(Reuters) - Every day some 3,000 Indian children die from illnesses related to malnutrition, and yet countless heaps of rodent-infested wheat and rice are rotting in fields across the north of their own country.
It is an extraordinary paradox created by a rigid regime of subsidies for grain farmers, a woeful lack of storage facilities and an inefficient, corruption-plagued public distribution system that fails millions of impoverished people.
And it is an embarrassment for the government led by the Congress party, which returned to power in 2009 thanks in large part to pledges of welfare for the poor, who make up about 40 percent of the 1.2 billion population.
Quite why the authorities could not simply offload the mountains of grain for free to fill empty stomachs is puzzling, but the explanation lies in the complex regulations that govern procurement and distribution.
"This is a case of criminal neglect by the government," said D. Raja, national secretary of the Communist Party of India, an opposition group. "The ruling party has been the worst manager of the demand-supply of food grains."
Officials say that, in all, about 6 million tonnes of grain worth at least $1.5 billion could perish. Analysts say the losses could be far higher because more than 19 million tonnes are now lying in the open, exposed to searing summer heat and monsoon rains.
Saddomajra, a village in the bread-basket, Punjab, is one of the dumping grounds for the record stockpile of wheat that has accumulated after half a decade of bumper harvests in the world's second-largest producer of the grain.
Here there are thousands of sacks of decomposing wheat, occupying an area the size of a football field and towering in some places to the height of a house. Tarpaulins cover most of the mounds, but many of the bags are torn, spilling blackened grain blighted by fungus and insects.
"The wheat has been lying there for the past five years. It smells very bad," said Hakkam Singh, who works as a watchman at the open field. "Nobody steals it, but people use it to feed fish and poultry farms."
At another dump, on the outskirts of Amritsar, locals told Reuters that officials sometimes dip into the sacks of rotting grain to mix it with fresh wheat for distribution to the poor who hold ration cards.
WHEAT STOCKS AT ALL-TIME HIGH
The government buys rice and wheat from farmers at a guaranteed price, a support system akin to the subsidies that led to Europe's notorious butter mountains and milk lakes.
The government has raised the price it pays to buy wheat by more than 70 percent since 2007, which only encourages more production. As a result, stocks are now at an all-time high of about 50 million tonnes, 12 times more than the official target.
"It's related to pure economic security for the farmers," said Purnima Menon, a research fellow at the International Food Policy Research Institute in New Delhi. "They make a safe choice of crops."
Rajiv Tandon, a senior adviser for health and nutrition at aid organisation Save the Children in India, said that to diversify the country's food basket farmers should be offered incentives to grow vegetables and other cash crops.
However, he said root-and-branch modernisation is needed. The farm sector was transformed by the introduction of high-yielding seeds, fertilisers and irrigation during the Green Revolution nearly half a century ago, ending a dependence on imports, but it has seen only incremental reform ever since.
Storage is one of the biggest problems of all.
"For the last 25 years the storage capacity has not been upgraded at all," Tandon said. "Part of the grain is officially stored outside store houses, where the chance of rotting is high. There are often not enough sacks and tarpaulins, and sometimes it is dumped by a graveyard or cremation centre."
Grain stocks officially deemed as stored in government warehouses now stand at a record 82.4 m illion tonnes. However, that is about 20 million tonnes more than actual capacity, which means grain lying in the open is being passed off as "stored".
WHO WILL BUY?
State-run Food Corp. of India (FCI), the main grain procurement agency, buys about one-third of total wheat output to run welfare programmes and keep stocks for emergency needs.
What to do with the rest is a conundrum for the government, which is reluctant to sell wheat for less than the inflated support price it paid to farmers because it would put further strain on an already hefty fiscal deficit.
Recently it offered 6 million tonnes of rice and wheat to state administrations for the poor at cheaper rates, in addition to 55 million already earmarked for financial year 2012/13. But there were not many takers because state governments are grappling with budget overruns themselves.
Exporting wheat is not an attractive alternative.
After buying wheat from farmers and adding freight, storage and transport costs, the free on board (FOB) price is around $346 a tonne. However, Indian wheat would only be competitive in the export market at around $260, which implies a loss - effectively a further subsidy, and this time to consumers in other countries - of $85-90 per tonne for the government.
The brimming granaries forced India to lift a four-year-old ban on private exports last September, but lower global prices have scuppered those plans.
Traders say that even if India went all-out to export wheat it could at best sell 6-7 million tonnes a year because of transport bottlenecks and doubts about the quality of the grain.
New Delhi is considering the export of up to 3 million tonnes of wheat to sanctions-hit Iran, but traders say Tehran will not be falling over itself to buy because of concern that Indian grain may be tainted by fungal disease.
Last month the government decided to offer 3 million tonnes of wheat to local biscuit makers and flour millers at $205 a tonne against the $225 it paid to farmers in 2012.
"Subsidising our bread and biscuit makers is easier than subsidising consumers of other countries," said a senior government official, who did not wish to be identified due to political criticism of a solution to the surplus that benefits private companies rather than the poor.
In China, a large portion of wheat stocks are channelled into the country's rapidly expanding animal feed sector, replacing more expensive corn. However, India has an exportable surplus of corn and its meat consumption is far lower, so there is little demand for wheat as a replacement for other grains.
"NATIONAL SHAME"
A government-supported survey published earlier this year found that 42 percent of India's children under 5 are underweight, almost double that of sub-Saharan Africa. The finding led Prime Minister Manmohan Singh to admit that malnutrition was "a national shame".
The cause of this widespread malnutrition cannot be tied mechanically to a lack of staples like rice and wheat.
Indeed, many families living on less than $2 a day are fuelled and filled by subsidised carbohydrate-rich food like wheat chapatis. These lack the much-needed protein and other nutrients that come in more expensive food. Poor hygiene and contaminated water are also to blame because they cause illnesses like diarrhoea, which prevents nutrient absorption.
Still, there are real grain shortages in the poorest states.
Here the problem is an inefficient and corruption-prone distribution system. Eighteen months ago investigators said millions of dollars worth of grain meant for poor families had been siphoned off and sold locally and abroad in a scam involving hundreds of government officials.
In 2010 the Supreme Court urged the government to distribute grain free to the hungry rather than let it go to waste in warehouses and open fields, but that hasn't happened.
This is because state governments are reluctant to buy extra grain for distribution under the food welfare programme and, even if they were, only people with under-the-poverty-line ration cards would be entitled to buy it in subsidised shops.
"The problem of rotting grains and the poor going hungry lies in the system itself," said Biraj Patnaik, principal adviser on food issues to the court.
The government is now planning a food security scheme that will guarantee cheap grain to 63.5 percent of the population.
However, critics see this as political gimmickry. They doubt that the new scheme will be less corrupt, more efficient or better targeted than current programmes, and they suspect that the government will not be able to afford a plan that may cost as much as $12 billion in additional subsidies a year.
(Writing by John Chalmers; Additional reporting by Ajay Verma in SADDOMAJRA, India, by John Chalmers, Satarupa Bhattacharjya and Ratnajyoti Dutta in NEW DELHI and by Naveen Thukral in SINGAPORE; Editing by Jeremy Laurence)
-Reuters
Food grains rot in the open as prices rise
SC says it is a crime to waste food when people die of hunger
It has taken the Supreme Court, and not the government, to point to a looming catastrophe when on Tuesday it expressed serious concern over the rotting of thousands of tonnes of food grains. A Bench of Justices Dalveer Singh and Deepak Verma admonished the government for its lackadaisical attitude in preserving precious food grain. They said: “If you cannot store them (food grains), give it to the people to eat.”
The Supreme Court’s observations come at a time when people across the country continue to reel under the unending pressure of the rising prices of essential commodities, including food grains and vegetables. The government has not been able to check the runaway prices of essential commodities.
The apex court’s stand on the issue coincided with Food and Agriculture Minister Sharad Pawar’s immodest admission in the Lok Sabha that over 11,700 tonnes of food grains worth Rs 6.86 crore was found “damaged” in government storage facilities. “Reports have been received about damage to wheat and rice stocks in Food Corporation of India depots in some towns of Uttar Pradesh,” Pawar said.
According to data submitted by Pawar, the maximum damage of 7,066 tonnes of foodgrains was reported from Punjab, followed by 1,846 tonnes from West Bengal and 1,457 tonnes from Gujarat. Of the food grains damaged, 9,141 tonnes was rice while 2,486 tonnes was wheat, and the remaining 81 tonnes was paddy.
While hearing a public interest litigation filed by the People’s Union for Civil Liberties, the Supreme Court said: “It is a serious problem and we are sure the government has identified it. However, we do not see any effective steps taken to solve this problem. Committees have been formed and various resolutions have been passed. But there is no implementation of the decisions taken.”
In its ruling, the Bench said that in a “country where admittedly people are starving, it is a crime to waste even a single grain. The official statement made by the government indicates that there is wastage of food at many places.”
The court advised the government to “consider constructing adequate warehouses or storage facilities on a long-term basis.”
It suggested that it can, “on a short-term basis,” also consider hiring warehouses or putting up waterproof tents to save the grain and that “all-out efforts must be made to ensure that not a single grain is wasted.”
Directions
Even as Additional Solicitor General Mohan Parasaran assured the Bench that steps would be taken to address the issue, it sought a response from the union food and civil supplies secretary within two weeks and asked the government to discontinue supply of subsidised foodgrains to people above poverty line. It also directed the government to provide food grain according to the size of the family among below poverty line card holders.
The judges suggested that the public distribution system should be computerised to avoid pilferage and corruption, that the system should be linked to the Unique Identification Authority of India and fair price shops should be operated by government bodies rather than private agencies.
The court’s attention to the grave situation was drawn by advocate Colin Gonsalves, who pointed to a report in a newspaper, saying that a large quantity of grain was being wasted as the government did not have any facility to store it.
He cautioned that if the grains were left to rot in the open for six more months, they would not be fit even for consumption of cattle.
In its observations, the Bench also asked the Centre to furnish its reply to the report of the Justice Wadhwa Committee which was set up to look into the causes of starvation deaths. The Wadhwa panel had recommended construction of warehouses for storing foodgrains.
DH News Service
-DeccanHerald
Must prevent food grain rotting in the open
One of the things that make me very angry is the sight of bags of food grain rotting in the open. It reminds me every time that 45 per cent of India’s children are malnourished, which translated into more simple language means that, every second Indian child goes to bed hungry at night. This shameful fact made the Supreme Court (SC) angry enough to demand that the government distribute the grain to the poor, rather than let it rot in the open or be eaten by rats.
Unfortunately, the Government of India referred the matter to Sonia Gandhi’s kitchen cabinet, the National Advisory Council, who have come up with another one of their amateur solutions in the form of a Food Security Bill that, when implemented, will do no more than create fresh channels of corruption. Keeping in mind that, according to most experts, more than 60 per cent of food grain distributed through the Public Distribution System ends up in the wrong hands and you will understand what I mean. Sonia’s NAC plans to use this very leaky distribution network to distribute its free food grain. Surely, it would have been wiser to suggest a more effective way of distribution before pouring more food grain into a system that leaks like a sieve.
The license raj
Last week, when the monsoon reached northern India, we saw pictures on television of huge stacks of grain rotting in the open and once more. Our news channels have played a stellar role in highlighting this shameful waste of our rice and wheat supplies. Looking at the pictures, I found myself not just angry but seriously puzzled about why we cannot build enough warehouses? My brother is a farmer in Haryana where 20,000 tonnes of wheat lies in the open because the Food Corporation of India (FCI) has not yet managed to transport from its limited warehouses, more than 80,000 tonnes of rice stocks. According to a recent story in the Indian Express, stocks of food grain lying in the open across the country has doubled in the past three years, while the FCI’s covered storage facilities have remained the same in more than five years.
To find out why it is so hard to build warehouses, I rang my brother and asked him to make some inquiries. He is well-connected with local farmers in his village and with other people in the agricultural community, so it did not take him long to find out that one of the reasons why we build warehouses at such a slow pace is because to build one you need a license and to get a license you need to pay a bribe. This piece of information interested me and I made further inquiries that revealed that the biggest problem in Indian agriculture is that the license raj continues to be alive and well. There have been no attempts to end the license raj because over the past 60 years, huge vested interests have developed in the limitless channels of corruption that the license raj generates. It is really no different to the state of Indian industry before the economic reforms began in 1991. Except for one grim difference. Industrial licenses strangled enterprise and kept India poor, but it did not cause starvation and suicides. The license raj in agriculture could lead to farmers giving up farming for other jobs and then who would grow the wheat and rice for us?
