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

HELPING THE POOR WITH FOOD-WHAT IS THE BEST DELIVERY SYSTEM

The much touted Food Security Act (FSA) has been rolled out by the "vote eager" government expecting rich dividends during the forth coming general elections in the country. Now that 67% of the population have a "right to food" (whatever that means!), the million dollar question is how to manage the delivery of food grains promised to the right beneficiaries? Going by the experience so far no one in the country is happy with the post-FSA experience and even the government has no clue as to how to achieve even a fraction of what is promised under the Act! Many helpless citizens wonder why the existing Public Distribution System has been side lined, though it has many defects and deficiencies. According to international experts the most efficient way of delivery is through a voucher system that can ensure not only grain security but also nutritional security. Comparison of different delivery systems makes interesting reading and the following extracts of a report by International Food Policy Research Institute provide compelling reasons as to why the voucher system is the most efficient one. 

"WHEN times are tough, how should governments in poor countries ensure their citizens remain fed? In the past most of them used subsidies to keep food prices low for all their citizens. But these policies have become unsustainable: the cost of maintaining Egypt's food subsidies, for instance, nearly doubled between 2009 and 2012. And much of the money goes to the wrong people. In Burkina Faso, Egypt and the Philippines less than 20% of spending on food subsidies goes to poor households. In the Middle East and North Africa only 35% of subsidies reach the poorest 40%, the IMF reckons.

Motivated, in part, by a desire to curb growing budget deficits, many countries are replacing broad subsidies with policies aimed more directly at the needy. But what form should the targeted aid take? Earlier this month Iran introduced free handouts of food to replace its subsidy schemes. Other countries, such as Indonesia and Malaysia, have chosen instead to provide extra cash benefits to the poor. So far, vouchers have been the least popular option. Proposals to introduce food-stamp schemes in such countries as Malaysia have been rejected on the basis they were too American and un-Asian.In this section
   
A new paper* by researchers at the International Food Policy Research Institute (IFPRI), a think-tank, suggests that might have been a mistake. The authors analysed the results of an experiment conducted by the World Food Programme in Ecuador in 2011, which compared handouts of food, cash and vouchers—all conditional on attending nutrition classes. The study found that direct handouts—Iran's new policy—were the least effective option. They cost three times as much as vouchers to boost calorie intake by 15%, and were four times as costly as a way of increasing dietary diversity and quality (see chart). Distribution costs were high, and wastage was also a problem. Only 63% of the food given away was actually eaten, whereas 83% of the cash was spent on food and 99% of the vouchers were exchanged as intended. Food transfers have also been the costliest option in similar projects in Yemen, Uganda and Niger, according to John Hoddinott at IFPRI.

In Ecuador there was little difference in cost between handing out cash and food vouchers, the other two options. But vouchers were better at encouraging people to buy healthier foods because of restrictions on what items could be exchanged for them. It was 25% cheaper to boost the quality of household nutrition using food vouchers than it was by handing out cash.A switch from universal subsidies to vouchers could be the most efficient way of boosting health as well as relieving poverty. This is overdue in many countries, according to Lynn Brown, a consultant for the World Bank. In Egypt subsidising starchy grains and bread has resulted in 70% of adults being overweight and 29% of under-fives being stunted. Either vouchers or cash handouts might reduce the bias against healthier foods (unsubsidised dairy products and vegetables) inherent in the system. But as Iran's populist giveaways show, the politics of cheap food can easily crowd out the economics."

One of the most disturbing features of the FSA is that it arbitrarily decides that 67% of the Indian population needs subsidized foods without any valid basis. It is also condemnable because of its over emphasis on cereals ignoring other protective foods like milk, egg and pulses. Its impact on agriculture could be disastrous with farmers taking up more and more cultivation of cereals like rice and wheat ignoring pulses and oil seeds. With the suspension of the Aadhar based delivery system where one gets the subsidy through the Banks, how the Scheme is going to be managed is any body's guess. It is most unfortunate that the modern India, even after 67 years of independence has not been able to evolve a documentation system to identify low income families who deserve government support for survival. In absence of reliable and dependable data, one suspects that most of the workers in the unorganized sector of the labor market are much above the poverty line requiring no prop from the State! In other words public money is squandered on them for the sake of considerations other than merit. How long this will go on, bleeding the Nation perpetually? The next government must take courage in its hand to drastically retool this project eliminating millions of undeserved beneficiaries from this doling bonanza!  

For further reading refer: http://www.economist.com/news/finance-and-economics/21596987-why-food-vouchers-are-policy-worth-considering-developing-countries-feeding

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