People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)

Vol. XXX

No. 25

June 18, 2006

Defending People's Right To Food


Brinda Karat


WHEAT imports symbolise the utter failure of food policies of successive governments since India opted for the imperialist led reform process in the early nineties. Step by step, one of the most crucial components of self reliance, that is food self sufficiency and food security have been systematically eroded. The public distribution system with its three pillars of production, procurement, and distribution of foodgrains through what was one of the widest networks of fair price shops in the world is in utter shambles. The government is preparing to deal the final blow—to cut down supply of foodgrains to the public distribution system by slashing family quotas, by hiking the prices of rations and by cutting down on the foodgrains component in the wages paid in employment generation schemes.



The recent note from the department of food and public distribution to the cabinet committee on economic affairs is an all out assault on food security and is contrary to the commitment of the common minimum programme. The recommendations are for “prudent food management with special reference to the management of wheat stocks”. It is claimed that if accepted the wheat deficit of 59 lakh tonnes anticipated in April 2007 will be wiped out. India has already imported 5 lakh tonnes with tenders floated for another 350 lakh tonnes. There are eight major proposals: reduction of wheat allocations to the states; allocation of coarse grains instead of wheat; removal of foodgrains in the SGRY scheme as part of wage payments; decrease in allocations for drought hit areas; increase in prices of foodgrains for both APL and BPL card holders in the public distribution system (PDS); reduction in quotas for both APL and BPL by 5 kgs from the present 35 kgs; no sale of wheat in the open market by state agencies which is usually done to control prices.



Given that rice procurement has increased by 28 lakh tonnes to 234 lakh tonnes, if it was a question of replacing to a certain extent wheat with rice or even coarse foodgrains in the PDS in consultation with state governments while keeping the allocation amount in tact, it would be a different matter. But in effect what the ministry is saying is that if you do not like wheat imports then the only alternative is to stop the supply of wheat altogether and in the process you can further “reform” the PDS by doing away with it! Clandestinely, the central government has already arbitrarily cut down on wheat supplies to states. According to a memorandum by the Fair Price Dealers Association in West Bengal whereas in 2004-2005 the wheat allotment for both APL and BPL was 2.22 lakh tonnes it has been slashed to 1.51 lakh tonnes in the current year. FCI godowns in five major centres do not have wheat stocks at all. In April 2006 whereas the dispatch instructions were for 59 rakes, only 15 rakes actually arrived. Similarly, in the SGRY the earlier component of 5kg of wheat as part payment of a daily wage has already been cut to 3 kgs. States have complained that wheat allotments have virtually stopped for this programme. 




Prices of wheat and other essential commodities have shot up in the last few months. At such a time government must make every effort to strengthen the public distribution system to ensure a buffer against starvation and further malnutrition for crores of families who are crippled by even the slightest rise in prices of essential commodities. Data from the National Sample Survey shows that the share of expenditure on food is 60 per cent or more for 90 per cent of the rural population and 60 per cent of the urban population. For the poorer landless sections the percentage on food would be as high as 90 per cent. The food share is a very relevant indicator of poverty to be taken into consideration for any food-subsidy programme to be effective .It shows how sensitive family budgets are to fluctuations in food prices and can make the difference between survival and starvation. The need for the PDS is also reflected in the increased offtake of foodgrains from the PDS. While the offtake in the Antodaya system is around 90 per cent showing the desperate need of people for cheap foodgrains, the offtake for BPL has doubled in the last few years from 73.67 lakh tonnes to 228.45 lakh tonnes in 2005-2006 out of an allocation of 273.20 lakh tonnes constituting 83 per cent of the allocation. As far as APL is concerned, the offtake is much lower because foodgrains are just not available and in many states APL card holders are virtually out of the food security system. The artificial differences manufactured statistically between APL and BPL households have been exposed and criticised in these columns earlier and need not be repeated. But it is worth noting that the planning commission evaluation in 2005 of the BPL categories show that 57 per cent of the poor have been excluded and have been denied BPL cards and instead given APL cards or denied ration cards altogether. The case for universalisation of the PDS and the supply of cheap foodgrains is therefore even stronger then it was earlier given the skyrocketing prices of foodgrains. 


There are essentially four components of the gross mismanagement of the food system intrinsic to the neo-liberal policy framework that has resulted in the present dismal situation when India has to import part of its wheat needs.


(1) The neglect of foodgrain production consequent to the new agricultural policy emphasis on export-oriented cash crops is a major reason for current shortfalls of wheat production. With stagnating wheat production, the danger level in weakening food self sufficiency has already been crossed with the rate of growth of food production falling below the rate of growth of population. Last year the production of wheat reached a low of around 68.5 million tonnes while this year it is estimated at around 71 million tonnes. Soil exhaustion in India’s wheat producing states of Punjab, Haryana and West UP may require diversification but it will be disastrous if government continues to encourage diversification without a policy of bringing alternative land under wheat production.


