Dilution of grain quality standards -Its impact on food scenario in India

The Minimum Support Price ( MSP) scheme offered by the Government for many commodities is to counteract the depressing market prices often manipulated by middlemen working in rural regions fleecing the farmers, especially when there is a production glut. Quality standards are in vogue based on which procurement operations are done. Many pundits feel that if India has achieved self sufficiency in food grains with enough quantities in the granaries for ensuring long term food security, these MSP programs are to be applauded. It is another matter that Food Corporation of India has been finding it difficult to manage the logistics of storage with a part of the procured grains becoming unfit for human consumption. Here again there is a raging debate whether silo storage or gunny bag storage is more suited to Indian conditions with both sides having their own points for justification. What stands out in this debate is that government, who ever has been ruling the country, could not do much to save grains going rotten inviting condemnation even from the Supreme Court of the country!

One often wonders what would have happened if there was no MSP program in India? Will the production base shrink? Will there be unbearable price escalation in the grain market? What would be its impact on the Public Distribution System (PDS)? Would there be more farmers' suicides? Will there be large scale starvation? Will the farmers abandon agriculture and increase the already high rate of urban migration?  Very difficult questions to answer! During the current year government diluted the food grain quality marks to accommodate offerings from farmers in some states where there were unexpected weather contingencies in the form of nonseasonal rains which are supposed to have damaged the harvest. It is a moot point whether such standards are to to be meddled with for the sake of convenience from time to time. Where is the sanctity for National Food Standards? Can government relax the provisions of food safety regulations allowing private traders to indulge in adulteration because of this situation? Again difficult to get a clear answer. 

Another dichotomy in the system is that government has quality standards for buying from the farmers but is least concerned with what happens to these grains after procurement and storage for years together before distribution at the PDS out lets? It is common knowledge that most consumers who depend on PDS supply for their survival find it hard to use these sub-quality grains unfit even for feeding animals!

Tragically food safety inspectors seem to have been "instructed" not to "touch" the so called ration shops for quality checking in the national interest! Accountability is a non-existent word in the dictionary of those handling food grains in this country, with all of them going scotfree for negligence, callousness and dishonesty in depriving the citizen of wholesome foods! The political gimmick now being enacted in the name of Food Security Act probably will worsen the problem further because of increased burden in procuring adequate grains for supply to the "entitled" citizens. Giving cash in lieu of entitled grains through jan dhan banks is another gimmickry because government is going to give to the deprived consumer cash, equivalent to the MSP price of these grains. In to day's market where rice and wheat are sold at prices varying from Rs 35 to 60 per kg, how much grain can be bought? Will it extinguish the fire in the tummies of poor and famished due to hunger?    

How is the government going to use the food grains procured during the current year? Is it legal to supply them under the Food Safety Act? Food Corporation of India (FCI) generally follows a practice of 'First In First Out' (FIFO) using the freshly procured to replace old stocks which are channeled into PDS. However the wheat currently being procured is not in a condition to be stored for long. According to experts most of the grain procured suffer from lustre loss, which is supposed to make it vulnerable to pest attacks, and thus long term storage of the crop is highly risky. FCI is supposed to supply food grain mostly consisting of rice and wheat to PDS from the previous stocks, while the new crop being procured is stored for about 2-3 years before routing through the distribution channel. .FCI supplies around 22 million tonne of wheat annually to the PDS. but this time the procurement is targeted to be 30 million tons for operationalizing the food security act. This has made the Government to relax the quality standards and pressure from Haryana, Uttar Pradesh, Gujarat and Madhya Pradesh,has further compounded the problem resulting in compromising with grain quality. Of course some minor value cut equivalent of around Rs 3.63 per quintal from Rs 1450 per quintal minimum support price was imposed on the grains not adhering to the food ministry's revised quality norms. The purpose of relaxing norms was to ensure that farmers in key wheat growing states could get almost the entire MSP for the wheat sold to FCI and state-owned agencies, irrespective of quality.

A relevant question that begs for an answer is the dynamics of management FCI has in mind to segregate the procured wheat this year so that they do not get mixed up with the existing stocks in warehouses from where PDS outlets get their supplies. How far the new policy of sending the freshly procured directly to the PDS outlets will affect the quality of the existing stocks some of them nearing their expiration period is an important question. Of course one has to sympathize with the current government which inherited such a chaotic system with no long term vision in mind and "managing" during the last few decades almost on a fire fighting mode! Probably it may be time to rethink these issues more deeply and evolve a long term policy for managing the food grain market in the country.

V.H.POTTY
http://vhpotty.blogspot.com
http://foodtechupdates.blogspot.com

POVERTY DEBATE-STATISTICAL JUGGLERY BASIS OF TALL CLAIMS!

Food Security Bill, now brought into effect through an ordinance, by-passing the Parliament, is riddled with lot of contradictions with no one in the government coming out with any clarity. Many skeptics wonder whether this is a deliberate ploy by the government to confuse the electorate and win the next election! Otherwise it does not make any sense for the very same government to come out with some statistics in its latest claim on poverty reduction which seem to have taken many experts by surprise. What is the ground reality?

According to the figures prominently flashed across the media during the lat two days the present government was so "committed" to the poor man, it has reduced by magic the extent of poor people in the country, the so called BPL population, drastically by a whopping 15.3% within a matter of 8 years! These comparative figures pertain to the years 2004-2005 and 2011-2012, the period the present government has been "burning midnight oil" to "uplift" the population from abysmal poverty! Probably during 2012-2013, the percentage must have dropped further due to the "hard work" of this government, in spite of all scams that had taken place draining   

billions of rupees from the exchequer! Now the million dollar question or quiz is how many Indians are poor in absolute numbers to day?

If the ruling elite is to be believed there are only about 240 million people living below the government fixed BPL benchmark. However the cat is out of the bag if these figures are scrutinized a little more critically. A poor person really becomes a government certified poor person if the personal income is between Rs 35 and 27 per day depending on whether this person is living in urban area or rural hinterlands! One wonders whether such a person really exist in this country any more as this pitiful amount cannot get even a part of daily necessities required for keeping the body and the soul together! Probably such a person must be not be wearing any dress daily, may not have a roof above the head, must be walking to all the destinations, has no access to nutritious foods like milk, pulses, eggs, meat, fruits, vegetables etc! Rs 27 can definitely buy cereals with adequate calories so that life in absolute terms is not severely threatened though the quality of health must be very very low. 

If this is the real condition for 240 million of the population, the food security bill is more than justified in giving them rice or wheat at Rs1-3 per kg at the rate of 5 kg per person. By giving about 165 gm of cereals providing about 600 kC per day government probably wants to keep this poor person alive hoping that the Rs 27-35 earned by this "icon" will be used to top up the calorie content to the daily minimum requirement of 2000 kC. But in the actual scheme of things, the government is being more than magnanimous by covering two thirds of the country's population under its food security phobia. Why? Does the government have unlimited funds ( collected from honest tax paying citizens) to squander like this? If the government really feels strongly about the pitiable conditions of these people identified above, why not ensure that they are adequately provided with enough cereals to meet their total calories needs at least? Probably this can be done by restricting the number of people covered and diverting the grains so saved to be given to the real BPL people? 

The real intention behind such a diabolical scheme, as being felt by many honest citizens in this country, is to "bribe" as many people as possible with state resources to collect "I Owe You" sentiments that is anticipated to be converted into votes during the next general election. Interestingly the most recent Census by government's another agency puts the number of BPL people at about 50% of the country's population based on quality of life and their aspirations. According to this version a person earning less than Rs 10000 per month or Rs 333 per day qualifies to be called poor and all others are above poverty line. If the government feels there is a resource crunch, take the figure of Rs 150 which is fixed as daily wage under the MGNREGA scheme paid for 100 days in a year which works out to Rs 50 per day per person. Under such circumstances what government ought to be doing is to just help these people to supplement their food requirement through subsidized foods which will make their lives more sustainable. This is what is supposed to be accomplished through the Public Distribution System (PDS) that is in place to day throughout the country. It is another matter that the PDS is a disease stricken arm of the government afflicted by corruption, bribery, pilferage and looting with hardly 40% of the targeted beneficiaries being really "benefited" with the rotten quality grains delivered through the so called ration shops. 

Instead of rectifying the faults of PDS where is the need to think in terms of enacting the meaningless food security bill which can never fulfill the needs of the poor people in the country. Even under the PDS what is the mechanism to identify poor people who really deserve help from the state? The burden on the PDS could have been reduced considerably if those really poor are identified through a very reliable mechanism, those falsifying the financial status being severely dealt for fraudulent practice. Laxity in management and criminal collusion among some politicians, bureaucrats and criminals have literally destroyed the PDS activities in most of the states with very little being done to plug the leakage of grains. 

