Thursday, November 22, 2012


No matter who governs, feeding a nation is an onerous responsibility. A vibrant government should always foresee food security problems well in advance and drought or floods should not be excuses for food shortages and unreasonable price escalation. Food security of a country hinges on a number of factors and adequate buffer stock as per universal norms can be a cushion for absorbing shocks due to occasional production falls on account of any reason. That way India has been well served by the huge grain stocks being held by the government during recent years though one can fault the government for not ensuring they are held in sound storage conditions. If the government did not plan in advance building of adequate storage infrastructure for food grains, what can be done with the surplus production?. Here is where there is dilemma, whether the country should export or distribute it free as being suggested by the Supreme Court some time back. If adequate planning is done the government could have managed such situations more efficiently in stead of resorting to last minute fire fighting mode. Unless there is a long term export policy in place, country cannot get maximum returns on its agricultural products and this is what is being debated during the last few decades but with no firm plan still emerging.      

If recent reports are to be believed India wants to be projected as a reliable source of agriculture commodities and the federal government is "toying" with the "idea" to "formulate" a long-term export-import policy for farm products. What has opened the eyes of the government is the bumper crop production of 257.4 million tonne last year and the huge surplus created by that situation. It is reported that government has at least about 45-50 million tons surplus after meeting the buffer stock need of about 21 million tonnes. It is true that, as a temporary export initiative, government did allow grain exports, mainly because of good global prices prevailing then. Export of agricultural commodities was invariably being determined by the perception about domestic need which rightly has a priority always and threat posed by any eventual shortages. But in the absence of a sustainable export policy, India has been finding it difficult to penetrate into new markets even in the years of surplus production resulting in losses to farmers as well as the government. This "switch-on" and "switch-off" policy on exports has not helped the country's image as a reliable supplier of commodities like rice wheat and sugar in the world market place. During the last two years it has been proved that any apprehension regarding adverse impact of food exports is misplaced and such exports should be part of a long term national policy, not to be tinkered every now and then. 

The excuse that large scale exports will depress international prices for some of the commodities like rice and wheat may be valid to some extent but if the country can strike long term agreements for mutual import-export of these vital food commodities with countries identified as friendly, it should be possible to over come deficit or surplus conditions without any major hiccup. Alternately surplus, if cannot be scientifically stored with available storage capacity, must be exported without bothering to care about international prices. After all many times in the past India had imported foods at high costs to meet food shortages without bothering about the cost. It is better to get some returns through export rather than allowing them to rot. 

Suggestions have also been made in the past to have a policy under which the surplus grains that cannot be stored must be
converted to alcohol which is after all not perishable, for commercial use while during shortage period alcohol from grains must be curtailed. If there is a flexible gasohol policy the alcohol produced can  easily be absorbed by the fuel industry. Alcohol is a vital industrial commodity with scores of uses and inter linking surplus gain production with alcohol production can ameliorate the situation to a great extent. This also calls into question the advisability of encouraging sugar cane cultivation in the country as this crop, not considered an essential nutrient source, locks up considerable extent of fertile land which other wise could have been used for pulses and oil seeds which are imported to day at great costs. It may be true that sugar cane cultivation brings in returns much higher than that by any other crop to day and hence suitable financial incentives will have to be given to the sugar cane farmers to switch over to pulses or oil seeds. Only such forward and daring policies can solve India's food problems. 

Will it be Utopian to think in terms of a world bank for food grains that can get contributions from different countries to build up a buffer stock at least for rice, wheat and corn which will be available for member countries for drawing at times of emergency to prevent domestic shortages?. It is like the present World Bank which lends money to member countries from its funds for developmental projects to be returned in due course. How far the rich nations will cooperate is a valid question and the third world countries must press for such a cooperative move to insure their population against food shortages from time to time. Already regional groups like SAARC have limited food grain banks though the magnitude of stocks held by them is minuscule compared to actual need.

Amid all these discussions, a moot question is whether there will be any surplus situation at all in future once the "charitable" food policy of the government distributing food grains to 65-70% of the population, deserving as well undeserving, at throw away prices comes into vogue soon. According to some experts the procurement of food grains to meet such an obligation will be huge and practically the entire surplus as being seen to day may evaporate! If that happens, government need not "toy" with any plan to have an export policy at all! 

No comments: