Resolving the food riddle

FOODGRAINS MANAGEMENT, BY the Centre, has unquestionably led to monstrous absurdities in recent years. Food procurement, at minimum support prices, has reached mountainous scales, making a mockery of buffer stock norms intended to ensure food security for the vulnerable sections. Currently the stocks with the Centre are estimated at 62 million tonnes while the official reckoning of maximum storage capacity of reasonable quality is less than 30 million tonnes. That, in the absence of a prudent and firm policy correction, the food stocks could exceed 75 million tonnes by February 2002 is enough to jolt the policymakers from the customary leisurely habit of pondering over possible lines of action.

The Union Food Minister, Mr. Shanta Kumar, addressing editors on the social sector on Thursday, broached a new policy framework gradually to unwind an increasingly unviable policy of centralised procurement of foodgrains in an obviously altered context of food surpluses or, at any rate, of widening mismatches between procurement and off-take from the Public Distribution System. The contradictions in the inherited policy matrix are well-known. Food subsidies which are supposed to benefit the poor mainly nourish the byzantine public sector Food Corporation of India in its vastly overextended procurement, storage and logistics operations. The concept of the MSP, originally intended to protect farmers against the contingency of farm price crashes, has largely helped the well-to-do among the farmers in Punjab, Haryana and Andhra Pradesh, sell wheat and rice without effort and not to look upon value-added crop diversification as a national opportunity. Above everything else, centralised procurement anchored in a politically-manoeuvrable MSP system, has distorted the constitutionally-designed sharing of functions between the Union and the States under which agriculture and food belong to the domain of the States.

What is the vision of the new brave world which Mr. Shanta Kumar has now outlined? First, the Centre will do away with what is widely perceived as its obligation to procure foodgrains at MSP, thus leaving the farmers to market the produce on their own, fetching prices which the market will offer. Does this mean automatically that the Centre will save its large subsidy bill, estimated at around Rs. 21,000 crores a year? Not necessarily. The Government's commitment to the farmers in terms of MSP will continue to operate in the sense that the Government (Centre or States?) will compensate the farmer for the shortfall of the market price received in relation to the MSP announced. Given the certainty that market prices will vary among the diverse regions in the country, a policy of actual cash disbursement to the farmers will entail enormous administrative hassles. Yet Mr. Shanta Kumar's point that the system of MSP and procurement based on it, at present, benefits largely the producers in Punjab, Haryana and Andhra Pradesh, accounting for 80 per cent of procurement of foodgrains in the country, and that the alternative proposed, would benefit every farmer in the country, is indeed specious given the fact that the MSP and marketable surplus with the farmers are necessarily correlated.

Buffer stocks for food security and PDS for consumer protection from the inequities of the market will evidently continue but under the responsibility of the States. That, over a period, the FCI will have to be downsized and that the determination of the MSP will itself be taken outside the purview of the political establishment are the necessary ingredients of the new food policy adumbrated. Imperative as the reforms are, who will bite the bullet?

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