MNC RETAIL GIANTS-INDIA TO "BEND" THE FDI POLICY FURTHER?

After the euphoria about the likely massive inflow of foreign investment in multi brand retail market operations in India, the earlier enthusiasm seems to be fading in the light of the prevailing ground realities in the country. Many critics raised the issue regarding the adverse impact the new policy would have on the 8 million and odd domestic traders and small stores because of the deep pocket the MNCs have in aggressively pushing their agenda. Eventually it was feared that millions of people would be deprived of their livelihood by the modern air conditioned super markets and malls that may come up under the aegis of internationally established and recognized brands. Now comes the news that some of the major global players are putting pressure on the Government to modify the policy and they seem to be "concerned" about the preconditions like mandatory procurement of 30% of their products from local sources and investment requirement on back-end operations, the very heart of the policy to protect the local interests. Here is a take on this "behind the scene" maneuvering going on at Delhi to influence the government!

"Among the norms making global players jittery are the 30 per cent mandatory sourcing from small and medium enterprises, at least 50 per cent investment in back-end infra and state-wise approvals. The government's stand on not allowing FDI in e-commerce is also seen as a hurdle, as most foreign chains have been pushing the on line format to cut cost and beat competition. According to highly-placed sources, the French retailer, which was keen to expand India footprint from being just a cash-and-carry (wholesale) player, is now "going slow" and might even decide to "review" its investment plans, if things didn't go according to its expectations. Top Carrefour representatives, in their meetings with the government, are learnt to have demanded certain significant changes in the policy. To address foreign retailers' concerns and to woo them back, the commerce ministry is understood to be planning to issue a comprehensive clarification. Asked if the company was reviewing its India plans and had conveyed its disappointment to the French and Indian governments, Carrefour's India spokesperson said the company had "no comments" to offer. Besides India, where it only has cash-and-carry operations, Carrefour is present in two other Asian markets - China and Taiwan. As of December 2012, it had 218 hypermarkets in China and 61 hypermarkets and three supermarkets in Taiwan. Over the past few months, it has withdrawn from key Asian markets like Singapore, Malaysia and Indonesia, to reduce debt and generate cash flow. Among other geographies, it has exited from Colombia and cut stake in Turkish business, triggering speculation it might withdraw from there, too. In India, Carrefour runs a fully-owned cash-and-carry business, with four wholesale outlets - one each in Delhi, Jaipur, Meerut and Agra. It has yet to identify an Indian partner for retail operations.On the other hand, the US' Walmart, which has 20 wholesale outlets in India under a 50:50 joint venture with Bharti, is expected to extend the partnership for front-end retail, too. The UK's Tesco has a franchise agreement with the Tata group for back-end and wholesale; these two are also likely to extend the partnership for retail"

Whether government will buckle or not remains to be seen. However one thing is clear about the so called "muscle" of MNC retailers which was feared to annihilate the poor "mom and pop" stores round the corner of ever street in the country. In spite of massive efforts and investments by many industry giants who entered the retailing sector during the last one decade the organized players have not been able to capture even 5% of the business generated by this sector! Only future will tell whether MNCs will be able to fare better than their domestic counterparts. If government does relax the provisions related to domestic procurement and investment in back end infrastructure, it does not need any extra intelligence to predict that India will be swamped by cheap Chinese products sounding a death knell for the domestic players. Already Chinese products are dominating the markets for many consumer products but food products from China are yet to make a mark. One can only hope that government will stick to the original policy without bending backwards to the clout of some of the retail giants who are eying the lucrative Indian market. 

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

CRAZY IDEAS FOR CRAZY SITUATION!-SUGGESTION FOR FOOD STOCK LIQUIDATION

Food grain surplus available with Government of India is increasing every year due to the diligence of the farmers and decent procurement prices ( MSP) offered to them. On one hand MSP provides the farmer a safety net so that he is not exploited by the traders while increasing flow of grains into government granaries is creating an infrastructure jam in the form of inadequate safe storage facility and lack of quality and management factors. In spite of strictures from the Supreme Court on the wastage of grains year after year, very little has been achieved so far address the storage problem. Suggestions are made from time to time regarding the best way to get rid of the stored grains held beyond the food security linked storage level though Government is still not sure as to how this food surplus is to be tackled. Latest view on this subject is bizarre in that it suggests that eligible consumers are to be supplied with their 3 years' grain requirement at one go to get rid of the grain stock! Here is a take on this "hilarious" suggestion.      