(2) Wheat deficits to the extent of 20 lakh tonnes below the buffer stock norms leading to imports for the first time in decades are a result of the deliberate policy of the government to cut down on procurement on the one hand and to encourage private trade on the other. In 2001-2002 with wheat production at 69.8 million tonnes, procurement by state agencies was 20.6 lakh tonnes. This year with wheat production estimated at 71.5 million tonnes, procurement has plummeted to just 9.18 million tonnes. The minister’s explanation is that since farmers benefited from higher prices this was, therefore, not a matter for concern. In fact state agencies were disabled by pro-trader changes made in the Agricultural Produce Act. They could now go straight to the farmer in the remotest village, while the FCI can only buy from registered markets; the private traders no longer need a licence or a recognised agent to buy foodgrains thus escaping from market fees which the FCI has to pay adding to its costs; the private traders can go into the market according to their own assessments, the FCI is hamstrung by bureaucratic procedures. Thus big companies like Cargill, Reliance, ITC and even the Australian Wheat Board which has turned out to be the company supplying the imported wheat, went into villages in Punjab and Haryana much earlier then state agencies and offered small farmers a price slightly higher than the 650 rupees official minimum support price. It is only when a large part of the produce had been cornered by private trade that the government offered a bonus of fifty rupees. Big farmers who could hold on to their stocks would have benefited from the higher prices offered later, but the bulk of the peasantry sold their produce to traders at prices below that of the 700 rupees offered three weeks t late by the government. If the FCI had been given the same leeway as private trade, then the present dismal record of low procurement could have been avoided. Shockingly the government offered the Indian farmer almost one hundred rupees less than it paid to foreign traders for wheat it has imported at 789.20 rupees a quintal. The cornering of the stock by private trade has permitted wheat hoarding which has pushed market prices up by five to six rupees a kilo. Thus private trade made a killing both ways, by buying the bulk of wheat at prices only slightly higher than the MSP and by manipulating market prices to two thirds more than what they spent on buying the grain from farmers. A dangerous argument advanced by the minister is that the import of wheat directly to the southern ports actually saved the exchequer 399 crore rupees. According to him the cost of distribution of wheat procured in Punjab or Haryana to the last center in southern India works out to 1120 rupees a quintal compared to 997 rupees it costs for the transport of imported wheat. Decades of building a food security system can be wiped out by such neo-liberal ideologies that undermine the principal of self-reliance. India can spend thousands of crores to protect itself through nuclear might but can render itself completely vulnerable by losing its greatest achievement, the backbone of sovereignty, that of food self sufficiency.


With this approach, the situation on the rice front could also follow a similar disastrous pattern in the future. It also raises the question of whether it is appropriate to combine agriculture ministry with that of food and public distribution which has been done for the first time in the UPA cabinet with Sharad Pawar holding both portfolios. 


(3) The Food Corporation of India is being systematically weakened. Huge amounts are owed to FCI on account of foodgrains supplied by FCI to different government programmes like SGRY or the food for work programme but these accounts do not appear either in the budget or in the account of the rural development ministry. In answer to a pointed question in parliament the finance minister replied that there is no need to show it in the budget as “there is a separate accounting system with the FCI.” The arrears run into thousands of crore rupees. Precisely because the FCI role in procurement and distribution of foodgrains is being curbed, the ability of the government to intervene in the market to control prices is also reduced. In a country where there is an uneven pattern of foodgrain production with a large number of states being food deficit, weakening the FCI means weakening food security. 


Linked to the issue of weakened distribution and the cutting down of allocations is the fate of the 4.83 lakh fair price shops. To use the illustration made by Madhura Swaminathan, there is evidence from Kerala, the state with the most effective system of rationing, of ration shops becoming unviable and closing down. In the early nineties, the average monthly sale of cereals was 7,500 kg of rice and 2,000 kg of wheat per ration shop. By 2001, these figures had fallen to 1,400 kg of rice and 200 kg of wheat. Many fair price shops are now estimated to be making losses. According to an official estimate by the government of Kerala, the gross earnings per fair price shop fell from Rs 3,711 before March 2000 to Rs 1,493 in August 2001. The situation has worsened since then.


(4) The targeted public distribution system has miserably failed. It is nothing but an instrument to privatise universal rights, a mantra which forms the cornerstone of neo-liberal policies. As repeatedly argued by the CPI(M), eminent economists, and activists who are working among the poor, the targeted PDS in a country where the vast majority of people require a subsidised food system, a universal system makes not only moral and ethical sense but also economic sense because of the high cost wastages associated with targeting. The shocking and totally unacceptable proposal to further cut down on quotas and to hike the issue prices of foodgrains in the PDS will spell disaster for an already malnourished population. The immediate need is for the government to implement the longstanding recommendation of the Abhijit Sen report for universalisation of the public distribution system.


The employment schemes of the government with a part payment in foodgrains have been an important part of the provision of food security, though inadequate. The move to cut back on this component is also to cut down on the real wages of the worker. With current high prices of wheat and other essential commodities what the worker gains in cash is less than what she has to pay for her foodgrain needs in the market. 


What needs to be done is to improve the systems, whether of the procurement agencies, the fair price shops or the methods of distribution—but not to destroy them. But that it seems is what the food and public distribution department is proposing. People-centred reform requires a return to the universal public distribution system. If for example, the finance minister of India can ask for votes in his home state of Tamilnadu with the promise to supply rice as a universal right at two rupees a kilo, why should he not apply the same yardstick when framing policies in Delhi. The cabinet must reject the proposals of the ministry led by Sharad Pawar that are contrary to the commitment of the common minimum programme.


There must be a widespread protest to prevent cabinet accepting these proposals and to change the current food policies in favour of the people.