FOOD SECURITY AND THE STORAGE WOES-IS THE COUNTRY FULLY PREPARED?

The "courageous" Government at Delhi (or is it food hardy?) has now jumped into the so called food security program, one wonders what is in store for the country. It looks like government is ignoring the time tested saying that "a bird in hand is two worth in the bush"! That is not doing much to develop the economy while indulging in resource sapping free food distribution extravaganza. The country may end up with neither hungry alleviation nor economic growth. The brutal butchering of Indian rupee in the currency market during this midweek is a warning signal which can be ignored only at the expense of the economic security of this country. The much touted food security bill which garnered support from practically every party did not had the courage to stand up against this populism and voter bribing attempt through this bill and therefore each one of them will be responsible for the economic consequences of implementing an impractical scheme. Here is an informed critique from well reputed experts about the gullibility of this latest action of the federal government. 

"As the procurement of food grains increase, the storage capacity should be appropriate, explained Sabnavis, "If we look at the bill closely, 60 million tones would be distributed annually, on an average five million a month. This means 55 million tonnes would be lying in the warehouses and if we add buffer stock to it, we would move closer to 100 million tonnes of capacity. Hence, we would require appropriate mechanisms for storage." Ashok Gulati, chairman of the Commission for Agricultural Costs and Prices, told Business Standard it was a debatable issue as to how much food grains were damaged. "Twelve million tonnes in Punjab and five-six million tonnes food grains in Haryana are lying in the open. The International Mechanical Engineers estimates say that every year 21 million tones of wheat is damaged in India. Hence, that goes without saying that we need better infrastructure to take care of our produce", said Gulati. The total storage capacity available for central pool stocks was 74.6 million tons as on July 30 this year. However, Gulati believed that unless it is announced what the buffer stocks norms in the Bill are, one cannot know how much produce needs to be stocked. He felt that not more than 51-52 million tones storage capacity will be required for implementing the proposed scheme.  "This is because we need to match our procurement with distribution and at present, we are keeping much larger stocks than we need", added Gulati".

Is it not a pity that no one in the country, least of all those governing the country, has a clue regarding the way to go about in implementing this massive scheme though every one is talking about crossing "the bridge when we reach there"! As rightly said the storage and distribution system as it exists in most states are woefully inadequate to deliver the promises contained in the bill and it is not going to be easy to rectify the same over night even if action is taken to day. With very little evidence about any improvement in the management efficacy of those entrusted with grain storage and distribution, the country will continue to waste grains and allow pilferage through many leaky points through out the system. It is gut wrenching for every honest and conscientious India to be told by experts that more than more than 18 million tons of precious food grains that can feed the population for three months are lying in the open without protection from the spoilage vectors and elements! Another 21 million tons are reported to be damaged every year in the country as assessed by some international agencies. With only a few months remaining for general election there is a lurking suspicion that this food security program will be abandoned once the election over!   

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

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

The food glut scare is giving no sleep to the babus in Delhi who are running helter skelter to find a way to manage the grain stocks, old as well as new, now being procured without inviting Supreme Court wrath or consumer backlash. As there are no long term policies in place governing agricultural production and export, the dynamics of grain flow change from day to day. If exports are allowed to day, it could be banned tomorrow when there are some protests from the people. The crop pattern in the country also is highly skewed with water guzzling crops like Sugarcane, Banana and wineyard grapes getting preference in water utilization policies pursued during the last few years. Immediate concern is whether surplus food grains over and above that is required for domestic consumption between the harvests as well as for food security, reported to be sufficient to feed half the population for an year, can be safely exported without causing any price distortion in the market place. Some experts feel that it is safe to export a predetermined quantity of grains as a part of a long term export policy with flexibility to increase whenever there is too much of a surplus. However a timid government with the 2014 election uncertainties staring at it, does not seem to have the courage to open up grain export for earning valuable foreign exchange. Here is a take on this issue which is a "hot potato" for Delhi to handle comfortably! 

"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."