The paper noted central agencies had excess stock even after taking into account what was needed for the FSB. The authors calculated that stocks with the Food Corporation of India (FCI) would be in excess of 30 million tonnes as on July 1. The value locked in these ranges from Rs 70,000 crore to Rs 92,000 crore. The paper suggested states where the Public Distribution Systems have been integrated with Aadhaar, the citizen identification number, be allowed to lift 36 months of their off take requirements at a discounted price. The discount, the authors suggested, would be equal to the cost of carrying by FCI. These states can ask consumers to lift their 36 months' quota at one go, with a discount on the PDS price. That way, consumers can get a larger quantity of grain and FCI would have more storage space. One of three other alternatives suggested is an open market sale scheme at last year's MSP, beside a maximum of five per cent taxes, cess and others.

Those who make the above suggestion must be out of their mind because they have no idea as to what will happen to the quality of grains if they are stored at the consumer end. Food grains are vulnerable to infestation by insects, prone to attack by rodents and can cause irreversible changes in quality and nutrition progressively with time. Even the FCI, government's food grain procurement and storage arm finds it difficult to prevent spoilage in spite of their scientifically constructed storage structures and how can one expect that a family can keep the grains safe for 3 years? One should not forget the oft repeated claims by food experts that post harvest food losses in the country can be any where from 25% to 40%! Both Planning Commission as well as the government officials including the Prime Minister routinely talk about such food wastage in the country though at the ground level not much is being accomplished to save these grains from spoilage! This suggestion is outlandish and it only will enable the government to shift its responsibility of protecting the food to the poor citizens.  

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

STREET VENDORS IN INDIA-THE ELECTION EVE ATTENTION FROM THE GOVERNMENT!

World over street foods are offered from the side pavements of many roads in major cities and towns where real estate is exorbitantly expensive and non-affordable to most small scale food vendors. It is true that this is a despicable practice due to its nuisance value to the citizens who are forced to walk on busy roads endangering their lives in the process. From time to time eviction efforts are made by the civic authorities but without much lasting success. Though most street vendors are supposed to be poor, they bribe the police as well as the civic officials to continue with their business without any harassment and hindrance. Since this sector has grown rapidly due to the affinity of even well to do citizens to the hot foods served by them on the road side, wishing away this phenomenon is no more possible and it has assumed a different dimension from a humanitarian angle. It is unbelievable that in India there are about 10 million hawkers across all the cities and towns doing a thriving business and since they constitute a sizable vote bank, the present political dispensation ruling in the country, in a desperate effort to expand its vote bank,  has cast its eyes on this group promising many things to attract their loyalty. A bill to offer many sops to these vendors has been just cleared by the government which is sought to be rushed through the Lok Sabha shortly. Here is a take on this new "sop avatar" being pushed through hastily for reaping the "harvest" in the forthcoming national election.