If you think this is an exaggeration, pay attention to the figures I am about to give you. They come from Haryana where irrigated land is widely available and even here the most that a farmer can make out of an acre of land is Rs.30,000 a year. But, if his land happens to be on the edge of some spreading urban centre he could sell it for as much as Rs.25 lakhs an acre. Why should he waste his time farming?
Not only has there been no reform in the agricultural sector, the government has done almost nothing to build the infrastructure which is so essential if farming is to be a profitable business. If farmers grew cash crops like fruit and vegetables they could become quite rich, but just as we have not bothered to build warehouses we have not built sufficient cold storages. According to expert estimates, more than 40 per cent of the fruit and vegetables that Indian farmers grow rot in the fields. This is believed to be more than all the fruit and vegetables that are produced in the United Kingdom every year. For the situation to change we need rural roads that provide speedy access to markets.
Apathetic government
Most land holdings in India are very small. Five acres is considered a big land holding. Compare this with the United States where the average size of a farm is 418 acres. In socialist times it was the policy of the Government of India to impose a ceiling on the amount of land a farmer could own and the surplus land was supposedly distributed to the landless and the poor. This would have provided a decent income to small farmers if we had invested in irrigation. But, even in an agricultural state like Haryana, there have been no new canal systems built since the British left. And now, comes a new problem. In this unreformed, corrupt, desperately poor landscape that is Indian agriculture has appeared the corporate farmer. Huge corporations are moving in to invest in contract farming. This may nullify the purpose of land reforms but it might bring prosperity and investment.
Meanwhile, can we hope that someone sitting in the Ministry of Agriculture in Delhi will notice that if they remove licensing in the building of warehouses it could make a huge difference? Before we begin to think of the massive reforms that need to be made in agriculture we would be spared the horrific sight of food grain rotting in the open every time the rains come. Warehouses would come up by the hundreds of thousands if they could be built without a license. They do not cost much to build and it would be in the interest of farmers to see them built.
-Talveen Singh
It is an extraordinary paradox created by a rigid regime of subsidies for grain farmers, a woeful lack of storage facilities and an inefficient, corruption-plagued public distribution system that fails millions of impoverished people.
And it is an embarrassment for the government led by the Congress party, which returned to power in 2009 thanks in large part to pledges of welfare for the poor, who make up about 40 percent of the 1.2 billion population.
Quite why the authorities could not simply offload the mountains of grain for free to fill empty stomachs is puzzling, but the explanation lies in the complex regulations that govern procurement and distribution.
"This is a case of criminal neglect by the government," said D. Raja, national secretary of the Communist Party of India, an opposition group. "The ruling party has been the worst manager of the demand-supply of food grains."
Officials say that, in all, about 6 million tonnes of grain worth at least $1.5 billion could perish. Analysts say the losses could be far higher because more than 19 million tonnes are now lying in the open, exposed to searing summer heat and monsoon rains.
Saddomajra, a village in the bread-basket, Punjab, is one of the dumping grounds for the record stockpile of wheat that has accumulated after half a decade of bumper harvests in the world's second-largest producer of the grain.
Here there are thousands of sacks of decomposing wheat, occupying an area the size of a football field and towering in some places to the height of a house. Tarpaulins cover most of the mounds, but many of the bags are torn, spilling blackened grain blighted by fungus and insects.
"The wheat has been lying there for the past five years. It smells very bad," said Hakkam Singh, who works as a watchman at the open field. "Nobody steals it, but people use it to feed fish and poultry farms."
At another dump, on the outskirts of Amritsar, locals told Reuters that officials sometimes dip into the sacks of rotting grain to mix it with fresh wheat for distribution to the poor who hold ration cards.
WHEAT STOCKS AT ALL-TIME HIGH
The government buys rice and wheat from farmers at a guaranteed price, a support system akin to the subsidies that led to Europe's notorious butter mountains and milk lakes.
The government has raised the price it pays to buy wheat by more than 70 percent since 2007, which only encourages more production. As a result, stocks are now at an all-time high of about 50 million tonnes, 12 times more than the official target.
"It's related to pure economic security for the farmers," said Purnima Menon, a research fellow at the International Food Policy Research Institute in New Delhi. "They make a safe choice of crops."
Rajiv Tandon, a senior adviser for health and nutrition at aid organisation Save the Children in India, said that to diversify the country's food basket farmers should be offered incentives to grow vegetables and other cash crops.
However, he said root-and-branch modernisation is needed. The farm sector was transformed by the introduction of high-yielding seeds, fertilisers and irrigation during the Green Revolution nearly half a century ago, ending a dependence on imports, but it has seen only incremental reform ever since.
Storage is one of the biggest problems of all.
"For the last 25 years the storage capacity has not been upgraded at all," Tandon said. "Part of the grain is officially stored outside store houses, where the chance of rotting is high. There are often not enough sacks and tarpaulins, and sometimes it is dumped by a graveyard or cremation centre."
Grain stocks officially deemed as stored in government warehouses now stand at a record 82.4 m illion tonnes. However, that is about 20 million tonnes more than actual capacity, which means grain lying in the open is being passed off as "stored".
WHO WILL BUY?
State-run Food Corp. of India (FCI), the main grain procurement agency, buys about one-third of total wheat output to run welfare programmes and keep stocks for emergency needs.
What to do with the rest is a conundrum for the government, which is reluctant to sell wheat for less than the inflated support price it paid to farmers because it would put further strain on an already hefty fiscal deficit.
Recently it offered 6 million tonnes of rice and wheat to state administrations for the poor at cheaper rates, in addition to 55 million already earmarked for financial year 2012/13. But there were not many takers because state governments are grappling with budget overruns themselves.
Exporting wheat is not an attractive alternative.
After buying wheat from farmers and adding freight, storage and transport costs, the free on board (FOB) price is around $346 a tonne. However, Indian wheat would only be competitive in the export market at around $260, which implies a loss - effectively a further subsidy, and this time to consumers in other countries - of $85-90 per tonne for the government.
The brimming granaries forced India to lift a four-year-old ban on private exports last September, but lower global prices have scuppered those plans.
Traders say that even if India went all-out to export wheat it could at best sell 6-7 million tonnes a year because of transport bottlenecks and doubts about the quality of the grain.
New Delhi is considering the export of up to 3 million tonnes of wheat to sanctions-hit Iran, but traders say Tehran will not be falling over itself to buy because of concern that Indian grain may be tainted by fungal disease.
Last month the government decided to offer 3 million tonnes of wheat to local biscuit makers and flour millers at $205 a tonne against the $225 it paid to farmers in 2012.
"Subsidising our bread and biscuit makers is easier than subsidising consumers of other countries," said a senior government official, who did not wish to be identified due to political criticism of a solution to the surplus that benefits private companies rather than the poor.
In China, a large portion of wheat stocks are channelled into the country's rapidly expanding animal feed sector, replacing more expensive corn. However, India has an exportable surplus of corn and its meat consumption is far lower, so there is little demand for wheat as a replacement for other grains.
"NATIONAL SHAME"
A government-supported survey published earlier this year found that 42 percent of India's children under 5 are underweight, almost double that of sub-Saharan Africa. The finding led Prime Minister Manmohan Singh to admit that malnutrition was "a national shame".
The cause of this widespread malnutrition cannot be tied mechanically to a lack of staples like rice and wheat.
Indeed, many families living on less than $2 a day are fuelled and filled by subsidised carbohydrate-rich food like wheat chapatis. These lack the much-needed protein and other nutrients that come in more expensive food. Poor hygiene and contaminated water are also to blame because they cause illnesses like diarrhoea, which prevents nutrient absorption.
Still, there are real grain shortages in the poorest states.
Here the problem is an inefficient and corruption-prone distribution system. Eighteen months ago investigators said millions of dollars worth of grain meant for poor families had been siphoned off and sold locally and abroad in a scam involving hundreds of government officials.
In 2010 the Supreme Court urged the government to distribute grain free to the hungry rather than let it go to waste in warehouses and open fields, but that hasn't happened.
This is because state governments are reluctant to buy extra grain for distribution under the food welfare programme and, even if they were, only people with under-the-poverty-line ration cards would be entitled to buy it in subsidised shops.
"The problem of rotting grains and the poor going hungry lies in the system itself," said Biraj Patnaik, principal adviser on food issues to the court.
The government is now planning a food security scheme that will guarantee cheap grain to 63.5 percent of the population.
However, critics see this as political gimmickry. They doubt that the new scheme will be less corrupt, more efficient or better targeted than current programmes, and they suspect that the government will not be able to afford a plan that may cost as much as $12 billion in additional subsidies a year.
(Writing by John Chalmers; Additional reporting by Ajay Verma in SADDOMAJRA, India, by John Chalmers, Satarupa Bhattacharjya and Ratnajyoti Dutta in NEW DELHI and by Naveen Thukral in SINGAPORE; Editing by Jeremy Laurence)
-Reuters
Food grains rot in the open as prices rise
SC says it is a crime to waste food when people die of hunger
It has taken the Supreme Court, and not the government, to point to a looming catastrophe when on Tuesday it expressed serious concern over the rotting of thousands of tonnes of food grains. A Bench of Justices Dalveer Singh and Deepak Verma admonished the government for its lackadaisical attitude in preserving precious food grain. They said: “If you cannot store them (food grains), give it to the people to eat.”
The Supreme Court’s observations come at a time when people across the country continue to reel under the unending pressure of the rising prices of essential commodities, including food grains and vegetables. The government has not been able to check the runaway prices of essential commodities.
The apex court’s stand on the issue coincided with Food and Agriculture Minister Sharad Pawar’s immodest admission in the Lok Sabha that over 11,700 tonnes of food grains worth Rs 6.86 crore was found “damaged” in government storage facilities. “Reports have been received about damage to wheat and rice stocks in Food Corporation of India depots in some towns of Uttar Pradesh,” Pawar said.
According to data submitted by Pawar, the maximum damage of 7,066 tonnes of foodgrains was reported from Punjab, followed by 1,846 tonnes from West Bengal and 1,457 tonnes from Gujarat. Of the food grains damaged, 9,141 tonnes was rice while 2,486 tonnes was wheat, and the remaining 81 tonnes was paddy.
While hearing a public interest litigation filed by the People’s Union for Civil Liberties, the Supreme Court said: “It is a serious problem and we are sure the government has identified it. However, we do not see any effective steps taken to solve this problem. Committees have been formed and various resolutions have been passed. But there is no implementation of the decisions taken.”
In its ruling, the Bench said that in a “country where admittedly people are starving, it is a crime to waste even a single grain. The official statement made by the government indicates that there is wastage of food at many places.”
The court advised the government to “consider constructing adequate warehouses or storage facilities on a long-term basis.”
It suggested that it can, “on a short-term basis,” also consider hiring warehouses or putting up waterproof tents to save the grain and that “all-out efforts must be made to ensure that not a single grain is wasted.”
Directions
Even as Additional Solicitor General Mohan Parasaran assured the Bench that steps would be taken to address the issue, it sought a response from the union food and civil supplies secretary within two weeks and asked the government to discontinue supply of subsidised foodgrains to people above poverty line. It also directed the government to provide food grain according to the size of the family among below poverty line card holders.
The judges suggested that the public distribution system should be computerised to avoid pilferage and corruption, that the system should be linked to the Unique Identification Authority of India and fair price shops should be operated by government bodies rather than private agencies.
The court’s attention to the grave situation was drawn by advocate Colin Gonsalves, who pointed to a report in a newspaper, saying that a large quantity of grain was being wasted as the government did not have any facility to store it.
He cautioned that if the grains were left to rot in the open for six more months, they would not be fit even for consumption of cattle.
In its observations, the Bench also asked the Centre to furnish its reply to the report of the Justice Wadhwa Committee which was set up to look into the causes of starvation deaths. The Wadhwa panel had recommended construction of warehouses for storing foodgrains.
DH News Service
-DeccanHerald
Must prevent food grain rotting in the open
One of the things that make me very angry is the sight of bags of food grain rotting in the open. It reminds me every time that 45 per cent of India’s children are malnourished, which translated into more simple language means that, every second Indian child goes to bed hungry at night. This shameful fact made the Supreme Court (SC) angry enough to demand that the government distribute the grain to the poor, rather than let it rot in the open or be eaten by rats.
Unfortunately, the Government of India referred the matter to Sonia Gandhi’s kitchen cabinet, the National Advisory Council, who have come up with another one of their amateur solutions in the form of a Food Security Bill that, when implemented, will do no more than create fresh channels of corruption. Keeping in mind that, according to most experts, more than 60 per cent of food grain distributed through the Public Distribution System ends up in the wrong hands and you will understand what I mean. Sonia’s NAC plans to use this very leaky distribution network to distribute its free food grain. Surely, it would have been wiser to suggest a more effective way of distribution before pouring more food grain into a system that leaks like a sieve.
The license raj
Last week, when the monsoon reached northern India, we saw pictures on television of huge stacks of grain rotting in the open and once more. Our news channels have played a stellar role in highlighting this shameful waste of our rice and wheat supplies. Looking at the pictures, I found myself not just angry but seriously puzzled about why we cannot build enough warehouses? My brother is a farmer in Haryana where 20,000 tonnes of wheat lies in the open because the Food Corporation of India (FCI) has not yet managed to transport from its limited warehouses, more than 80,000 tonnes of rice stocks. According to a recent story in the Indian Express, stocks of food grain lying in the open across the country has doubled in the past three years, while the FCI’s covered storage facilities have remained the same in more than five years.
To find out why it is so hard to build warehouses, I rang my brother and asked him to make some inquiries. He is well-connected with local farmers in his village and with other people in the agricultural community, so it did not take him long to find out that one of the reasons why we build warehouses at such a slow pace is because to build one you need a license and to get a license you need to pay a bribe. This piece of information interested me and I made further inquiries that revealed that the biggest problem in Indian agriculture is that the license raj continues to be alive and well. There have been no attempts to end the license raj because over the past 60 years, huge vested interests have developed in the limitless channels of corruption that the license raj generates. It is really no different to the state of Indian industry before the economic reforms began in 1991. Except for one grim difference. Industrial licenses strangled enterprise and kept India poor, but it did not cause starvation and suicides. The license raj in agriculture could lead to farmers giving up farming for other jobs and then who would grow the wheat and rice for us?
If you think this is an exaggeration, pay attention to the figures I am about to give you. They come from Haryana where irrigated land is widely available and even here the most that a farmer can make out of an acre of land is Rs.30,000 a year. But, if his land happens to be on the edge of some spreading urban centre he could sell it for as much as Rs.25 lakhs an acre. Why should he waste his time farming?
Not only has there been no reform in the agricultural sector, the government has done almost nothing to build the infrastructure which is so essential if farming is to be a profitable business. If farmers grew cash crops like fruit and vegetables they could become quite rich, but just as we have not bothered to build warehouses we have not built sufficient cold storages. According to expert estimates, more than 40 per cent of the fruit and vegetables that Indian farmers grow rot in the fields. This is believed to be more than all the fruit and vegetables that are produced in the United Kingdom every year. For the situation to change we need rural roads that provide speedy access to markets.
Apathetic government
Most land holdings in India are very small. Five acres is considered a big land holding. Compare this with the United States where the average size of a farm is 418 acres. In socialist times it was the policy of the Government of India to impose a ceiling on the amount of land a farmer could own and the surplus land was supposedly distributed to the landless and the poor. This would have provided a decent income to small farmers if we had invested in irrigation. But, even in an agricultural state like Haryana, there have been no new canal systems built since the British left. And now, comes a new problem. In this unreformed, corrupt, desperately poor landscape that is Indian agriculture has appeared the corporate farmer. Huge corporations are moving in to invest in contract farming. This may nullify the purpose of land reforms but it might bring prosperity and investment.
Meanwhile, can we hope that someone sitting in the Ministry of Agriculture in Delhi will notice that if they remove licensing in the building of warehouses it could make a huge difference? Before we begin to think of the massive reforms that need to be made in agriculture we would be spared the horrific sight of food grain rotting in the open every time the rains come. Warehouses would come up by the hundreds of thousands if they could be built without a license. They do not cost much to build and it would be in the interest of farmers to see them built.
-Talveen Singh
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