People's Democracy

Utsa Patnaik

THE Green revolution from the late sixties onwards, owing to its markedly greater success in Northern and North western India compared to other parts of the country, had led to increase in the regional concentration of foodgrains output, to a degree of which few are aware. Over a decade ago we had worked out the changing structure of the various regions' contribution to aggregate food output in India for the period 1960-61 to 1987-88 and presented the summarised data in the form of snapshots of three sub-periods, in Table 1. This shows a marked, indeed dramatic shift. Total food output in the regions considered rose by 82 per cent from the early sixties to the mid-eighties. Accounting for just around a quarter (26 per cent) of total food output during 1959-60 to 1961-62 (taking the average of the three years), North and North-Western India had increased its share to two-fifths (39.8 per cent) by the mid-eighties, taking the triennial average for 1983-84 to 1985-86. All other regions of India showed a greater or lesser decline: Eastern India from 23.2 per cent to 20.2 per cent, South India from 21.5 per cent to to 17 per cent and West-central India from 29.1 per cent to 23.1 per cent. Of the addition to grain output during this period, which was 65 million tonnes, nearly 37 million tonnes or over half came came from North India alone.

This rise and regional concentration of foodgrain output was the basis for the successful operation of the Public Distribution System (PDS), which although it had been in existence for long, could expand its operations from the mid-seventies food price crisis onwards, on the basis of the surplus grain production of the Northern region of the country which was procured and distributed to urban areas, Union Territories and to food-deficit states. In fact one may regard this regional concentration as the expression of a form of specialisation, induced by the relative ease of expanding food production using the new technology in some areas compared to the relative difficulties of doing so in other areas. Northern India - Haryana, Punjab and Uttar Pradesh - taken together became the granary of India. The data on regional output per head of regional population is very interesting : it shows that during this period of a quarter century of green revolution, the only region where per head output rose, and did so very sharply, was North plus North- west India: in all other regions it was either stagnant or it declined. (To obtain per head food output we are dividing the regional output through by regional population) Punjab and Haryana taken together more than doubled per capita grain output and the Northern region as a whole raised it by two-thirds. Everywhere else per head grain output declined. This was true not only as a matter of regional average, it was true of every individual state as well outside the states of the growing region, except for the state of West Bengal which registered a rise in per head food output (see Table 1).

In a sense, for nearly three decades starting in the early sixties North India was encouraged by public policy to become the granary of India, which fed the urban and food deficit regions. Within a union of states this specialisation made sense because clearly, many other states had a different pattern of primary sector advantages: Kerala or coastal Karnataka for example in a range of cash crops - spices, rubber, etc only producible in their unique climate-soil complex, North Bengal, Assam or the hill areas of Tamil Nadu and Karnataka in the production of tea and coffee, and so on. Within the question of primary sector advantages we may include also the minerals and foreign exchange from exports: Assam's oil served not only that state but the rest of India, Kerala's foreign exchange earnings from cash crops exports went to the central exchequer. While the regional pattern of foodgrains and non-foodgrains specialisation benefited the nation, it necessarily required the central government to operate a system of public procurement and distribution to ensure that the areas which were therefore food deficit, got the foodgrains their populations needed.

By the mid-eighties, the Food Corporation of India (FCI) was procuring about 16 per cent of gross output amounting to over 40 per cent of all grain entering the market. About 90 per cent of its wheat purchases came from North India and over two-thirds of rice purchases also came from this region. Its purchase, stocking and sales operations had a stabilising effect on grain and other prices, preventing price crashes hurting farmers in times of glut and preventing through the release of stocks on the market, excessive inflation during times of shortage which would hurt consumers. A graph of global international terms of trade for farmers (index of prices received for sales from agriculture divided by index of prices paid for manufactured goods) for this period shows that it see-sawed wildly, while the graph of internal terms of trade for India shows a gently rising trend with no wild fluctuations. Additionally drought-proofing through food-for-work could be implemented on a substantial scale in the late eighties owing to the food stocks available in the system - during the 1987-88 drought considerable employment and incomes were generated, despite all leakages, which benefited the drought-hit and contained the extent of their distress.

