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