The Hindu Business Line : Has food become an <I>astra</I>?

Almost four decades ago, the then US President, Richard Nixon, said that food is a weapon and must be used as such. He was ready to write-off India as a "basket case" because of the Public Loan (PL 480) situation; India was literally living ship-to-mouth. Spurned by Nixon for food aid, the then Prime Minister Indira Gandhi was determined to ensure India's food security. This saw the then Agriculture Minister, C.Subramanium, unfold a food plan. Thanks to this, farmers, especially of Punjab and Haryana, produced food, primarily wheat, in such abundance that the region came to be known as India's granary. But, now, over three decades later, the same Punjab/Haryana wheat farmers are refusing to selltheir produce to New Delhi for a price they think is almost Rs 300 less than what they would get if they held on till June-July.

Current scenario

At best, India might harvest 72 million tonnes. At the rate New Delhi is managing to mop up grain, reaching the targeted 15 million tonnes seems an uphill task. Punjab, which used to supply nearly 75 per cent of the buffer stock, has withheld sale. The reason cited is a better price come June-July. But is there a hidden agenda?

Clearly, the Centre is close to panic at the Punjab farmers' stubbornness. The man behind its woes is Mr Ajmer Singh Lakhowal, Chairman, Punjab State Agricultural Marketing Board, and leader of Bharti Kisan Union. Mr Lakhowal thinks that the Centre's offer of Rs 850 a quintal is way below the Rs 1140 the farmers would get if they held on a few more months.

He certainly has a point when he says that in 1966-67, the wheat Minimum Support Price was Rs 76 a quintal and while government employees' salaries have climbed 6000-7000 per cent since, the MSP has risen only 1000 per cent. Given the steep increase in input costs, especially of fertilisers and pesticides, the argument seems justified. But is there more than what meets the eye?

Look at the current political polarisation: India's wheat granary has gone out of the Congress fold, without doubt UP too will slip; both Madhya Pradesh and Rajasthan are under BJP dispensation . Certainly the UPA Government cannot import wheat from Andhra Pradesh or West Bengal. Indeed, food or more particularly wheat, is a good stick to beat the UPA Government with; only it is a weapon in the hands of Punjab's farmers. Nixon's prophecy has come full circle. This time around it is not the American hand that is wielding the food weapon, but the Punjab farmers, who made the so-called Green Revolution happen.

Groping in the dark

New Delhi's distress is obvious. How will it find a balance among a fairly comfortable level of output, forced lower intake and high open market prices? That futures trade embargo is no answer to price volatility must now be clear. The power of information is turning growers into savvy traders. Clearly, the policy-makers have been caught off-guard with the market ruling supreme.

FCI mess up

The Food Corporation of India has been blamed for the mess in the foodgrains procurement process. The blunder was in sending out a communication only to a few potential suppliers, seeking offers to supply wheat for forward positions. This is a rather unfair attempt and casts a shadow over the FCI's approach. A special feature of the tender is that technically, the onus of hedging the price risk has been passed on to the supplier. Therefore, only a handful of parties familiar with futures and options trade could participate. This FCI approach inevitably angered the other suppliers.

The response to the FCI tender has been very poor with only two parties, one from New Delhi and another from Mumbai, responding. In contrast, the approach adopted by the State Trading Corporation (STC) has been more open and direct. India is now perceived as a net importer and shipping companies have jacked up freight rates to unprecedented levels, in anticipation of large Indian purchases. India has thus reached an unenviable position of becoming a wheat importer . By contrast, Pakistan has turned out to be a net exporter of wheat. This shows that Indian farmers are no more at the mercy of the government and if occasion demands, they can even wield food as a weapon against New Delhi.

What is the way out?

Precious time has been lost in commissions, conferences and endless table-talk; things are not happening on the field. Clearly, the wheat crop needs a new direction. But it seems this cannot be given by the agricultural scientists. They are offering minor variants of the Mexican dwarf and not a single breakthrough strain. New Delhi is conditioned to thinking of a single MSP for the Mexican dwarf wheat that is being cultivated for more than three decades . The soil in Punjab, Haryana and Western Uttar Pradesh needs a respite. The only way to replenish the soil is to give a holiday for wheat and opt for legumes and may be oilseeds on a large-scale. The only hope for wheat is the vast fertile stretches of Bihar. But, then, has any one thought out a policy for wheat in Bihar?

Every time the open market price soars, the millers cry wolf. Why shouldn't the millers be roped into large-scale wheat production? They certainly have a stake in uninterrupted supply of the raw material. Why does India waste enormous foreign exchange in shipping wheat out of Australia when the millers can be enthused to form a consortium through a Special Wheat Zone, perhaps, in Bihar?

Micronutrient deficiency, especially of zinc, is becoming rampant and Indian scientists seem to have no answer to this problem. Is there a robust soil-testing programme that covers the length and breadth of this huge nation?

The High Level Committee on Long term Grain Policy of the Government of India estimates the total foodgrain requirement at 260 million tonnes by 2020, which is 69 million tonnes more than the 191 million tonnes that India produced in 2004-05. This translates to more than 5 million tonnes increase per annum from now on.

Can India achieve this quantum jump considering the situation of agriculture now? India is fast turning the diabetic capital of the world; South Indian homes are fast replacing idlis and dosas with chappatis and parathas. Where will the South Indian millers go for all that flour? Punjab farmers may want to use food as a weapon against New Delhi but, ultimately, it is the aam admi who will be hurt. Is New Delhi listening?

(The author, a former National Science Foundation Professor, Royal Society, Belgium, can be contacted at nair_kpp @yahoo.com)