Today, the present NDA government at the centre is trying its utmost to dismantle the FCI and the PDS, and to do so it focusses attention narrowly on the costs of stock-holding and the alleged burden of subsidy on the budget. The government has already substantially run down the PDS and it is trying hard to implement the agenda of the rich grain exporting countries (USA and the EU) which want India's procurement and distribution system to go completely, for it is a hindrance to their aim of seizing the market for grain in this country. Of course, the arguments put forward are different in order to form a smokescreen - the alleged inefficiency of the FCI, the alleged benefits of private trade, etc, and as an transitional measure it has been suggested by government that there should be no obligation on the FCI to buy from farmers, that it should procure only when requested to do so by the individual states which would have the full responsibility of transporting the grain to where they needed it. While this has been rejected for the present by constituents of the NDA itself which have a farmer support base, it would be a mistake to think that the attempt to destroy the PDS will be given up. The advanced countries have already carried out the tactic of destroying local food security systems through pressure on compliant governments to dismantle public procurement, in a number of other developing countries. After the destruction of its PDS, the Philippines has become a large net importer of grain from the US. India's private grain traders' lobby is also behind the government's attempts to dismantle the FCI and PDS, effectively helping to sell the country in the hope of private gain.

In this situation, it is important to remember and to stress the fact repeatedly that in addition to its important price stabilising function, and employment -generating function in times of need, the PDS is an expression of the economic unity of the constituent states of the Indian Union. Its destruction is tantamount to a break-up of this economic unity. Why should this be the case? Because, if the central government abdicates its responsibility of ensuring that foodgrains are reached at affordable prices to states which are food-deficit because they specialise in non-food crops or because they have other types of specialisation, then the central government no longer has the moral authority or right of access in the name of the nation, to the resources, or the earnings from the resources of these states. Then, Assam can demand the right to sell its oil directly abroad to obtain the foreign exchange to buy food, and Kerala can demand that its foreign exchange earnings from exports should be remitted to it directly and not to the RBI, to dispose of as it wishes, and that the remittances of its Gulf workers ( accounting for a large part of the staggering total of 70 billion dollars remitted over the last decade) should not be used only to shore up the balance of payments of the Indian Union as has been the case so far, but should also be remitted directly so that the state government can deal with the crisis of crashing farm prices and unemployment. Nothing would suit the imperialists better than the introduction of strains and stresses between states and the centre, leading to an effective disintegration the Indian Union as an economic entity and the dismantling of the PDS would have precisely such an effect.

Developments over the last decade, 1991-2001 with regard to the foodgrains front have been unfavourable owing to trade liberalization, removal of protection, neglect of investment, and the official privileging of exports at the expense of food security. The structure of agricultural output has been pulling away from the foodgrains whose per capita output has been falling - despite a run of thirteen good monsoons. Now that the Census 2001 estimates are available showing a growth rate of 1.89 per cent after 1991, we can appreciate the extent of window-dressing involved year after year in the Economic Survey presentation of per capita availability figures, which are on the assumption of a mere 1.67 per cent population growth rate. All these figures have to be reworked for the last decade.

In the former powerhouse of India's agriculture, the Northern region, we find marked slowing down during the last decade amounting to virtual stagnation in per head output, in sharp contrast with the high growth in the preceding decades. While there was improvement during the second half of the eighties in many states in the West-central and Eastern region, by the second half of the nineties all regions other than the Northern, registered falling output per head, so that there is a net decline at the all-India level in the per head food output. Updating the Table 1 calculations we give the preliminary figures for the regions in Table 2, again as three-year averages during 1989-91, 1993-95 and 1998-2000, which brings out the trends. In view of these disturbing trends of decline, the preservation and extension of the PDS assumes even greater urgency. Its potential role as a stabiliser of prices in the era of WTO discipline and in employment generation, will be discussed in a subsequent article.

Table 1

Foodgrain Output 1960-62 to 1984-86