People's Democracy

Oppose Open Market Auction, Export of Foodstocks

The Polit Bureau of the Communist Party of India (Marxist) issued the following statement on September 24, 2012.

THE CPI(M) strongly opposes the government’s decision to sell 10 million tonnes of “surplus” foodstock to bulk consumers like flour millers and biscuit makers through auction under the open market sale scheme as a part of its supposed plan to tackle inflation and dispose the rising foodstocks. 2.5 million tonnes of grain will be allocated monthly through auction for the next four months on a “no profit, no loss basis.” The government, through this decision, intends to transfer food subsidy as largesse and to benefit traders and manufacturers, including big companies and not to those in hunger and food insecurity. It is totally irrational to claim that this will control prices.

The utter failure of the UPA government to control food inflation is shown by the August figures that food prices had gone up by 12.03 per cent, which was before the recent hike in diesel prices which will lead to further rise in prices. The Consumer Price Index (CPI) was 10.03 per cent in August, and the Wholesale Price Index was 7.55 per cent, mainly due to a rise in food prices. India has the dubious distinction of having the highest retail inflation among emerging BRICS nations.

If the government is interested in controlling prices, a most obvious step would be to increase supplies through the public distribution system. At present the government is holding around five crore tonnes of surplus stocks of foodgrains. Instead of “liquidating the stocks” by auction or exports, the grains should be distributed universally, scrapping the discriminatory APL/BPL divisions with a minimum allocation of 35 kg of foodgrains of good quality per family at the maximum price of two rupees a kilo. This should become a legally enforceable right in the next parliament session.

The CPI(M) demands that the government should reverse this decision.