Mismanaging food

Skewed policies

A fifth of our population is undernourished; more than two fifths of our children under five are under weight, with underdeveloped skeletons; an unspecified percentage consequently have  an impaired capacity to learn; and one in 14 children born does not live till his or her fifth birthday. The figures are not new – as a journalist for nearly half a century I have lived with these and even worse estimates. What defies understanding is why have these figures not changed? Is this propaganda? Is there a conspiracy to make India look bad? 

For it is not as if successive governments have not tried to make the lives of the poor more secure. Do we not have the largest food procurement programme in the world? Do we not provide 35 kg of foodgrain to 104 million families at Rs 2 per kg, a seventh of its minimum market price? Do we not have NREGA? And hasn’t the schoolchildren feeding programme not  fed children and raised attendance in schools all over the country? And finally, hasn’t the GDP grown by an average of 7 per cent  a year for the last twenty years, and quadrupled the national income? Surely some, microscopic part of this growth must have reached the poorest of the poor? Why then are the figures static?

There is, indeed there can be, only one answer: India’s food procurement and distribution policies are not only not working, but by slow degrees have become instruments of predation that are actually impoverishing the poor. Why is this happening? Indeed how can policies followed for half a century have the opposite of the intended effect? The short answer is ‘politics’. Ever since the second world war, first the British, and then our own, governments have adopted food policies that were designed to protect specific groups of people at the cost of others. The rural poor were always at the bottom of the pile. Nothing that the governments of free India have done has changed this. 

Let us look at procurement first. Food procurement was resorted to first by the British to feed urban populations after poor harvests. The procurement was compulsory and done at prices below those of the market. The farmers and the rural poor suffered, but so long as it was kept within limits it did more good than harm. Only during the second world war did the British lose that sense of proportion. The result was the Bengal Famine.

Compulsory procurement was given up by nearly all state governments in the mid-‘fifties but ‘voluntary’ procurement – an oxymoron if there ever was one -- continued and, for two decades, once again served the interests of both farmers and urban consumers, guaranteeing a secure income to the former and assured supplies at stable prices to the latter. But the balance between the two was disrupted when the Green Revolution hit full stride in the mid-seventies. Vast surpluses of wheat and rice brought market prices down well below the cost of production.

Support prices

That is where politics stepped in. Since the mid-seventies state governments have ignored the support prices recommended by the Agricultural Prices Commission (which were intended only to insure farmers against loss) and fixed procurement prices at far higher levels with the explicit intention of shielding their   real income from the vagaries of the market. The difference has been borne by the Centre. So attractive are these arbitrary procurement prices that in good harvest years farmers in Punjab and Haryana sell well over 90 per cent of the wheat and up to four fifths of the rice they bring to the market  to the government procurement agencies.

Much of the food that reaches the ration shops is  siphoned away into the open market by the shop owners with an ingenuity that has few parallels in the world. For instance, since the state governments insist that BPL families must  pick up their entire 35 kg of foodgrain at one time, and since a large  proportion of the  families cannot raise Rs. 70 in cash at one time, the shopkeeper does them a favour and gives them 15 to 20 kg free of cost, provided they agree to forego the remainder. He  then sells the balance  on the open market at a net profit of  Rs. 110 to 170 per BPL  family.

It is as plain as the nose on our faces that all these evils arise from the fact that the central and state governments have, between them, never allowed a free market to develop in foodgrain. Had this existed and had the Central government limited its purchases of foodgrains to what it needed to maintain a buffer stock against  harvest failure, the fall in prices caused by the green revolution would have made farmers shift to higher value cash crops and eventually to perishable crops.

The government’s solution to the problems created by the lack of a free market in agriculture was to make it even less free. Thus when it was found that the PDS was not getting food to the very poor, especially in the rural areas, it created the BPL scheme. Since half the food distributed under this scheme is still not reaching the poor, it has now promulgated the Right to Food Act which will spread the BPL food facility to 60 million more families than were covered before.

But while the Congress is patting itself on the back and expecting to win the UP state elections on the strength of its largesse, its members are not sparing  a single thought for the real reforms that are needed, such as abolishing the entire state procurement-cum public distribution system and replacing ration cards with a food stamp system that delivers purchasing power directly to the intended beneficiaries. Since none of this is being contemplated we should not be surprised, five years hence, if India is still 67th among the most malnourished countries in the world.      

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