Food for Rats: India’s Food Crisis and the Government Response

Damodar

India has 1/3rd of the world’s hungry while another 836 million are condemned to survive on less than Rs. 20 (less than half-a-dollar) a day. Yet approximately 2.7 million tonnes of grains are being wasted – or worse, rotting in the warehouses of the Food Corporation of India. This grain is adequate to feed approximately 40 million people… what is more appalling is that the government spends approximately 2.6 crore of rupees to get rid of the rotten grains annually when according to the Global Hunger Index report 2009, close to 300 million Indians go without food every day.

According to UNICEF, ‘In India, around 46 per cent of all children below the age of three are too small for their age, 47 per cent are underweight and at least 16 per cent are wasted. Many of these children are severely malnourished.’¹ In the past five years 1,22,422 children died from malnutrition.

In July the Minister of Food and Agriculture Mr. Sharad Pawar admitted that more than 11,700 tonnes of rice and wheat worth 6.86 crore (USD 1,462,527) were damaged in the warehouses of Food Corporation of India. Mr. Pawar also claimed that the amount of damage reported in the media was an exaggeration. But Pawar’s remarks was contradicted when in answer to a RTI question, filed by Dev Ashish Bhattacharya, the petitioner found that 10,688 lakh tonnes of food grains were damaged in various FCI depots across the county. Between 1997 and 2007, 1.83 lakh tonnes of wheat, 6.33 lakh tonnes of rice, 2.20 lakh tonnes of paddy and 111 lakh tonnes of maize were damaged in different FCI godowns.

The Supreme Court of India on August 12, asked the government to distribute the food free to the needy rather than letting it rot in warehouses. Sharad Pawar who claims to be the champion of farmers and nationalist congressman interpreted this order as ‘suggestion’ and claimed that there is no way that the government can think of distributing the grains to the poor. The Supreme Court had to further clarify its judgment on 31st August, by reminding Mr. Pawar and through him the government of India that its ruling on food grain was an order and not a suggestion as interpreted by the minister!

According to the media reports, ‘In Allahabad, more than one lakh wheat sacks are left in the open despite enough space in the godown. The godown is spread in nine acres of land. Similar situation is prevailing in Patna and Katihar godowns. Food grains are left in open without any care. In Haryana itself three lakh sacks of wheat got wasted in a warehouse due to floods. The Met department had issued flood warning to Punjab and Haryana before the arrival of monsoon. However, the precautions were not taken and the food grains continued to lie in open and low-lying area. Flood water entered the warehouse and damaged the food grains. Similarly, 4.5 lakh sacks of wheat estimated to be worth over Rs. 25 crore were damaged due to rains at the FCI godown at Hapur in Ghaziabad. But when the media-persons contacted the FCI officials, they quickly denied the impact of rain. The stock was meant to be picked up by the Uttar Pradesh government but it failed to do so in time.”²

Even when Pawar was being cornered by the opposition parties in the Indian Parliament, the Indian Prime Minister, who is an economist of world repute, openly rejected the verdict stating that Supreme Court should not interfere in the ’realm of policy formulation’, wondering how can free food grain be distributed to a whopping 37% of Indians who live below the poverty line. At the same time making food available free will destroy incentives to farmers to produce more. As if the farmers of this country are in the best economical situation. Can someone remind the PM about the unabated farmers' suicides in several parts of the country? At least for the first time the UPA government has honestly declared its stand and the class interest it is protecting.

The reason cited by the government for not distributing the food via Public Distribution system is that it would increase the already unbearable food subsidy being provided by the government thus further increasing the budgetary deficit. ‘No more social subsidy’ and ‘there is no money’ (for such wasteful activity like universalising food for all) these have become the mantra of vibrant and emerging India – the blue eyed protégée of neo-liberalism. Though it is altogether a different matter that the country had Rs. 10,000 crore to build a new state-of-the-art airport or there was no impact on deficit when the finance minister and others wrote-off a whopping sum of Rs. 500,000 crores under three heads for the super-rich and the corporate sector in the current financial plan, all in name of helping India to industrialise. The country today boasts of 49 dollar billionaires in the world and the mainstream media routinely portrays them as the new icons of resurgent India. The government has no issue in providing them with all sorts of subsidies in the form of establishing Special Economic Zones and even a tax relief in investing in Indian Premier League (IPL) cricket clubs. The government is more concerned with IPL than BPL (Below Poverty Line).