Is it not remarkable that Indian farmer has not failed the country in spite of enormous odds faced by him with severe water scarcity and limited support from the governments at the Center as well in the states and this year also a bumper harvest is predicted? Scores of farmers are starving and committing suicide with a sickening regularity because of many socio-economic reasons and the farm operations are increasingly becoming economically unviable with too many uncertainties. The small land holdings in the hands of small and marginal farmers cannot be expected to generate adequate cash for meeting the daily necessities of life for them. Cooperative model for integrated development of land does not seem to be working except in the case industrial crops like Sugarcane and Banana, that too monopolized by big land holders with powerful political connections. Under these circumstances Government must encourage exports in a big way and utilize the earnings for improving the lots of the poor farmers of India.

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 GRAIN OF "TRUTH"!-NATION'S FOOD "WOES" AND POLITICAL APATHY!

Indian nation has to thank the Supreme Court of the land for rapping at the knuckles of the political masters who claim they are "governing" the country, for the awfully sorry situation vis-a-vis food grain storage and mindless food wastage. It is a reflection of the total apathy of the political class, irrespective of their class or color or creed, that adequate precautions were not taken to save the food grains so painfully produced by the teeming millions of farmers through their sweat and blood by not expanding the storage capacity in commensurate with ever increasing production. Probably no where in the world except India one can witness the colossal loss of food year after after year through sheer negligence and callousness of unbelievable magnitude. In the latest report, the Comptroller and Auditor General of India (CAG) has made a scathing indictment of the government of the day for its continued neglect of food grains and granaries of the country.

'The national auditor highlighted the increasingly inadequate storage capacity of the Food Corporation of India (FCI), the government agency entrusted with food management and the procurement of food grains. This storage gap and other policies of the FCI led to food spoiling in a nation where millions still go hungry everyday. The Comptroller and Auditor General of India (CAG) said in its report that was tabled in Parliament on Tuesday that the storage gap widened to 331.85 lakh metric tonnes (LMT) from 59.95 LMT in the six-year period between 2007 and 2012. The report said efforts to address the issue were inadequate. "The storage gap in FCI against the central pool stock witnessed a steady increase during the period 2006-07 to 2011-12," it said. "Against the storage gap of 332 LMT (March 2012), GoI (government of India)/FCI envisaged capacity addition of only 163 LMT during the six-year period under various augmentation programmes. Of this, only 34 LMT was completed (March 2012)." Even as storage capacity remained inadequate, existing capacity was not completely utilized. The auditor observed that utilization of existing storage capacity in various states and union territories was less than 75% in the majority of the months between 2006-07 and 2011-12. This amounted to unnecessary expenditure of Rs.376 crore during the period as FCI didn't use the space it had in Punjab and Haryana, the auditor said. Though there was a steady increase in the food stock procured by government agencies, it didn't match allocation requirements under various government schemes. "The average food grains procurement of 514 LMT during the period 2006-07 to 2011-12 was lower than the average allocation of 593 LMT made by the government to states under the targeted public distribution system (TPDS) and other welfare schemes (OWS)," the report said. CAG highlighted the absence of specifications for maximum and manageable stock levels to be maintained in the central pool and of minimum buffer norms. It added that the existing buffer stock policy does not indicate which agency is primarily responsible for maintaining the minimum buffer stock level for the country as a whole, which adversely affects accountability and transparency in the management of food grains. The report said the government doesn't follow a specific policy for fixing the minimum support price (MSP) relative to the cost of production. "It was observed that the margin of MSP fixed over the cost of production varied between 29% and 66% in case of wheat, and 14% and 60% in case of paddy during the period 2006-07 to 2011-12. Increase in MSP had a direct bearing on statutory changes levied on purchase of food grains by different state governments," said the report, adding that this eventually resulted in the rising acquisition cost of food grains".

