The Hindu Business Line : All’s not well on food front

The current scenario on the food front is far from reassuring. It is time the Government charted a course to balance wise economics and sensitive governance.

K. P. Prabhakaran Nair

The country seems to be caught up in some kind of “ food emergency”. There is fire-fighting, especially on the wheat front. Forward trading in wheat was abolished some time ago.

The Abhijit Sen Committee, mandated to look into the issue, has come out with a report that forward trading in wheat, rice and tuar, abolished by the Centre, has in no way affected trade in these commodities.

It has, in fact, helped farmers discover better prices than those the mandis offer (this view has also been endorsed by the Deputy Chairman of the Planning Commission, Dr Montek Singh Ahluwalia). Wheat export has been banned and storage limits imposed.

The Railway Minister, Mr Lalu Prasad, has decreed that the Railways will not be allowed to transport wheat for private trade. This is the first time such civil restrictions have been imposed since 1961, and the situation is akin to an “emergency”. Private mill-owners who have moved their cargo to railway stations are in a fix.

Transporting a tonne of wheat by rail costs Rs 1,350, while the same by road would cost Rs 2,350, almost double. Inevitably, this additional cost will be transferred to the consumer and the wheat consumers in Tamil Nadu and Kerala will be the worst hit as flour prices will go up.

The Commerce Minister, Mr Kamal Nath, decreed that the government would not hesitate to prevent private trade in wheat to facilitate FCI meet its target.

But, a strange statement came from the Agriculture Minister, Mr Sharad Pawar, that the country is facing an acute crisis in wheat availability because more and more South Indians are eating wheat (chappatis and parathas) instead of rice.

Decline in wheat offtake

A careful examination of the wheat offtake data from the PDS and Targeted Public Distribution System shows that during the last decade, starting 1988-89, wheat offtake has simply declined in all the southern States and, in some States such as Tamil Nadu, there was no offtake at all in 2001-02. The staple cereal of those in the South continues to be rice.

If the statement’s intent was to paint a dangerous scenario on the wheat front and pave the way for imports at exorbitant prices (earlier in April, India took an option to buy 180,000 tonnes of wheat from Cargill at $406 a tonne), the statement is definitely misleading for the public.

Also, it is strange that out of the 75 million tonnes projected to be harvested, the Centre cannot mop up even 15 million tonnes (just one-fifth), which is the buffer norm. Possibly, the more realistic assessment would be that the country is, indeed, producing less wheat than what is internally required.

Past mistakes

To understand the present predicament on the wheat front, in particular, and the food front, in general, one must go back to the last 10-15 years of the “reform period”. The NDA regime, in the name of “agricultural diversification”, charted a course that deflected the country’s agricultural priorities from foodgrains production to other sectors — horticulture and floriculture, in particular.

But the worst came from Mr Chidambaram, when he said in the Budget speech that “India is self-sufficient in paddy and wheat, but deficient in other agricultural produce. The time has come to encourage our farmers to diversify into areas such as horticulture and floriculture etc”. And he launched the Rs 10,000-crore National Horticulture Mission.

It is well-known that India is the No. 2 producer globally of fruits and vegetables, next to China, and there is no scarcity whatsoever. Yet, the emphasis was on horticulture and floriculture.

Wheat challenge

With careful planning, the desparate situation can be turned into one of opportunity.

Wheat area can be expanded into the unexplored vast tracts of Bihar and eastern Uttar Pradesh (the fertile Tarai belt). When investment banks and hedge funds are mopping up vast tracts of agricultural land around the world, hoping to ride the so-called “commodities super-cycle” that has lifted the prices of agricultural commodities of everyday use, such as wheat, rice, soybean and corn, to all-time highs, it is time India took a cue.

Wheat and rice can be grown on the same soil. With diabetic scare hanging like a Damocles’s sword, wheat could become a preferred staple in the years to come.

Like China, India must put in place a national grain policy. On no account should the country allow its arable land acreage to slip below 69 per cent of the total cultivable.

The minimum support price (MSP) concept should be abolished and a market-driven mechanism put in place where wheat farmers get the best price, helping New Delhi mop up enough grain for public distribution.

The import charade exemplifies the anomaly in the entire situation. As announced by the Agriculture Minister, Indian wheat at $250 a tonne is the most competitive. Why not give farmers a further Rs 500 hike instead of fattening the wallet of the alien supplier? This will give the private trade a run for its money.

A wheat consortium, where private millers and government join hands, can be put in place. This consortium can even explore overseas production. Africa, where vast stretches of fertile land wait to be exploited, can be tapped. An attempt has been made in countries such as Tanzania and Uganda, in crops such rubber and coffee. Efforts are on to extend this practice into the green fuel sector — Jatropha.

A new and dynamic policy of soil management must be evolved. India’s most vital resources are its varied soilsIt is time to take a fresh look at crop diversification. India has a surplus of sugarcane, with 2007-08 production estimated at 26 million tonnes and consumption not exceeding 20 tonnes, which leaves a clear surplus of 6 million tonnes. Yet, the government is doing everything to promote export subsidies. Why is wheat getting such step motherly treatment? After all, sugarcane is not our staple diet; wheat is.

Negative signals

The food scenario is far from reassuring. Instead of biting the bullet, the government’s knee-jerk reaction is sending a negative signal to the market.

This is similar to the situation that prevailed in1973-74 when the oil crisis unfolded. It is time the Government charted a course that balances wise economics and sensitive governance.

(The author is an international agricultural scientist.)