Ahead of the 2014 elections, the UPA government on Wednesday offered a major sop to the about 10 million street vendors across India – a part of its targeted aam admi vote bank. After hanging in fire for over a year, the Union cabinet cleared the Street Vendors (Protection of Livelihood and Regulation of Street Vending) Bill, which once enacted will go a long way in protecting the rights of vendors by giving them legal protection. Presently, there is no law to regulate and safeguard the interest of urban street vendors in India The bill mandates municipalities to set up restriction free vending zones/ night bazaars where hawkers can sell their wares without being harassed by the authorities. Town vendor's committee which will have representatives from municipalities as well as vendor associations will demarcate space where vendors can operate. The Housing & Urban Poverty Alleviation ministry which is piloting the bill intends to introduce it in the ongoing budget session of the Parliament. However, it looks unlikely with the opposition continuing to disrupt the session. The bill will allow anyone over 14 years to apply and register as street vendor on payment of one time fees. Once registered, the vendors would be given identity cards entitling them to sell their wares in specified vending zones. It will do away with the existing license system that has become a tool of harassing the street vendors. In a city, 2.5 % of the total population would be eligible to register as street vendors. Besides, it will also help authorities regulate hawking activities in public spaces such as pavements, parks, and thoroughfares. The bill was earlier introduced in Lok Sabha last September and was subsequently referred to the Standing Committee on Urban Development. The committee which made several recommendations such as allowing vendors outside railway stations to be included under the bill's ambit were incorporated by the urban poverty alleviation ministry in the draft bill that was cleared by the cabinet Wednesday.

It was almost 25 years ago that the issue of street hawkers was brought to national attention and a few NGOs did try to bring in reforms to streamline the vending kiosks emphasizing on hygiene, sanitation and consumer safety. Many civic bodies introduced a sort of licensing and monitoring their activities through their health department officials. Even international attention was focused for some time on street vending which is prevalent in many countries in Asia and lot of efforts were made to "modernize" the kiosks with emphasis on cleanliness, safe water use and strict personnel hygiene. The present Bill is a good initiative and if properly drafted to cover the entire gamut of the issue, it can be a significant step in creating a win-win situation to both the vendors as well as the consumers. Unfortunately political chicanery to steal credit may yet derail the Bill. It is imperative that all political parties irrespective of their color or creed or biases contribute in refining the Bill so that it is practical, useful and of immense benefit to the urban consumers.    

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

          

IS THE FOOD GRAIN POLICY OF GOI IN SHAMBLES? APPARENTLY SO!

Many international experts believe that India has reached a tipping point as far decision making is concerned and if GOI does not face the daunting task of addressing the grain surplus on its hands, future governments and the nation will have to pay a heavy price for shirking the responsibility. Shockingly the very fear GOI is having regarding food inflation if massive export is allowed right now is going to haunt it later because locking up the grains under unsafe conditions and starving the market can lead to only sharp increase in prices which is already being experienced by the middle class population most of whom will have to depend on free market grains for their day to day sustenance. With the general election due any times now, sooner this policy jam is removed better it will be for the country at large. Here is some critical commentary on this vexatious issue now being faced by the country.   

"India should adopt an 'open' policy for food grains exports so that small farmers are benefited from prevailing higher global food prices, Shenggen Fan, Director General, International Food Policy Research Institute (IFPRI) on Friday said. India must also reduce rising food subsidy by 'better' targeting of Public Distribution System, Fan observed. "At present the PDS is not well targeted which is leading to pilferage of food grains. By reducing food subsidy, more financial resources could be allocated for research and development in agriculture," Fan told FE. "India being the biggest the rice exporter must have an open export policy for increasing farm income realistion ," Fan commented. India has emerged as the world's biggest rice exporter in 2012 surpassing Thailand with shipment of around 10 million tonnes after a four year old ban on rice exports were lifted in 2011. He said China may increase the volume of rice import from India in coming years because of rise in cost of farm production. China's total rice import was 2-3 million tonnes from Vietnam and India last year. "It is just a beginning and China's rice import from India could enhance in the coming years with cost of labour, water and land increasing. Also, it is cheaper to import food grains from India instead of providing subsidies to farmers," Fan, the head of the key global think tank observed India has a huge food grain stocks – mostly rice and wheat, due to bumper production last year. The rice and wheat output was reported at record 104.32 million tonnes and 93.90 million tonnes, respectively. Due to US drought, the global food prices are expected to higher and volatile during the year, He said due to uncertainty in supplies of wheat, corn and other crop because of drought in many parts of the world is expected to keep supplies situation 'volatile'. "We need stability in higher food prices as because of lack market access small farmers have not been able to take advantage of the prices," Fan said while predicting that global food prices during the year will be 'high and volatile'.On level of poverty in Asian countries like India and China, Fan observed, "The region as a whole is not on track in meeting the millennium development goal (MDG) of cutting the rate of undernourishment by half between 1990 and 2015." "India accounts for some 217 million or a quarter of all undernourished people globally. As a result, India is likely to miss the MDG target," he said. Calling for hiking investment in the agricultural research, Fan observed that agricultural spending in research and development generally has the largest positive effects on growth and poverty reduction. "For each unit of local currency spent on the agricultural R&D, on average 11 local currency units are returned. For every rupee invested in agri-research in India,Rs 13.5 is returned," a IFPRI study has stated. "Indian government should increase investment in agriculture, rural infrastructure and education as these have high payoffs in terms of raising smallholder farmers' productivity and incomes," Fan noted. 

