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THE MESS THAT foodgrains management has become needs to be sorted out quickly. In just about one year, the grain inventory is down by exactly half — from 55.4 million tonnes in September 2002 to 27.8 million tonnes last month. It is, of course, a commendable pace of liquidation considering the unconscionable levels of stocks the country was carrying at an enormous cost to the exchequer in recent years. The transformation has been possible following a sharp increase in offtake from Food Corporation of India for domestic sale and exports. With stocks depleted, the policy-makers are under pressure to ensure adequate supplies, especially of wheat, over the next six months, that is, till harvest in April 2004. Wheat exporters, who had paid money and obtained release orders, have been left in the lurch with disastrous consequences — arbitration for shipment default and loss of image in the global grain market. Some plan to drag the FCI to court.

The Food Ministry, under whose administrative control FCI functions, must own up responsibility. The present state of affairs reflects poorly on the Ministry's competence to supervise and intervene effectively. Whatever happened to the Prime Minister's statement at the Indian Science Congress in January 2001 that steps would soon be initiated to restructure the FCI to reduce costs and introduce greater efficiencies in the procurement, storage and distribution of foodgrains? The Food Ministry has denied any move to curb grain exports, but the market tells a different story. The Government is clearly under pressure to defend the poor performance and the tardy ways of managing the grain economy. In the same vein, the Government cannot escape blame for its indiscriminate subsidising of grain exports and encouraging shipments overseas when millions are starving at home. An unusual opportunity offered by the drought in 2002-03 to take up massive food-for-work programmes was frittered away. Open market prices are on the rise and the poor are left to fend for themselves.

Now that public stocks of grain have been reduced — rightly or wrongly — to a reasonable level, it is time policy-makers came up with a more rational grain management policy. Procurement and pricing of sales are the two most important components of grain management. It is time to examine the desirability of continuing with open-ended procurement and of permitting private trade to source grain directly from growers. Needed are transparent policies and procedures that will level the field for different segments — flour mills, exporters, traders and others — and enable them to plan their business. With kharif harvest in full swing, time for rabi planting is fast approaching. A decision on the minimum support price for wheat and other crops brooks no delay. The MSP should be such as to further reduce the distorted relative prices between wheat and competing crops such as oilseeds, and help minimise the incentive for the continued rice-wheat-rice cycle that is known to injure the soil in States such as Punjab and Haryana.

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Messy grain management

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