Thursday, August 5, 2010


India continues to be an intriguing country when it comes to food and hunger. On one hand there are millions of its population supposed to be starving because of food shortage. But if the gross production of food grains is taken into consideration, the per capita availability is more than adequate to meet the energy needs of an individual as per international health norms. Unfortunately the skewed storage and distribution realities combined with inadequate purchasing power with a substantial part of the population affects adversely regular access to the foods available in the market. Added to this the market manipulations by the traders and middlemen continuously escalate the food prices as reflected by the inflation presently experienced in the country.

Thanks to the Green Revolution India became one of the largest producers of wheat, a stark contrast to the old PL-480 days, when imported wheat made up a significant portion of wheat availability. If per capita consumption rate is taken into consideration the country produces sufficient food grains for the entire population. As the production is heavily dependent on Monsoon rains there were shortfalls in production periodically necessitating imports to some extent, at prices much higher than the local procurement price, expending precious foreign exchange. The past experience does not seem to have taught any lesson and the present production glut is again posing serious logistical problem to GOI in saving the grains from spoilage. The situation is probably desperate which seems to have provoked the Supreme Court of the country to wonder whether these surplus grains should not be distributed to the poor and hungry in the country in stead of allowing to rot in the open. Probably such an approach may help relieving the food inflation currently hovering around 16% due to insufficient quantity circulating in the market. It appears that, while the learned judges felt that wasting even a single grain is a crime, the insensitive political class probably is not that much concerned about the unfortunate situation prevailing in the country.

A critical look at the present grain scenario brings out the startling fact that the government agencies vested with the responsibility of grain procurement in the country is holding about 59 million tons (mt), mostly wheat and rice, under their custody, a quantity sufficient to meet the needs of more than 15% of the population for a period of 12 months. While the existing grain storage facilities can hardly hold about 42 mt, remaining portion is stored under temporary, improvised storage facilities, commonly known as CAP storage where tarpaulins over the grain sacks provide some protection from the elements. As per the food security norms and the buffer stock policy of the government only 20 mt of food grains are to be held perpetually for meeting unforeseen future contingencies. Ban on exports of food grains in 2007 also contributed to this food surplus situation and any revocation of this ban can have an inflationary effect on world food grain prices. If critics are to be believed about 10 mt of these grains are likely to be lost due to rotting, infestation and other vectors.

The above unenviable situation seems to have put the government in a great dilemma as to what needs to be done. It already has a scheme to distribute rice and wheat at vastly reduced prices to those families branded as Below Poverty Line (BPL) but whether all the deserving beneficiaries are receiving their share is a matter of speculation given the poor management, monitoring and accountability associated with grain distribution. Though the Cricket-obsessed Food Minister has declared his "plans" to introduce RFI tagging system to improve the distribution, when this will happen remains to be seen. Building of storage infrastructure for food grains should have been taken on a priority and present pitiable condition is the result of years of neglect of this infrastructural need. The graphic image of food grains rotting outside a warehouse in Jaipur while liquor was being stored inside is still fresh in the memory of many discerning citizens literally causing revulsion at the situation brought about by the inefficient management of grain storage and distribution in the country.

Probably government may have to go for some sort of a Private-Public Partnership in boosting the storage capacity without further loss of time. Private sector is sure to come to the help of the government provided long term commitment is made to use their storage structures guaranteeing them a minimum return on their investments. The cold storage industry in the private sector has large capacity built over the years for commodities like fresh produce, largely potato, apple, fruits and vegetables, spices and condiments and other perishable items and there does not appear to be any dearth of business for them. Resorting to CAP storage developed years ago for temporary storage of grains in places where vast areas are available with concrete flooring cannot be a long term solution because of many logistical considerations. Not only it requires frequent fumigation to keep away infestation which can destroy the quality in no time, if not properly protected, its vulnerability to pilferage can be a serious handicap.

It was not many years ago that India was in a similar situation with surplus food stocks and one of the options considered then was to use them for converting into alcohol for industrial use but this option was not exercised for some reasons. Another suggestion was to move them to cooler climates near the foot hills of Himalayas, probably an over ambitious scheme considering the lack of infrastructure for the transport and the likely cost involved. As is usual with the government, every thing is forgotten once the crisis passes till yet another arrives. Hopefully the current serious situation may yet spur the government to create additional grain storage facilities like Silos and Concrete ware houses which after all permanent assets of the country.


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