There will be blame game and "passing on the buck" statements regarding the reasons for this sordid affair but fact still remains that those culpable for this criminal negligence are never brought to books for their shirking of responsibility. Government "spin doctors" adept at interpreting any indictment as unavoidable, will continue to present a picture as not so discouraging, though more than 200 million people in this country are supposed to be going to bed every day on a hungry stomach! Even to day a non-repentant ruling regime does not seem to be serious about the plans to expand storage capacity and in stead trotting out tall claims about future plans to remedy the situation without really meaning a single word of what they are saying! This raises the logical question as to when this country is going to be ever salvaged from the self seeking politicians parading under the garb of democracy!  

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

INDIA TO BECOME A GLOBAL FOOD GRAIN TRADER?-THE RISK FACTOR

Food security for a country implies that adequate food is available to every citizen and there is no short supply. Unfortunately in India this term is being touted to imply that government warehouses hold adequate stocks of food grains, that too rice and wheat to meet the statistical average need of a person. The wide income disparity and extensive property do not allow such citizens to buy their food requirements is gloated over under the excuse that these segment of the population is covered by the inefficient and corrupt Public Distribution System or PDS under which Below Poverty Line families are supposed to get their minimum needs at very low cost. In this scheme Food Corporation of India {FCI) which is the nation's store keeper under GOI is supposed to manage grain procurement from farmers, store them safely and supply the same to so called ration shops spread all over the country. According to many studies it has become clear that more than 50% of the grains do not reach the targeted beneficiary, getting "leaked" on the way! FCI is also used as an arm for export and import of food grains as when there is a contingency. This very same agency is now being asked to get into global grain trading business assuming that such activities can reduce the subsidy burden of GOI. How far this may work out and the long term implications on country's domestic market are discussed in a recent report by an experienced expert on agricultural policies. here is a gist of it.  

"At a time when the Global Hunger Index 2012 ranks India 65th among 79 countries, K V Thomas, minister of state for food and public distribution and consumer affairs, has revealed that the Food Corporation of India (FCI) will soon trade wheat in the futures market. Seeking clearance from the Forward Markets Commission, the minister said: "The market has to perform the economic function of price discovery and price risk management." Well, what I can see as the basic objective is to replace the open market sales scheme with trading in the futures market. In other words, futures trading will provide an opportunity for FCI to make some profits, which in turn can be ploughed back in its procurement operations, thereby reducing the subsidy outgo".

A moot question that begs for an answer is whether India can really sustain itself as a viable food grain business player when the government is trying to usher in a new policy of supplying food grains at ridiculously low price covering almost 70% of the population? The requirement for such populist scheme is going to be huge and FCI is going to be tied to this challenge in the coming years. GOI does not seem to have learned its bad experience in propping up State Trading Corporation (STC) as a state controlled business arm by giving it monopoly in dealing with some portfolio and if FCI is now going to follow the footsteps of STC, one can imagine what would be the result. Unless the management structure and working style of FCI are drastically improved, the new policy may end up in another fiasco. This is not to under estimate the potential for FCI to become a global player in grain business as it is one of the world's largest grain dealers, handling massive quantities of food grains, primarily for domestic market and if this is to be realized GOI will have to relax its iron like grip on the functioning of the organization, giving it a free hand in day to day operations. Will this ever happen? No way, knowing the unlimited power wielded by bureaucracy on every institution in the country to day.

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

   

TO BE OR NOT TO BE!-THE POLICY PARALYSIS ON WHEAT

Is it not a fact that on every issue that confronts the nation there are at least two opinions and in a democracy there there can be as many views as the population itself? Latest issue that is inviting rave views concerns the bumper production of food grains being claimed by the government and what should be done with it because the grain storage capacity cannot accommodate the entire grains procured by the government agencies at an MSP considered high by many economic pundits. Added to this there are proposals to increase the MSP further to play to the farm lobby interest. Extent of wastage due to rotting of wheat which are stored in Godowns and open space under the CAP system is no body's business with even the Supreme Court castigating the government for its shirking of the responsibility to feed the nation qualitatively and quantitatively. The paradox and irony of the situation are graphically illustrated by a recent report which is highlighted below.

