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A costly sop

BY NOW ACCUSTOMED to the double-speak of the Centre (especially on matters of financial discipline, reduction of subsidies and the like), its latest move to placate the agitating paddy farmers of Punjab by reversing the decision not to procure sub-standa rd rice should come as no surprise to anyone. The sell-out decision would mean the Government will shell out Rs 350 crore more than what it actually should for the quality of rice it will be forced to procure. The Finance Minister, Mr Yashwant Sinha, has claimed that no politics was involved in the decision to support Punjab's farmers; but there are, rightly, no takers for this brave assertion. The general perception is that the Centre has once again succumbed to political pressure and set an extremely unhealthy precedent with serious ramifications for the country's agriculture.

The policy-makers have not only compromised on the overall quality of paddy to be procured by relaxing the well-established specifications, but have also been forced to maintain the already high procurement price. This is bound to send wrong signals acro ss the country about the perceived vulnerability and the regional bias of the Centre. Surely, it is the consumer who is going to pay for the shenanigan of the Government. It is cruel irony that the same Centre showed no hesitation in postponing a decisio n on reducing the grain issue price for the public distribution system a fortnight ago on the specious plea that the Prime Minister was away for health reasons! It is a matter of pride for the country that Punjab has always been in the forefront of agric ulture and continues to contribute to the food security in no small measure. Farmers in every part of the country deserve support. However, the current market realities hardly justify the latest decision on paddy procurement. Already the Centre is saddle d with an excessive inventory of rice, about 13 million tonnes or 30 per cent more than the minimum norm for this time of the year. All efforts to liquidate the stocks through either domestic sales or exports have come to a nought because the public stoc ks are too expensive, primarily because of unrealistic procurement prices paid and the exorbitant carrying costs of the Food Corporation of India. Further, the Government is now ready to start procurement from the kharif 2000-01 harvest. The projected pr ocurement figure is 17 million tonnes. What will the Government do with the mountains of rice and wheat accumulated more out of political compulsion rather than for economic necessity is a question that continues to haunt. The Expenditure Reforms Commiss ion's recommendations on freezing of the minimum support price for paddy/rice, encouragement of rice procurement through the levy route, procurement at a single rate applicable to common variety and levy price to be related with strict quality standards all will now be observed more in the breach.

A related but equally vital issue is the existing low level of paddy productivity despite the country having the world's largest area of 43 million hectares under the cereal crop. At about 2.8 tonnes a hectare, India's paddy yield is considerably below t he international average of 3.9 t/ha and China's average of 6 t/ha. Resources -- both financial and technical -- must be diverted to raise yields, particularly in the eastern States of Assam, Bihar, Madhya Pradesh and Orissa. But there are no signs of th at happening, while the Centre is obliged to enrich the already rich farmers elsewhere. Mr. Yashwant Sinha's statement that the relief package is nominal compared to the subsidies given to farmers in the developed world opens up interesting possibilities . Is the Government, then, open to subsidising Indian agriculture in a big way so that its inherent strengths are leveraged?