(Weekly Organ of the Communist Party of India (Marxist)
September 12, 2010
TACKLING FOOD INFLATION
Kerala’s Successful Experiment in ‘Onam’ Season
AS food inflation is skyrocketing, Kerala, being a consumer state with food deficit, is facing mounting challenges. The livelihood of lakhs of people here is being harmed by the neo-liberal policies of the central government. However, the public distribution system (PDS) of Kerala, which is world renowned, has indeed helped the state people to face the crisis to a significant extent. Within the short span of four years, the food allocation to Kerala has been curtailed by 81 per cent. But, for the sustainable continuation of the PDS, the state government is providing food grains to 41 lakh people for Rs 2 per kg, irrespective of whether they belong to the APL or BPL category.
Recently, the Supreme Court directed an end to the subsidised food for the above poverty line (APL) category, which amounted to a big setback to Kerala as, on the basis of the central government norms, the below poverty line (BPL) population in the state is quite small. Immediately after the SC verdict, however, the state government decided to provide subsidised food grains for an additional five lakh people and also decided to file a review petition before the SC regarding its order on food subsidy.
In sum, though the state is facing a lot of challenges, it is bravery implementing alternative policies.
This is amply clear in the Onam season every year when the prices of all the essential commodities are very high. However, as in the past, the LDF government made alternative arrangements this time as well, and thereby it successfully curbed the food inflation. The government directly intervened in the market through its Consumerfed (controlled by the Department of Corporation), Supplyco (controlled by the Department of Civil Supplies) and Niravu (controlled by the Department of Agriculture), and also through hundreds of cooperative societies and Kudumbasree units.
The result was that the state “government initiatives put a lid on prices. Prices at vegetables melas were 30 per cent lower than in open markets. Government agencies are flooding the market with essentials, including vegetables, in a bid to keep their prices under control in the open market” (The Hindu, August 23).
The turnover of the Supplyco, as an example, was Rs 470 crore during the peak Onam days; through it, 1.3 lakh metric tonnes of essential commodities were sold. Throughout the state, the Supplyco had had 3100 Onam fair shops which supplied 13 essential items with 50 per cent subsidy. The rice, which sells at Rs 30 per kg in the open market, was being sold at Rs 12.70 per kg.
Kerala gets most of the vegetables from the neighbouring states and lack of self-sufficiency in horticultural production threatens to push up the prices of vegetables and fruits. But the Agricultural Department, in cooperation with Horticulture Mission and Fruit Promotion Council of Kerala, organised Niravu vegetable melas. So vegetables, bananas, pineapples, tapioca chips, honey, payasam, pickles etc were available at Niravu shops in all district and taluk headquarters. There the prices of these products were 30 per cent lower than in the open market. One lakh vegetable kits were also distributed at subsidised rates through mobile unites.
Consumerfed had had 6000 Onam outlets and achieved a record turnover of Rs 120 crore, as against Rs 80 crore during the 2009 Onam season. Through the Consumerfed, 43 items were distributed at subsidised prices --- lower by 15 to 70 per cent than in the open market.
The Kudumbasree, the self-help group (SHG) of women, organised 1025 Onam fair shops. They distributed various items which were produced by two lakh Kudumbasree members. The Sugandha rice cultivated by Kudumbasree units in Wayanad and Sishira vegetables cultivated by Kudumbasree units in Kannur and Iduki were in great demand. Kudumbasree had had the turnover of around Rs 10 crore during the Onam season.
Apart from the government owned agencies, the state government of the Left Democratic Front directly distributed 12 kg of rice to 1.67 lakh tribal families each, 5 kg of rice to students from Class 1 to 8, 4 kg of rice to the children in Anganwadis free of cost. The LDF government also distributed free Onam kits to 20 lakh BPL card holders.
Around two crore people were the direct beneficiaries of these government interventions, which had had an impact on the open market as traders were compelled not to raise the prices of essential commodities. The government action thus nullified the tactics of hoarders and black marketers. Consumers were also found hesitating to go to the Big Bazaar as they got all the essential items at lower than the Big Bazaar prices.
The Kerala’s Onam experiment amply proved that a people oriented government’s intervention can indeed control the food inflation.