THE country’s food grain stock is 60 million tons which is nearly three times the required buffer. We have storage capacity for only 52 million tons. About seven million tons are rotting in the open. At least six million tons have already become unfit for human consumption. The surplus is likely to increase further in the coming months. The monsoon crop has been satisfactory. Heavy rains have led to recharge of groundwater and the winter crop is also likely to be normal.
Surprisingly, India continues to languish in the Global Hunger Index despite availability of surplus food grain. The index is prepared by the International Food Policy Research Institute. India was ranked 65th last year. It has slipped to 67th in the 2010 index. Not that the extent of hunger has increased; there has been some improvement on that score. We had secured 31.7 points in 1990. This has declined to 24.1 points in 2010. But while the scale of improvement has been better in other countries, our rank is sliding. The laggard athlete runs forward but is yet said to be ‘behind’ in the race. Similarly, we are moving ahead in reducing the level of hunger but are falling ‘behind’ other countries.
The Supreme Court has suggested that the surplus grain may be distributed free to the poor instead of letting them rot in the open. Yet it is doubtful whether this will lead to better nourishment. Haryana is among the more prosperous states in terms of agriculture. However, its "hunger status" is said to be "alarming". Punjab and Tamil Nadu are not far behind though they are not facing a shortage of grain.
Central to the problem is the lack of a balanced diet. Grains are provided to the poor BPL card-holders at a considerably subsidized rate. However, they don’t have the means to buy oil, pulses and vegetables. The resultant imbalance in the diet may be the reason why these states rank high in the hunger index. The distribution of more grain is unlikely to improve the nutritional requirement of the poor since enough of this commodity is available.
The second factor behind the country’s low rank in the hunger index appears to be the culture of consumerism. The family uses the available money to buy television sets instead of nourishing vegetables. The free distribution of grain is not feasible from the administrative point of view either. As in the public distribution system, the risk of a huge leakage is substantial.
The problem of malnourishment is inherent in the model of economic development. As the policy gets to be implemented, the poor man is first deprived of his job and made destitute. Manufacture of goods by automatic machines is encouraged. Then the destitute is provided with free or subsidized grain through the government machinery. The homemaker is not able to provide a balanced diet because the family can’t afford oil, pulses and vegetables. The government had provided a huge subsidy on urea till a few years ago. Soil productivity declined on account of over-application of nitrogen and a deficit of potash and phosphates. Similarly, the excessive intake of grain is leading to an unbalanced diet, even malnutrition. The current development model also encourages the purchase of electronic gadgets ~ the symbols of prosperity. The family spends the limited cash that is available on such purchases instead of balanced nutrition. The leakages that take place in distribution are also inherent in the development model.
The solution is to dismantle the welfare state and provide direct cash support to all citizens. An advertisement policy, that encourages healthy lifestyles, should be devised. The government must export the surplus grain and distribute the profit obtained. The price of wheat in the global markets is Rs 17 per kg. It is procured at Rs 12 per kg. It is better to export the surplus and give Rs 17 in cash to the poor instead of giving them grain valued at Rs 12.
Domestic prices may rise due to exports. This should not be regarded as a negative phenomenon. The farmers’ income will increase and benefit scores of people. Increased prices will lead to higher production and help secure food security. Agricultural workers will get a share of the higher prices through higher wages, and this will help reduce malnourishment. The negative impact of higher grain prices will be felt by the urban consumers. We should not sacrifice the food security and welfare of our millions of rural people for appeasing this already well-off segment of the population.
The Minimum Support Price policy is said to be responsible for the surplus stocks. The government is committed to buy all the grain offered for purchase at a pre-determined price. Farmers prefer to grow grain because they are assured of this minimum price. The result is excess production of grain and a shortfall in the production of oil, pulses and vegetables. While these facts are true, it doesn’t follow that the support price policy is undesirable.
Till the eighties, we were dependent on food imports. Today we are in a position to export because farmers have increased production on the basis of the support price policy. Millions of farmers have benefited. The government must procure yet more foodgrain and, if necessary, export them even at a loss. This is being done by the developed countries in order to maintain domestic production of food. We need to increase both production and exports. Another strategy to manage the surplus is to include other minor crops such as mustard, groundnut, soyabean and pulses in the Minimum Support Price policy. This will lead to diversification of the crop pattern and make oils and protein available to our people.
The World Bank has suggested that countries like India should not impose a ban on the export of foodgrain as a matter of policy. Free trade in grain will be beneficial for importers as well as exporters. This is in keeping with this writer’s suggestion to export surplus stocks. But there is a critical difference. The World Bank suggests that exports should be allowed even in times of domestic shortage, if international prices are high. This can be harmful for the sovereignty of the country. Remember that the former US President, Jimmy Carter, had imposed a ban on the export of grain to Russia as a pressure tactic for quitting Afghanistan. We will unnecessarily push ourselves to a similar situation. We should confine exports to surplus stocks.
The writer is former Professor of Economics, Indian Institute of Management, Bangalore.
Bookmark, remember and visit us again: www.lankapolity.com