The argument that India must invest more on agricultural research is well reasoned one and to add to this it may be appropriate that more focus is made on pulses and oil seeds, both in tremendous short supply currently. According to dispassionate observers GOI's obsession with crops like cereals, sugarcane and other crops, ignoring the precarious situation vis-a-vis pules and oil seeds can further exacerbate the food security problem in the coming years. A population fed on a predominantly carbohydrate diet cannot be expected to be healthy as per present nutritional norms. It is time GOI addresses these issues without losing further time and take a long term agricultural policy decision based on domestic food needs and export potential for commodities in which the country has excelled itself.  

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

THE SUGAR "CIRCUS"-A QUESTIONABLE GOI DECISION

Decontrol of sugar from the clutches of GOI was on the card for the last one decade though a vacillating government was not able to take courage in its hands due to political reasons. The recent announcement that the GOI would free the politically powerful sugar industry from the levy policy, whereby mills are forced to sell their products as per the quota fixed from time to time decides by GOI, must be a music to the industry. Whether this new policy will be accepted by the states will have to be seen because they are bound to buy the sugar from the industry at market prices for supply through the PDS at subsidized prices, expecting to be reimbursed the difference by the Center. Whether this is a industry friendly policy or the one that is favorable to the citizen is a matter of conjecture though prima facie industry is going to be largest beneficiary under the new policy. The new policy which is just approved may still be stillborn and one has to wait and see whether it will be implemented in toto. Here is a take on this new significant development.

"According to a mechanism approved by CCEA, states will now purchase sugar from open market through a transparent bidding process and sell it cheap through ration shops. The difference between the two prices will be borne by the Centre, but with a cap of two years. "According to our estimate, the current market price of sugar is Rs 32 per kg, while the price under the public distribution system (PDS) is Rs 13.50 per kg. This difference between these two prices will be paid to states. For this, the Centre will bear an additional subsidy burden of around Rs 2,700 crore," Food Minister K V Thomas told reporters after the meeting. He also assured there would not be any increase in the retail sugar price, as ample sweetener was available in the market. However, if the difference between market price and ration price rises during two years (up to September 2014), the extra burden would have to be borne by states. The sugar season runs from October to September." 

It is rather intriguing as to why GOI is so much fixated on a commodity like sugar which is now considered as "white poison" by the health experts and which has made a country like the US a morbid one with obesity and diabetes widely prevalent. While under the proposed Food Security Bill a substantial segment of country's population is being guaranteed of their basic needs of food calories through heavily subsidized grains which is understandable to some extent, subsidizing sugar cannot be justified in any manner considering that it is not an essential food for survival.  If one extends this logic there is no justification under any "National Agricultural Policy" in wasting precious land, water and other resources on sugar cane which is depletes the soil of its natural nutrients fast. A more logical alternative option could be to divert most of the land presently being cultivated with sugar cane for producing pulses and oil seeds in a phased manner.  

V.H.POTTY

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A PRESIDENT'S NOSTALGIA!-THE "SLUG" STILL CRAWLS!