"Why are we paying Rs 20 for a kilo of atta when India has gathered a historic wheat harvest of 90 million tonne, enough to comfortably feed us all? Why is bread going out of the reach of lakhs of school kids, when grain is rotting in government godowns? Why is the Manmohan Singh government willing to subsidize wheat exporters but not ready to sell more in ration shops? There is only one answer to these troubling questions: it's no accident, it is policy. It starts with the government's inability to say stop. Government supplies wheat to ration shops and welfare feeding programmes through the Food Corporation of India. This year, after keeping aside buffer and strategic reserves, the FCI can be comfortably off with 35 million tonne. On April 1, when the new wheat marketing season began, government started with 20 million tonne left over from last year. And it has bought 10 million tonnes more since then. In other words, government can shortly exit the market. FCI has enough space to store this wheat safely. Thefood subsidy bill would be manageable. And there would be ample wheat left with farmers for food companies to buy. With a minimum support price of Rs 12.80 per kilo, atta would not cost us more than Rs 16. But this scenario doesn't reckon with politics. The government does not dare stop buying as long as even one farmer in Punjab and Haryana wishes to sell. The political reprisal would be swift and deadly. Till two years ago, there was a natural limit to government purchases because FCI was largely absent in other wheat-growing states. Then, under pressure from other chief ministers desperate to replicate Punjab's political success with wheat, government allowed states to buy on FCI's behalf. This opened the floodgates. Madhya Pradesh and Rajasthan began offering farmers the MSP plus Rs 1 per kilo extra, creating a stampede of sellers. Bihar, Gujarat, and Maharashtra are also buying enthusiastically". 

While large farmers are cozying up to the government to reap big profit from their large holdings, it is the small and marginal farmer with a tendency to commit suicide because of the inequities that stare at them are adversely affected, no matter how high the MSP is! How about the consumer who is sidelined in this raging debate and what are his thoughts? Desperation, frustration and helplessness are his fate! Why not government sit up and take note of the daily sufferings inflicted on him by the policy paralysis that is evident for the aam aadmi of this country? It is true that there is no magic bullet to save the country from chaos brought upon by the present power class which seems to be more obsessed in staying in power "at any cost". But displaying statesmanship and ability to recognize the sensitivity and sufferings of the people should be the hallmark of good governance and lot of the problem that face the country can be sorted out through sincere consultation and cooperation among the political class. Any body at Delhi listening?

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

INCREASING MSP FOR FOOD CROPS-GOVERNMENT DILEMMA!

Only recently that economic pundits in India were worried about the increasing disparity in grain prices between that rule within the country and that prevalent in global markets. The uncertainty regarding the decision to be taken by the Indian government as to what to do with the bumper crops expected this year is vitiating the situation further. While government does not have adequate grain storage capacity to store all the food procured, export is likely to be uneconomical, especially wheat, if one goes by the prices obtaining in international market. One of the reasons attributed to this "catch-24" situation is the relatively high prices being paid to the farmers who find it profitable to sell their "fruits of labor" to the government rather than to private traders. If the recommendations of the CACP, which are under the consideration of the government, are accepted there is bound to be a cascading effect on domestic food prices with potential for civil unrest by a population already burdened with high food inflation. Here is a take on this critical issue which raises more questions than answers regarding the direction in which the country is moving. 

"There is unease in the government, especially in the finance ministry, on the implications of the 15-53 per cent rise proposed by the Commission on Agricultural Costs and Prices (CACP) in the Minimum Support Price (MSP) for kharif crops.  However, the CACP has defended its recommendations as just enough to ensure a reasonable return to farmers and for food security. The Cabinet is likely to take a decision on the MSP next week, to give enough time to farmers on planning their sowing decisions. Official sources were doubtful if an increase could be sustained beyond 10-25 per cent, barring one or two crops where production needs to be enhanced or farmers had faced big losses due to unfavourable weather conditions, as in groundnut. Besides, the Prime Minister's Office has ruled out any possibility of a bonus in addition to the MSP. Officials say a bonus is to be considered if the MSP does not take into account any sudden increase in cost of production or any external factor not factored in. There is no case for an additional, said officials. It is learnt the ministries of finance and food have questioned the recommended increases of the CACP, citing high inflation and food prices as a cause of worry"

