Middle and small framers will not benefit from any lifting of export restrictions. For the large majority of farmers, deep in debt, the immediate relief would be if the UPA Government accepted the recommendations of the Swaminathan Commission to increase the Minimum Support price to a sum based on a calculation of production costs plus a 50 per cent profit margin. 

The current “dilemma” of the Government is shown in the figures. India has buffer stock norms for rice and wheat, for each quarter of the year, decided by seasonal requirements. The norms are as follows:

Month
Rice
Wheat
Total in lakh tonnes
April 1
122
40
162
June  1
98
171
269
Oct 1
52
100
152
Jan 1
118
82
200

Since the last two years the stocks have been far above the requirement. For example, in January 2010 it was 474.45 lakh tonnes, 137  per cent more than the buffer norm and in April 2012 at 545 lakh tonnes, it is 236 per cent above buffer norms. With a good rabi crop a record procurement is anticipated. The total stock of wheat and rice could go up to over 700 lakh tonnes. Because of a lull in global market prices of foodgrains, the big farmer lobbies and traders had not made a noise about export restrictions. However with the FAO warnings of expected rise in international prices, these lobbies have again got active. Their aim is to force elimination of the stocks in the name of storage problems. Once the export restrictions are lifted the market manipulators will again dominate. 

A similar situation occurred in 2002-2003. At that time under the BJP led Government the stocks of rice in October 2002 stood at 156 lakh tonnes well above the buffer stock norm. There was a similar campaign against rotting stocks once again leading, not to increased allocations to the PDS, but to exports. It will be recalled that the BJP Government preferred to allow traders to lift the stocks at BPL prices and export, making huge profits, rather than distributing it to Indian consumers. Within a year, the stocks were brought down to well below the buffer stock norms and shortages were created leading to price rise.

While the aim of the present campaign on “lack of storage space” is geared towards the big farmer and traders demand for exports, it also is aimed at lowering procurement by State agencies. Big traders have the capacity to hoard grains till prices suit them. Such a situation is designed to create shortages in the future which will definitely lead to increased prices. 

This is not to say, however, that there is no problem of storage capacity. It is scandalous that in spite of repeated assurances to Parliament, the Government has failed to increase storage capacity to any significant degree. According to the Food Secretary, the shortage of storage in the next few months will be to the tune of 100 lakh tonnes. The policy of the Government is to subsidize the private sector through various schemes. The Parliamentary Panel’s report reveals a disturbing picture. Whereas the storage capacity of FCI godowns was enhanced by merely one lakh tonnes between June 2009 and February 2012, the FCI hired 50 lakh tonnes more of storage capacity in private godowns. Thus subsidizing the private sector through various schemes is also a key component of Government policy in the sphere of storage. 

The reality of rotting foodgrains while millions starve is a moral outrage. But the question is what is the most rational and socially desirable way to deal with the problem? By permitting exports as some are demanding or by ensuring an immediate increase in PDS allocations as well as the numbers of families to be covered, i.e. moving towards a universal PDS? 

The present debate on the issue of production, procurement and storage is thus a red alert on the issue of food security. The present situation provides an opportunity to broaden and intensify the struggle to replace the utterly flawed Food Security Bill with one that guarantees universal food security at a minimum of 35 kgs of foodgrains at two rupees a kilo. This is not only do-able but an urgent necessity for both consumers as well as farmers.
curtsy-Ganashakti

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