A former minister, in his new avatar as the latest  President of this country recently had a chance to say some thing about Indian agriculture which is interesting to hear. It is a pity that after practically wasting 65 years since independence, now comes the realization that the country's agricultural situation is not good and the farmers in this country are not well off! Being a part of the so called planners for almost 5 decades, now turning around to blame the very same planners for not achieving prosperity through more farmer oriented programs with significantly visible impact is some what far fetched which may sound hollow. Still the fact uttered by him is 100% correct and the country must introspect as to why farmers are committing suicide in droves in spite of trillions of rupees pumped into the economy in the name of farm subsidies. Every government with a tenure of five years does not take seriously long term needs of the country, being busy managing day to day chores that will not precipitate any immediate crisis! Here is the statement of the President in a conference in Ludhiana which tells its own story.  


President Pranab Mukherjee on Tuesday underscored the need for a rethink on the agriculture policy to ensure food security in the country and meet key challenges in the farm sector. Addressing an assembly of academia and experts at the international conference on 'Sustainable Agriculture for Food and Livelihood Security' organised by Punjab Agricultural University to mark its golden jubilee, the President sought to know why despite an overall improved growth scenario in the country, economic viability of agriculture sector continued to be a challenge. He asked policy planners to ponder as to why prosperity eluded a large part of the agriculture sector despite government programmes and schemes that were backed by efforts of the scientific and corporate community. "We must have in place a coherent and comprehensive policy that has synergy among its elements. Government initiatives are of little use without efficient system for their implementation. Equally important is the necessity for collaboration between the state and Central governments on monitoring and appraisal of various schemes. A coordinated and integrated approach should start at the grassroots," he said.

if politics were not injected into the rural sector, especially in a country considered grossly under developed viewed from literacy angle, it takes lot of dedication, hard work and commitment to develop rural agriculture. A prospective but dynamic policy frame work with clear cut long term goals and mode of action must be evolved that will keep in view country's food needs while farmer prosperity is not jeopardized. If the farmers are happy the country will be well off without any foreign prop. What prevents succeeding governments from formulating such a policy is still a mystery. Funds are available, land is plenty, farmers are hardworking, consumer demand is high, private entrepreneurship is commendable and modern technologies are continuously being developed but still the country is just limping along with mediocre performance in farm sector. If President's words are sincere he must energize his government in evolving a dynamic farmer driven agricultural policy that will bring further prosperity to this country.

V.H.POTTY
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http://foodtechupdates.blogspot.com

POLICY PARALYSIS-IMPACT ON FARM FRONT

The present government in India is being criticized by many dispassionate observers for not taking right decisions at right time on many issues leading to distortions in the development of the country. This situation often described as "policy paralysis" can have long term consequences on the orderly progress of the nation affecting the lives of the 1.2 billion plus people inhabiting the country. There is no unanimity within the government itself as reflected by the divergent views expressed by the ministers on many issues that concern the nation. Latest to come to the fore is regarding the export policy which is causing lot of heart burns among some sections of farming community. Whether it is the wheat, sugar or cotton, government invariably takes long time to decide what to do with the surpluses putting every body involved in unnecessary suspense, some time causing economic losses in the process.  Recent open letter by the Agri Minister to the Prime Minister criticizing some of his own colleagues is a classical example of such a policy paralysis whereas what is needed is a dynamism to address the issue promptly before any damage is done. Here is a take on this episode which could have been avoided if there is a vibrant government sensitive to the needs of the country. 

"Irked by curbs on milk, cotton and sugar exports, Agriculture Minister Sharad Pawar has shot off a letter to Prime Minister Manmohan Singh stating that the government's policies are hurting farmers who are being asked to subsidise the industry. Pawar wrote to the Prime Minister yesterday, a day after group of ministers disallowed cotton export beyond 13 million bales for the current marketing year. He strongly criticised Food Ministry headed by KV Thomas and the Textile Ministry under the charge of Anand Sharma for the policies which are "ambivalent" and go against farmers. Describing restriction on cotton exports as "retrograde", the NCP chief said: "Indian cotton farmers should not be asked to bear the burden of subsidising the textile mills. "Compromising the interest of small cotton farmers to benefit the textile magnates is indeed a travesty of justice. Moreover, it defies logic to permit the consumer of cotton (textile industry) to dictate terms to cotton producer...". Similarly, he said the "negative approach" of the Food Department in allowing sugar exports has led to heavy losses in export earnings which could have been used to clear cane arrears to farmers that have crossed Rs8,000 crore. Pawar told the Prime Minister, "On numerous occasions I have discussed with you the need to have farmer-centric agriculture policy...On each of these occasions, I have found you in consonance with these ideas. "However, despite this our government has time and again taken decision which go against the interest of the farming community and adversely impacts its growth and stability". High input cost and low realisation from his produce has pushed the farmer into a corner where he fights for his survival, he said, underscoring the need for a free trade regime to ensure a remunerative prices to farmers".

Whether farmer or consumer is supreme is a question that must be haunting the government as any action taken in agricultural front should be equitable to both. Inordinately high prices paid to the farmer can have negative consequences on the consumer in the form of high food inflation making the lives of many poor citizens miserable. Similarly unduly favoring the consumers by depressing the prices of agri commodities will have disastrous impact on the agri front affecting the production and availability adversely. Free trade regime as is being talked about is ideal but if agri production is affected by drought or other reasons, the market conditions can get distorted because of mismatch between demand and supply. Whether any responsible government in India which depends on rain Gods too frequently to come up with normal agri production can adopt such a model is doubtful. Unless a stable and dynamic export policy regime is put in place both farmers and consumers are bound to suffer. When taking decisions the impact of the same on the domestic front should not be ignored. While cotton and sugar are commodities which can be left to the free market forces, more care is needed when it comes to milk and food grains, prices of which in the domestic market should not be allowed to be distorted due to excessive exports.  

V.H.POTTY
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http://foodtechupdates.blogspot.com

INDIA'S GRAIN HARVEST-QUANTITY VS QUALITY

Government of India (GOI) appears to be gloating over the performance of the farmers in achieving a record production of food grains this year, as being predicted by its expert forecasters. Whether this has happened because of GOI or in spite of it, is a million dollar question. Interestingly if there were shortfalls, GOI would have blamed failure of rains or trotted out some other excuse while farmers' success story is promptly touted as its own with no sense of shame!  A closer look at the statistics of production at the disaggregated level will reveal a different story. While wheat and other cereals except coarse grains have shown higher production, it is alarming to see the production of pules and oil seeds dipping to dangerous levels with decreased production to the extent of 10-15% and the aam aadmi cannot but shiver looking ahead what is in store for him in the coming months vis-a-vis the the availability and cost of these vital foods. If GOI cannot bring about a positive change in the nutrition quality of grains produced by increasing the production of oil seeds and pulses, it has no right to claim that it is working for the interests of aam aadmi! If this is not a failure of GOI agricultural policies, what else it can be? Here are the details of this sad story coming out of GOI's own backyard!

"The government's food grain storage woes have turned more acute, with food grain production for 2011-12 estimated at an all-time high of 252.56 million tonnes, almost 3.1 per cent more than that the previous year's production. This may help provide a minor boost to India's economic growth in the previous financial year, estimated at 6.9 per cent. While releasing the third advanced estimates of agricultural production in 2011-12, Agriculture Minister Sharad Pawar said storing such huge quantities of grain was a concern. "The overall food grain production is good. The only problem is storage," Pawar told reporters, adding the issue was being addressed by the food ministry. Pawar had recently urged Prime Minister Manmohan Singh to call a high level meeting of all stakeholders to discuss the storage problem. He had said if the issue was not resolved, it might affect the morale of growers. According to official estimates, the country's food grain stocks are expected to rise to 74 million tonnes by June-end, compared with the available storage capacity of about 64 million tonnes".

The situation becomes more pathetic when it is conceded that the MSP policy of the government is attracting farmers to dump their grains at the doorsteps of FCI which has no idea where the newly procured grains are going to be stored! It is known during the last few years that precious little has been done to establish a sound storage infrastructure for long term and safe storage of procured grains. Every citizen in this country has to hang his head in shame when it is universally known that the food grains stored in FCI grain storage structures are of very low quality with substantial portion unfit for human consumption!. In stead of finding ways and means to remedy this situation, the great policy paralysis and bureaucratic inertia at the government level is continuing to bleed the nation grievously. It is time that government takes proactive steps to address these woes through concrete action rather than indulging in bald and meaningless proclamations without any substance.

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

   

FOOD SECURITY-ANOTHER PERSPECTIVE

Providing food for the poor who have no access to affordable food materials both for calorie as well as nutrient requirement is indeed a laudable mission and Government of India (GOI) must receive full kudos for conceiving the giant Public Distribution System (PDS) with good intentions. Unfortunately all good intentions do not get translated into reality and to day's condition of the PDS is best described as pathetic for which the same government is responsible. In stead of learning lessons from a program which has gone haywire, GOI seems to be trapped in the quagmire committing more mistakes, intentionally or otherwise, pushing the country deeper into economic bankruptcy  Many suggestions have been made from time to time by well meaning experts regarding the direction in which PDS must be "rerouted". However GOI seems to be obsessed with garnering votes through a scheme for supplying the food grains practically free which can only expand the "pilferage" of grains by the politician-mafia nexus that operates to day with total impunity! An alternate proposal put forward by some experts calls for a transparent distribution system through issuing coupons or so called food stamps with which beneficiaries can get their entitlement from any retailer nearby. Here is a take on this new option suggested by them.

"If the government has transferred responsibility to the private sector in education, a fortiori, it also ought to put its faith in the private food trade when it comes to food subsidy. Curiously, the Food Security Bill before Parliament is all about government bureaucracy and government departments, with implications of administrative expenses overshooting the operational expenses. To be sure, food coupons are not the panacea to the vexed problem of targeted subsidy, but it is infinitely better than a PDS system that leaks like a sieve. Warts and all, the coupon system at least ensures a minimal role for bureaucracy and completely does away with state procurement, besides doing away with the problem of food rotting in the open, exposed to the elements. If students can be redirected, as it were, to private schools, the poor should be called upon to go to a kirana store in the vicinity, armed with food coupons given by the government. In fact, the initiative on the education front needs to be emulated across sectors — food, health and defence personnel; kirana store has been used more in a metaphorical sense herein. The crippling burden on government hospitals can be managed to a great extent through health coupons a la an insurance policy that is the open sesame for entry into cleaner and more effective, albeit infinitely more expensive, private hospitals".

The massive annual subsidy estimated at 70-80 thousand crore rupees coming out of the national exchequer is nothing but a wastage of resources by this economically turbulent country and to think that most of it is going to line the pockets of politicians, bureaucrats and brokers is really disturbing to the conscience of every honest citizen. No one knows who really deserves food grains at low cost when the family income has increased very significantly, especially after the implementation of various schemes of the GOI to guarantee employment in rural areas. Almost all urban families are well off compared to their counterparts in rural areas with relatively moderate income and why they should receive subsidies is baffling. With real and reliable economic statistics not available, it is time that a more precise and dependable method is evolved to identify families who are really poor and restrict the subsidies only to them through efficient and strict management system. Probably only a fraction of the number that receives subsidy may be eligible if the truth is brought out. Food coupons must be tried out at least on a limited scale to test its effectiveness in checking massive pilferage taking place at present.

V.H.POTTY
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http://foodtechupdates.blogspot.com

IGNORE THE HOME, SHOW CHARITY ABROAD-THE NEW GOI APPROACH

It is amusing to read that India is acting like a super power going valiantly to help Africa rise like a food industry giant through extending credit and technical help. What is not understandable is regarding the capability and strength of this Ministry to really plan, design and implement food industry clusters for which enormous experience is needed. One gets rather nervous hearing about such grandiose plans because this Ministry, in spite of its pedestrian existence for the last two decades plus has practically nothing to show as its accomplishments within the country! The 'proclamation"by the Babus in the Ministry is indeed pathetic. Where are the people, qualified and competent to undertake this task? Is the Ministry going to hand over the money to some "favorite' consultants without bothering about the success of the so called "Mission"? Can India afford such lavish spending in a foreign country when the small food industry is languishing across the country? Whatever is the worth of this policy pronouncement, one thing must be made sure and that is to make India a laughing stock abroad for inappropriately executed and inordinately delayed projects which ultimately fail to take of.  There are many "monuments" in some parts of Africa bearing testimony to such crude attempts in the past! Reading the announcement is nonetheless interesting for what it does not say than what is said!

'The ministry of food processing industries is planning to set up a food processing cluster in Africa. The proposed cluster would entail an investment of Rs 117 crore to be spent primarily on the setting up of common infrastructure for food processing parks which includes cold storage, food testing labs, incubation centres, standard designed factories, pre-cooling chambers and other modern technologies used by the industry. This cluster is part of India's $5-billion credit line for Africa announced at the India-Africa Forum Summit last year. "The cluster is likely to come up within next three years. We are floating a competitive bid to appoint a project management agency which will help the ministry in implementing this project," said a top ministry official."

There are some Technological Institutions involved in food technology development but none of them possesses the required management dynamics to design and execute manufacturing projects as exemplified by their relatively obscure presence in the industrial landscape of the country. One wonders how many incubation centers have been established by the Ministry in India during the last 5 years! Also debatable is the success of so called Food Parks touted as achievements by the Ministry. A more logical step would have been to rope in private sector players and experienced consultants to lay out a road map to attain the objective. Good projects with trouble free functioning in foreign countries can be a standing testimony to the technological prowess of the country and spending millions in the name of foreign assistance will have no lasting impact.

V.H.POTTY
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THE "ACHIEVEMENTS" IN FOOD SECTOR PROGRAMS!-ANY TAKERS?

Glorious pictures about the achievements of Ministry of Food processing Industry are "painted and planted" among friendly media persons for country wide "splashing" and thereby get a good image in the minds of people about this highly bureaucratic set up at Delhi. Imagine what embarrassment it can cause to the Babus in MFPI when its own consultative committee has nothing but ridicule for the claims made by it every year at the budget time. Most heinous crime being perpetuated by MFPI is that in spite of its existence for almost two decades it did very little to create a reliable data base about the food industry and its figures are at best guesstimates based on heresay and unreliable sources. GOI must consider evaluation of the impact of MFPI on the performance and growth of the food industry by a blue ribbon committee of experts knowledgeable about all aspects of food processing and if its working in the past 22 years has been not satisfactory, it should have the courage to wind it up unceremoniously with no remorse! Here is a take on this issue.

"To which the committee reacted: "The committee cannot but, consider these achievements of the ministry with a pinch of salt, as their estimation is based merely on 'regular discussions' with stakeholders. Arriving at conclusions on such important matters on the basis of mere discussions throws a lot of light on the sanctity of the data flaunted in support and speaks volumes on the manner of working of the ministry in charge of the 'sunshine' sector of the Indian economy. The glaring absence of an information system for compiling data and indices pertaining to the food processing industry sector in the country, in spite of the ministry being in existence for two decades now, also reflects poorly on the planning and management capabilities of the ministry." Apart from lack of data, proper mechanism for systematic planning, and delay in execution have also been the concerns of the ministry."  

Of course many people unconnected with the food industry are benefited from the pedestrian existence of MFPI and these people are bound to protest. Even some industry players, cozy with the Babus in the MFPI may resist any attempt to close the ministry because of their vested interests. The still-born NIFTEM, touted to be a world class food technology institute is a classical example of the wrong priorities of MFPI and on top of this an undistinguished R & D set up in Tamil Nadu is being propped up as a high tech organization to solve all the problems of the industry. It is another thing that neither the food industry nor the food scientific community has any high opinion about the caliber of these organizations to deliver the required services to the proposed users.

V.H.POTTY
http://vhpotty.blogspot.com/
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