How much fund would have been needed for universalising the PDS? Economist Pravin Jha and Nilachal Acharya estimate that if rice/wheat were made available to all Indians at Rs. 3 a kilo, it would add Rs. 84,399 crores to the food subsidy in coming budgets. That’s about one-sixth of the tax write-offs for the wealthy in this year’s budget. (Other estimates place the added expenditure each year at no more than Rs. 45,000 crores).³ The cost estimation done by the Right to Food campaign says the total increase would be around Rs. 50,000 crore if 200 million families are given 35 kg a month at the rate of Rs. 3 a kilo.⁴ But the government is in no mood to accept any further food subsidy, though it has directly or indirectly written off sum in tune of Rs. 500,000 crores for the big capitalists. The union budget 2009-2010 in appendix titled ‘Revenue foregone under the Central Tax System: Financial Years 2007-08 and 2008-09’ mentions; ‘While the revenue foregone figure for 2007-08 was estimated last year to be Rs. 58,665 crore, it has now been estimated at Rs. 62,199 crore, which is 6.02 per cent higher.

Over the years the government in consonance with the dictates of neo-liberalism has been reducing the scope of Public Distribution System (PDS), in favour of more efficient ‘private players’, without telling the ignorant masses why the food prices in the big capitalist owned enterprises are costlier than the traditional kirana (grocery) store. The food subsidy it is claimed constitutes the largest chunk of government subsidies. But even a cursory look at the subsidy provided under this heading reveals the giant statistical jugglery almost amounting to committing fraud with the masses.

Since the initiation of the LPG (Liberalisation, Globalisation and Privatisation) programme at the start of the 1990s the government in the name of fiscal prudence has been targeting to end all sort of food subsidy, the first step towards achieving this agenda was to abolish the universal nature of PDS. In 1997 the government abolished the universal character of PDS and introduced the ‘targeted’ scheme, the Indian population was classified into Above Poverty Line (APL) and Below Poverty Line (BPL) categories. With only the households classified as BPL eligible for subsidised food from ration shops while the APL category of households had to pay the full ‘cost’ of purchasing commodities. The government arbitrarily removed from the PDS tens of crores of the poor who it thought were not poor enough to get subsidised food.

The measurement of the BPL category is in itself ridiculous. According to the National Planning Commission that is responsible for the categorisation of population in the BPL and APL category defines anyone whose monthly income is about Rs. 356 per month in rural areas and Rs. 539 in urban areas as above the category of BPL. The categorisation is based upon the purchasing power ability of a person so that s/he meets the minimum recommended daily diet of 2,400 kilocalories (kcal) in rural areas, and 2,100 kcal in urban areas. This means that anyone who earns about Rs. 10 per day in rural areas and about 20 rupees in the city is not poor in eyes of the government, though this methodology does not consider the fact that to obtain the required nutrition one not only has to buy food grain but also one should have the wherewithal to cook it also.

So armed with this logic the government started to kill the universal PDS concept with targeted PDS, in which only one who qualifies as BPL would receive the subsidised food grain. The subsidy for food no longer goes to the ration shop owners (who mostly are close to local politicians). As reported in the Abhijit Sen Report [High Level Committee on Long Term Grain Policy] ‘the narrow targeting of the PDS based on absolute income-poverty is likely to have excluded a large part of the nutritionally vulnerable population from the PDS’.

So it is not a surprise that, the allotment of food grains (rice and wheat) made by the Government of India to the State Governments for the rationing system as well as through open market sales is lower at 496.41 lakh MTs in the current financial year (till July 19th, 2010) than in the last financial year, when it was 620.09 lakh MTs.⁵

All for Commodity Speculation and Profit

Why is the government so adamant to not distribute the extra food grain even at the cost of defying the verdict of the Supreme Court? The answer lies in the ideology pursued by the Indian ruling parties – be it the UPA or the BJP led NDA; both these political formation have been following the neo-liberal ideology that advocates ‘keeping governments small’ and giving the maximum opportunity to private players. Hence in the area of food distribution the country has been witnessing a clear government stance of minimising the role of PDS and ultimately dismantling the entire system.

Here it would be pertinent to mention that the government of India had set up the Food Corporation of India (FCI) in 1964 when India faced a major food crisis with the aim of safeguarding the interests of the farmers, distributing food grains throughout the country for the public distribution system, and maintain a satisfactory level of food grain stocks. The step was taken to stop loot through the market by commodity speculators which were common during the period. The FCI with all its demerits and inherent corruption has been instrumental in maintaining price control and distributing grains to the poor. But the FCI is also the major hindrance for private players and national and international commodity speculators.

The representatives of multi-nationals are against the FCI and its procurement policy. As noted in a report prepared by RUPE, ‘The representatives of multinational grain companies – those from whom the Government wants to attract “private investment in agricultural marketing channels” – told the official Committee on Long-Term Grain Policy (CLTGP) that they would not make large investments in grain trading in India unless “the potential threat posed by high stock levels is removed.”The “high stock levels” referred to here are the procurement and stocks for Public Distribution carried out by the Government; these stocks pose a “threat” to the super-profits the multinationals wish to make in India. The FCI’s purchases and sales prevent the peasant’s price from sinking too low or the consumer’s price from rising too high. The multinationals can only make monopoly super-profits if the FCI gets out of the market.’⁶

The first effort in this direction was to stop construction of new storage facility and let the private players come in the sector. On 31st March 2004, just before UPA 1 took over, the total Government owned storage capacity was 367 lakh MTs, while capacity hired from the private sector was 170 lakh MTs. At the end of UPA 1, on 31st March 2009, the Government owned storage capacity had reduced to 321 lakh MTs, while private hired godowns had increased to 248 lakh MTs.⁷ What is more surprising is that even this facility is not being utilised fully. Excepting for the FCI godown in south zone which has been utilised at 100% capacity, the godowns at east zone is underutilised by 25%, the same is the case with the warehouses of the western, northern and north-eastern zones that have been 15%, 10%, and 21% unutilised.

