Wednesday, April 10, 2013


Is India becoming a laughing stock among the comity of nations that constitute global society? If not already the butt of the joke internationally, it might soon be because it is literally trapped between the proverbial "Deep sea and the Devil" Why is that this country thinks about only immediate problems in stead of focusing on long term planning? There is a high profile National Planning Commission (NPC) which keeps its high profile only among the media people and in any walk of life in India NPC's foot prints are hardly perceptible which makes the common man wonder whether the country would be better of with out such a high powered body becoming a drag on the public exchequer. The provocation for this critical blog piece is the charade going on in a place called Delhi where the most favorite game is called "passing the bucks"! This is with reference to the crisis created by the political-bureaucratic mess in managing food production and stocking during the last one decade. To day with a bumper production on hand every one is running around asking the same question "what to do" now.

It is a tribute to the suicide prone Indian farmers that they did not fail the country in spite of wide spread poverty and hardship in raising production consistently and provide ample food to those not involved in agricultural avocation. It is another matter that the price gap between farm gate and retail market keeps widening with each passing day with the spineless governments watching helplessly from the side line, the beneficiaries being the so called middle men who call the shots in the market place. It is really frustrating for the common man to see the prices of food grains jumping by 50% during the last 3 months while government spokes persons are shouting from the roof top about bumper production this year! According to dispassionate observers, India, world's No 2 wheat producer, is anticipating a bumper harvest this year and procurement operations are about to start all over the country. The pathetic side of the story is that food grains that will be procured during the season will have no place to go as the ware house capacity in the country is woefully inadequate for the purpose. Even at a liberal estimate the "orphaned grains" with no roof over it for protection would be adequate to feed almost half the population of the country for an year!. 

What will be the strategy, if at all one is there, to manage the impending grain mountain without allowing the Supreme Court again to intervene for forcing government hands? Apparently the matter is still under "consideration" and if the past is any indication any decision taken will be too less and much delayed! Repeating the claim that the GOI has already accorded permission to export 4.5 million tons makes little sense as this quantum is a minuscule part of the surplus grains this year. Inspired reports suggest that GOI is deliberating whether to allow another 5 million tons for export. Why such prevarication on the part of GOI is difficult to comprehend though next year's general election could be a critical factor to be factored in such a decision. In other words for the GOI political interests are far more important than the welfare interests of the country! Some times one gets the impression that a soft bellied country like India which kneels before all and sundry is a prisoner in the hands of super wealthy nations and business conglomerates who are worried that global market will become unstable if India off loads large quantities of food grains in the international market! Should such considerations weigh heavily in taking right decisions in the larger interests of the country?     

It is true that better harvests are expected from top grain producers like Australia, the United States and the Black Sea countries and if every country comes to the global market there will be a depression in market prices. it would put further pressure on global prices. Recent reports do suggest that wheat prices fell to an eight-month low a few days ago because of heavy speculation about better outlook for crops in the US. But should India be unduly concerned about such manipulated market perceptions? With the value of rupee at an all time low, realization to the Indian exporter in rupee terms would still be adequate to gain enough margins based on large volume export. Why not target the exports to poor countries in Africa where the populations there would be ever grateful if low cost grains are made available to them? Why not India indulge in long term treaties with these countries for delayed payments so that the surplus grains find use among those who really need them, where ever they are, in stead of rotting in the open?  

Another difficult decision this nation may face is how to go about exporting the grains to distant lands? If logistics experts are to be believed, shifting huge volumes of grains within India is going to be a nightmare and probably unthinkable at this point of time.  Assuming that adequate carrying capacity is created on an emergency basis in railways and private road transport sector, what about the existing capacity of the ports through which the exports are to be effected?  Imagine the strain on these ports, already choking under the load of merchandise waiting to be shipped, if additional demands are made on them, during June-July period! Grain stocks with the government are expected to exceed 100 million tons while the present storage capacity is hardly sufficient to hold 50% of it! What can happen then is any body's guess. According to the grandiose "plan" of GOI, the storage capacity for grains, railway freight capacity and port handling capacity are to be raised "substantially" "soon". How soon it can be? By 2017! In the mean time what is going to happen to the grains in governments hands under monsoon rains during July-September which can really soak them beyond any use?! 
It appears ships are waiting for months together in the seas near almost all east coast ports for want of berthing facilities and how can the surplus grains be exported. Air lifting is not a choice as it will be highly cost-ineffective besides being impractical under the present conditions obtaining in India. If India had good relations with countries like Pakistan and other countries road transport would have been one of the options but here again how far private carriers will be willing to do this is a big question. The proposed food security bill still not enacted could have absorbed a significant portion of the grains in stock but no one knows when this is going to happen. Government of India can never be pardoned for its lackadaisical policies of the past and delays in decision making for the sorry pass this country has come to as far as food storage is concerned!  

Some times economic prosperity can be a curse for a country with unimaginative and unresponsive governments which cannot see any thing beyond its nose! India boasting to be the third largest economy in Asia is teeming with population with more disposal income in their hands clamoring for all types of modern luxury goods which are to be imported through the same limited infrastructure. Besides the perennial scarcity of legumes and cooking oils tie up a substantial portion of the infrastructure almost on a permanent basis. The record current account deficit  is posing yet another crisis for the GOI and export of all types is the need of the hour. Under these circumstances is not the GOI in a catche 22 situation with a "Hobsons Choice"? With the election bell ringing, the present federal dispensation may be too happy to be voted out in the coming general election, leaving the messy job to be handled by the new government! 


No comments: