04 April 2014, 02:29 PM IST
In the first part of this post yesterday, I wrote about the colossal mismanagement and callous neglect of food storage during the last decade of UPA.
In this part, what can be done? How do we prevent food from rotting? How do we ensure it reaches the people who need it the most?
How do we leverage the enormously fertile and productive land mass that India is fortunate to be blessed with?
There are at least two areas which need to be tackled as a matter of urgency. In fact, I think they should be considered matters of national priority. The first is a massive increase in covered storage capacity - at least doubling the existing storage, ideally more than that so enough buffer stocks can be maintained.
At less than 50m tonnes, India's current covered storage capacity is woefully inadequate to handle even a normal monsoon. In July 2012, Ashok Gulati, Chairman of the Commission of Agricultural Costs & Prices (CACP) noted that "Grain stocks with state agencies are likely to cross 75 million tonnes some time in June 2012, while covered capacity to store is less than 50 million tonnes".
In April 2012, an internal FCI note accessed by ToI revealed that "By June, when monsoon begins to lash across the country, 231.82 lakh tonnes (23.2 million tonnes) of wheat will be lying under the sun on the plinths in the three states (Punjab, Haryana and MP)... It is clear that FCI and the state agencies will be faced with unprecedented problems of shortage of storage capacity resulting in large stock of wheat in CAP (kept in open plinths covered with tarpaulin) in Punjab, Haryana and Madhya Pradesh."
The report went on to warn, "...substantial quantity may have to be stored in unscientific plinths".
In October 2013, the Minister for Food and Public Distribution was quoted as saying we need 85 million tonnes of storage capacity by 2014 (in light of the Food Security Bill) but the current availability is only 78 million tonnes.
A July 2013 report noted that India needed to increase its present storage capacity by at least 70% to maintain buffer stocks to ease price fluctuations. "But (to add this capacity) assuming no change in the pace at which India has added storage capacity in the recent past, it will take 19 years."
In a report submitted to Parliament in May last year, the CAG noted how "..nearly 50 percent of the foodgrain does not have any storage space."
Increasing storage capacity must therefore become a national priority. But that alone will not be enough. Alongside, we need a complete overhaul of the public distribution network (PDS) for food.
Just how bad is the situation?
"(a)..recent study...shows that 67% of the wheat meant to reach the poor end(s) up missing the target, being pilfered or sold on the open market en route." This is Government of India's Chief Economic Adviser Kaushik Basu. On record.
To most Indians, this is not news. What might be news is how "..110.6 million kilograms of wheat and rice meant for India's poor was transferred from rail stations in Sitapur district (in UP) to Bangladesh.." and in some transactions, to Nepal. This was just over a three-year period (2004-2007).
Dr JP Narayan estimates "nearly 40% of the food grains in PDS are 'recycled' because of price distortion, and go back for sale to FCI".
Thanks to this supremely inefficient and leaky PDS, the government incurs costs of Rs 28 per kg to distribute rice at Rs 5/kg! This candid (and public) admission came from the Minister for Food and Public Distribution himself.
In an article for ToI last year, the Chairman, CACP, while highlighting the need to modernise logistics, mentioned how the situation is made worse by "(an) acute shortage of railway wagons at the time when grain needs to move from one state to another." This shortage of wagons – which was in the order of 10% in 2006-2007 - had by 2011-12, shot up to 17 percent. Inability to move large stocks of grains rapidly has the direct consequence of putting enormous strain on the storage capacity (inadequate, as it is) and compounds the problem of rotting grains.
A focus on these two dimensions - increase in capacity and overhaul of logistics - can transform the situation and help get us out of the current crisis. Longer term, more needs to be done.
Such as freeing up exports to help reduce stockpiles in case of a bumper harvest, freeing up retail trade and removing barriers & levies on food transport.
But what would help most is the government "getting out" of agriculture.
Getting out of controlling markets (almost 90% of grain trade today is under the control of government). Getting out of practices such as obligatory procurement (did you know that "Under the FCI Act, the government is obliged to buy all the wheat, whatever the quality, that comes to the mandis.."?).
And abolishing price controls. These are things that would really help - not just farmers but consumers too. This is the only way to avoid a worse situation down the line. And unless there is prompt action, we will continue to witness the tragedy of farmers committing suicides, grains rotting in the rain and perversion of the public distribution system.
Hopefully somebody is listening. Somebody who can take bold and decisive steps to solve India's grain storage crisis. That would be true "Bharat Nirman". Jai Hind, Jai Bharat!
Track me on Twitter @SatyamevaJayate
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