The warehousing system is being privatised on the one hand and on the other commodity speculation in food grains is being encouraged. The government time and again by curbing food procurement by the PDS is assuring the multinationals and private companies that there would be no change in policy that would help in controlling spiralling prices of essential commodities. These entities are virtually being allowed a free hand to speculate in food grains at the expense of consumers. Thus it is not a surprise to find that the per capita food availability declined from 171.3 kg in 2007-08 to 161.9 in 2009-10.

It is matter of time when the government would dismantle the remaining storage facility so that the multinational companies dealing in food production, storage and distribution take on this sector and the government would take their ‘help’ in managing the food stocks. So the government is all set to leave the vital food sector to the machinations of multinational companies so that they can extract maximum profits from the impoverished farmers and consumers. The Indian ruling class is firm to reduce the country to another banana republic, revealing their comprador character.

To get rid of the unutilised grain stocks the government has decided to offload the stocks to big flour millers through open market sale scheme. The market sales are made at a lower price the issue price of wheat provided to fair price shops is Rs. 830 a quintal while the price for the open market sales scheme is Rs. 650 a quintal in northern India and around Rs. 700 in the rest of India, thus directly benefitting the traders, hoarders and big mill owners.

The FCI has suggested the export of grains at lower price to neighbouring countries such as Bangladesh and Nepal to avoid further waste where they can be used as animal feed.

Conclusion

The historian Mike Davis wrote that before the British arrived in India, there was a famine once every 120 years – after the British arrived, the figure was once every four years due to the British imposed ‘free markets’ in food, which meant that they were able to pay more for Indian grain, and thus causing grain to be exported to Britain while, at the very same time and as a consequence of the very same policies, Indians starved.⁸ According to Utsa Patnaik, ‘... although wartime burdens placed upon India by the British were a primary cause – the Bengal famine was largely the result of the preceding three decades of declining nutrition in Bengal which had seen a much larger than average drop in per capita food grains availability, by nearly 40% between 1911 and 1947.’ The same situation is being replicated by the protagonists of neo-liberalism in India today.

The poor of the country are being deliberately forced to starve by the government and capitalist class. The country on one hand is being portrayed as an emerging world power yet the government is more inclined to feed rodents and cattle than human beings. The poor people have no place in their World Bank-IMF driven neo-liberal agenda.

This situation was brilliantly analysed by Marx in Capital: ‘For the capitalists, no crime is heinous enough at the altar of profit: "100 per cent will make it ready to trample on all human laws; 300 per cent, and there is not a crime at which it will scruple...”’

At a time when the price of food is becoming out of reach of the common masses and millions are struggling to meet their basic requirements of food, such wastage and the government’s deliberate attempt to deprive the people of their right to food and right to be free from hunger is nothing less than a deliberate attempt of the ruling class to create a situation of artificial famine similar to that which the imperial powers did in the heyday of imperialist exploitation. This is nothing but a crime against humanity. The ruling class will have to answer for their crime sooner than later.

Tables:

Food grain wasted during 1997-2007 in FCI godowns (in Lakh tonnes)

Endnotes:

1. UNICEF country Report, at http://www.unicef.org/india/children_2356.htm; accessed on 24th September 2010.

2. Rotting food, careless FCI and furious minister; at http://www.merinews.com/article/rotting-food-careless-fci-and-furious-minister/15827234.shtml; accessed on 27 September 2010.

3. Food security – of APL, BPL and IPL, The Hindu, Wednesday 7 July 2010, by P. Sainath.

4. Government's food subsidy bill likely to double, Business Standard, New Delhi April 23, 2010.

5. “Report on the Excess Food Grains in the Godowns of the Food Corporation of India and the State Civil Supplies Corporations” submitted by Supreme Court Commissioners to Supreme Court on 10th August 2010; as quoted in Sanhiti at www.sanhati.com/articles/2741/; accessed on 27 September 2010.

6. Quoted from Aspect of Indian Economy No. 42, December 2006.

7. Annual Reports of Department of Food and Public Distribution, Government of India.

8. Quoted from “'India has the highest number of hungry people on earth" at www.rediff.com/money/2008/ may/26inter1.htm; accessed on 27 September 2010.

9. Compiled from FCI procurement report at http://fciweb.nic.in/procurement_foodgrains/Wheat%20procurement-10%20Years.pdf; accessed on 27 September 2010.

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