Sunday, June 25, 2006

By Gyan Pathak

Indian National Congress has now changed itself to the extent that it is engaged in undoing even the best of the things the erstwhile party leaders had done for the country. The case in point is the issue of food security for the country, remunerative prices for commodities to the farmers, food grains at affordable prices to the poor, creation of fair price shops for all, and the related matters.

Let us take one by one. We have a system of giving Minimum Support Price (MSP) to the farmers for their crops. We needed this system to cover all the crops and in all the states of this country. However, it has never been done.

The governments at the Centre has been claiming for years that the farmers were getting remunerative prices for their crops as MSPs. However, the governments of The Punjab and Haryana have always been demanding more hike in MSPs on the logic that the cost of farming were increased. In the present system, Commission for Agriculture Cost and Prices gives its recommendations to the Centre but they are not binding on the government. The contemporary politics of the country influences the government decisions. There has always been discontent on the part of the farmers because they think they are not being getting fair prices for their commodities. And, this year, it has been sufficiently proved that their grievances were genuine.

Earlier, traders and MNCs were not allowed to purchase directly from the market, and the Government of India has always been claiming that MSPs were higher than the market prices. This year in the wheat procurement season, traders and MNCs were allowed to purchase directly from the market, and people saw that MSPs were lower than the market prices. MSP for wheat in the recently concluded wheat procurement season was Rs 650 per quintal against Rs 640 per quintal in 2004-05. It was decided by the Cabinet Committee on Economic Affairs in a meeting chaired by the Prime Minister Mr Manmohan Singh. This price was much lower than the market price set by the private traders and MNCs. This compelled the government to announce additional bonus of Rs 50 per quintal to the farmers, but by the time this announcement came the private traders and MNCs had already purchased over 60 lakh tonnes of wheat. The government agencies could procure only 92 lakh tonnes of wheat, much lower than the requirement for running even Public Distribution System.

Was the MSPs this year set intentionally low to give benefit to the select big traders and MNCs? This question seems to have some weight because the Centre has now decided to purchase wheat from the traders and MNCs at current market prices much higher than the MSP plus the bonus given to the farmers. The additional cost is to be borne by the government that will be treated as subsidy for food grains that is to go directly to traders and MNCs.

Even the decision to allow private traders and MNCs to purchase directly from the market was taken by the BJP led NDA government at the fag end of its tenure on the logic of tackling “the problems of plenty”. However, the real intention was to give profit to the traders and MNCs, who were to be given reimbursement of costs incurred in transporting and export as per the rules of WTO. That too was to be treated as food grain subsidy.

This Congress led UPA government followed this decision with great enthusiasm and allowed them to purchase directly from the open market this year.

Hoarding of food grains was an offence earlier under Essential Commodities Act. However, with the adoption of new policy, the act itself lost all meanings. Traders and MNCs are keeping huge stocks with them resulting in steep hike in food grains.

Were those decisions of the government wrong? Obviously, Yes. The problem in which we have landed proves this.

Now take up the case of Public Distribution System. We have fair price shops for the people above the poverty line category and subsidized food grains distribution system for the people living below the poverty line.

Blackmarketing is a well known phenomenon in our country by which traders are getting more benefits than the poor for which food grains are being sent. Government officials are also beneficiaries of this loot. Actions against the culprits are almost negligible.

A great problem in this PDS is the access of the poor to the food grains. Most of the dealers in this country are not sufficiently rich to purchase the whole stock of food grains and other commodities allotted to them. They are not even financed by banks resulting in their dependence on individuals willing to give them some money. The dealers take money from individuals and partially or fully pick up their stocks depending on the amount of money available with them. After that they need to return the borrowed money for which they sell some amount of commodities in the blackmarket. The rest is kept for the fair price shop. Obviously, most of the poor and other individuals do not get the essential commodities intended to be given to them. This problem has never been tackled properly, despite the fact that we give dealership to the people who are not rich.

Now take the example of Food Corporation of India that had been created with the objective to assure food security in our country. Firstly, it has never been enabled to tackle even the procured food grain stock in the National Foodgrain Pool. We termed this as a “problem of plenty” because we did not have sufficient number of godowns to keep the stock and we did not have other proper shelter to keep the food grains. That resulted into destruction of hundreds of tonnes of food grains kept in open.

We had had self-sufficiency in food grains at national level and we were waiting for food security at household levels. However, our planners and other lobbies had different things in their mind. Efforts were initiated to dismantle the FCI itself. The burden of food grain procurement was tried to be shifted to the States and finally traders and MNCs were given free hand in purchasing directly from the market. We have now a weak FCI who failed to procure the needed quantity of wheat this year even for the PDS.

The result is before us. Farmers from all over the country are not getting remunerative prices for their crops, people are not getting them at fair prices, poor are not getting the allotted quantity in full at subsidized rates, the nation is spending more money from the exchequer to run the PDS and traders and MNCs and other individuals from inside and outside government are taking maximum benefit of these changes. We need to immediately change it otherwise we would land into greater trouble. (EOM)