May 12, 2002	Sunday	Safar 28, 1423

NEW DELHI: In India’s continuing paradox of overflowing granaries and starving populations, the only smiling faces these days are of those of traders. At the moment private traders are slavering over government’s grain procurement policies, which have the laudable motive of supporting farmers but which will result in government grain stocks swelling to a record 75 million tonnes — with nowhere to store it.

“The only buyers of wheat in post-harvest wholesale markets of (northern) Punjab and Haryana states at the moment are the Food Corporation of India (FCI) and other state agencies,” said Banwari Lal, a grain exporter based in Delhi. “We will buy only when the government offloads the stocks at subsidised rates,” said Lal.

For traders like Lal, it is a simple waiting game and the longer they are patient, the better because there seems no end to the glut of grain. But neither the farmers, many of whom are already in debt, nor the government can wait to get rid of perishable stocks.

Already, open-market prices for rice and wheat, the main staples, are way below the minimum support prices announced by the government in a pattern depressingly similar to that in the previous years, when traders rather than starving people benefit from a massive three billion dollar subsidy.

“This is a crazy situation — the government is actually subsidising the grain trade instead of ensuring that food supplies reach vulnerable people,” says Jean Dreze, visiting professor of economist at the prestigious Delhi School of Economics.

Last year, several hundred starvation deaths were reported from Orissa despite the fact that granaries were creaking with rotten stocks. That prompted rights activists to petition the Supreme Court to get grain released to people who desperately needed it, but could not afford it.

Newspapers and television channels reported grain rotting after being allowed to lie exposed on airport runways and even highways covered with flimsy plastic sheets. Large portions ended up getting devoured by rats and other vermin. Officials in disaster-prone Orissa, which has special relief mechanisms, quickly identified the problem as on of “rapacious traders and moneylenders cornering subsidised grain leaving the intended beneficiaries to grub on roots and poisonous seeds”. This is the third year that the phenomenon of continuing bumper harvests and overflowing granaries amidst food shortages has been both a topic of academic discussion and newspaper reportage, but the problems seems only to be worsening.

India’s Planning Commission has admitted that more than 30 per cent of grain, meant for the public distribution system (PDS), is misappropriated yearly by private traders and contractors.

So entrenched is the nexus of traders and the FCI bureaucracy that it thwarted a National Storage Policy announced three years ago, which invited foreign investors with modern technology to help move grain from farm gates to consumers efficiently.

Economists from the left-wing political parties, such as Biplab Dasgupta, have argued that it was pointless trying to get the right-wing, trader-friendly Bharatiya Janata Party-led government to crack down on the nexus in favour of the starving poor.

Last year, some of the grain was exported as cattlefeed at prices lower than That fixed under the heavily subsidised, but corruption-ridden, public distribution system (PDS). Iraq and Indonesia, groaning under problems of their own, rejected Indian grain as being of poor quality. Over the last decade, grain distributed through the PDS had dropped from 20 million tonnes to less than 10 million tonnes, a fact that economists have attributed to increasing poverty levels and the decreasing capacity of ordinary people to buy food.

India’s Agriculture Minister Ajit Singh, admitted publicly that the countries granaries were brimming only because “our people do not have the wherewithal to purchase foodgrain” According to the government’s National Family Health Survey about half of all Indian children are chronically undernourished and half of all adult women suffer from anaemia.—Dawn/InterPress Service.