CACP is, of course, a knowledgeable body and may not like any questions raised against its calculations and estimates. But if these new MSP figures are worked out on the economics of running a farm of one acre of land or such small land holdings, so common in India, it may be a skewed projection. Government must take into consideration the non-viability of farms below a certain size and if feasible evolve a program that will compensate poor farmers in stead of raising MSP to alarming levels which will only enrich the pockets of large farmers running big farms. It is true that the task of a government in balancing the interests of farmers and consumers is an unenviable one and offering advice ad libitum may be easy for critics. Still all hues of opinion must be listened to before taking a realistic decision equitable to all.

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

   

DEFENDING THE INDEFENSIBLE!-ANOTHER VIEW ABOUT PDS IN INDIA

That the PDS system which is supposed to serve millions of impoverished Indian population is in total shambles is well known with massive pilferage being the hall mark of the program. The only point on which there is difference of opinion among impartial observers concerns the percentage of intended beneficiaries who get the real benefit, the estimates varying from 40% to 65%! In spite of the criminalization of PDS, country's GDP seems to be registering amazing growth with people to day having more money in their hands like never before. If the latest revelation that PDS grains are used by many families to raise Chickens and other domesticated food yielding animals is true, Government needs to rethink the strategy as to whether the PDS is really serving the purpose for which it was created. Probably those who receive the PDS grains find it hard to consume them because of extremely low quality and hence are feeding the same to raise meat, egg and milk! The brand new Food Security Bill further seeks to raise the subsidy and provide these grains at practically throw away prices of Rs 1-3 per kg! These reckless policies, with a hidden agenda of cornering vote banks, especially in rural areas, can only lead to more starvation, under nourishment, malnutrition and bankruptcy of the economy in the long run. 

Padmini, a native of Chertala Taluk in Kerala says that she gets more than enough foodgrains to feed her family at subsidised rates of Re 1 to 2 per kg. So she sees no harm in feeding the excess grain to household chicken and ducks. After all, eggs, chicken and duck fetch substantially higher value at the market. Moreover, it would be far more expensive to buy rice-brawn and coarse cereals which were fed to the poultry earlier. While the political masters are deliberating the prudency and expediency of the newly revised poverty line, millions like Padmini have no doubt crossed the invisible line which divides the poor from the rich in India. Suffice to say that it has been a feat without parallel in Indian economic history. A feat, more remarkable than India's tryst with liberalisation programmes. Despite all the success stories about India's green revolution and self sufficiency in food grain production, per capita availability of cereals stagnated around the 400 gram mark during the past 50 years. Productivity had marched ahead. Food grain production had tripled. But for occasional vagaries of weather and wild swings in production there was nothing substantially wrong with India's food production. The visible signs of prosperity both in India's rural heartland and urban sprawls are real. These signs meant that India's poor were consuming more. Per capita food grain availability should have zoomed. But that has not been the case.

According to recent reports, country's food production is expected to be unusually high and if procurement prices are right there could be a large inflow into the granaries of the government. With the storage capacity in the country being limited a substantial portion of the procured grains will have to be kept under CAP system of open storage which will further aggravate the quality problem already being experienced with PDS grains. If the cash distribution option being considered in lieu of food grains is implemented what will happen to the PDS is a million dollar question. A fundamental issue that is ignored by the policy makers is whether such free distribution of national wealth will not impact the human productivity in the country adversely as the need to work to get food is obviated by the government largess. Unless subsidized food is confined and restricted to those who are really poor by standard economic markers as assessed by scientific census there is no justification to waste national wealth so recklessly as being proposed.

V.H.POTTY

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