Common sense tells that government must separate politics from matters involving life and death to millions of people and any poverty alleviation program must be based on bipartisan decisions through consensus.  Ask any citizen in the country about what must be done to ensure equity and fair deal for the common man and the answer will be a vociferous assertion that PDS must be made more efficient in delivering the essential foods in adequate quantity and quality to those who really deserve them, not for others who can financially afford to access such foods from the open market. The crux of the problem is how, who and when a honest exercise would be done to identify the deserving beneficiaries on whom the state can expend the public resources for bringing them on par with other citizens.       

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com

CASH TRANSFER OR GRAIN TRANSFER?-THE NEW CONTROVERSY

A raging controversy is going on at Delhi regarding the fate of the Public Distribution System (PDS) which was designed and given shape over years of efforts to protect the poor and the impoverished from the scourge of hunger. Though in paper the PDS is one of the marvels of Indian ingenuity, the ground reality tells a different story. With a network of more than 400000 retail outlets popularly known as ration shops, PDS is well placed to deliver food grains to targeted population but is plagued by pilferage to the extent of 60% by grain mafias working with impunity and invariably under the tutelage of corrupt politicians, depriving many of those eligible to receive the state largess. Presently each family belonging to Below Poverty Line (BPL) as defined by the government norms based on economic status is supposed to receive 35 kg of food grains besides sugar and kerosene at subsidized rate. If the system works efficiently and honestly poverty would never be an issue in the country.

There was a time in India's past when every family had a Ration Card (RC) for getting rice, wheat, sugar and kerosene at subsidized rates and RC doubled as an important document for establishing the identity of a family with address. Due to exclusion of middle class families and upper income groups from the purview of PDS the relevance of RC was lost in many states and "targeted delivery" became the norms under which families were divided into below and above poverty line categories. This complicated arrangement has created so much confusion that there are millions of bogus RCs floating in the country and added to this lack of efficient monitoring practices made it a free for all situation with pilferage becoming a norm rather than an exception. While every body including the Planning Commission recognizes this bitter truth, precious little is done to stem this rot and grain looting goes on merrily!

The National Advisory Council ( NAC) which is a parallel center of power at Delhi wanted GOI to radically change the PDS program with a heavy political agenda and according the recent Food Security Bill being drafted by this body, each person will have the entitlement in stead of treating family as a unit and population will be divided into priority and general category beneficiaries. 46% of the rural population and 26% of the urban population will come under priority category while 29% in rural households and 22% in urban households form the general category beneficiaries. While priority beneficiary is entitled to get 7 kg of food grains per month at subsidized price, general category beneficiary will get 3 kg of food grains. The draft bill is vague with respect to many details and it is unlikely to become a law immediately. Probably it is being reserved for the 2014 general election to capture the "aam aadmi" votes!

Interestingly the powerful World Bank (WB) which has always meddled with the economies of many developing countries as a quid pro for disbursing soft loans, has a different agenda on food grain transfer system presently in vogue in India. According to their recent report, India has to wind up its PDS and in stead put in place a "cash transfer" program that will give Rs 1100 for each BPL family in lieu of supply of subsidized food grains. The assumption is that this money will be used by the household to buy its food grain requirement from open market. Though the concept is good on paper, it is doubtful whether this system will work in a country ridden by one financial scam after another and the credibility of the government is at its lowest ebb. If food grains mafia has taken control of the PDS, the cash transfer regime can be expected to create economic mafia with expertise to usurp the "food grants" from the poor beneficiaries through many ingenious ways. Ultimately it is the ability to manage that counts and India has amply demonstrated that it has a long way to go to muster even a "pass" in this area, let alone "distinction"!

The logic in the WB argument is that PDS incurs Rs 45,000 crore every year to supply BPL families wheat, rice, kerosene and sugar of which 60 per cent of grain is looted by the food mafia is understandable. But its remedy in the form of "cash for food grain" alternative is fraught with many implications not understood by this multilateral financial institution. For instance WB is not clear as to how this financial largess will be monitored, or whether the sum suggested is adequate enough to feed a family of at least four members. Is it not interesting that while the NAC is pressurizing GOI for increasing allocation of food grains to the poor under the proposed Food Security Act, the Government seems to be actively considering the WB report. What will be the fate of the existing ration shops? What about the grain procurement and storage functions being carried out by the Food Corporation of India? How will the country manage to insure food security through food reserves as per international norms? If reports are to be believed "cash for grains" program is being tried in Delhi on a pilot basis and eventually GOI may allow options to the states to choose between "grain transfer" and "cash transfer" systems depending on their ability to manage!

V.H.POTTY
http://vhpotty.blogspot.com/
http://foodtechupdates.blogspot.com