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Thursday, May 30, 2002

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Food subsidies

This refers to `Towards sustainable food security' (Business Line, May 21). The article addresses the issue of Indian food security with particular reference to food subsidy. Food subsidy is two-pronged as per the analysis made by the authors. The problem involved in the issue is discussed in depth. But can the proposed reform bring the forecasted result?

For a country like ours, which is thickly populated, the PDS (public distribution system) reform is a sensitive issue.

The authors assert that procurement of food grains would be done on a quarterly basis and the quantum of procurement would be fixed for the current quarter, depending on the quantum to be lifted during the next quarter. The procurement price would be fixed by a tendering process and in turn, MSP would be abolished.

This reform measure is said to depoliticise the issue.

Predominance of illiteracy among the farming community still continues. MSP is a supplementing means for the toiling masses, because of the mismatch of input cost and output remuneration in agricultural activity. MSP is not a remedial measure; it is only a supportive mode. By abolishing MSP, their overall well-being would be jeopardised.

How are we going to allocate to farmers the reasonable benefit share in the production process if international market forces control the trend? Hedging is risky, even in forex transactions and is in the primitive stage. Advocating the farmer to hedge his crop and fix his price in advance at no cost to the exchequer is not practical. Purchasing power has to be strengthened by equitable distribution of benefits airing out of the contribution factors through Government intermediation. Stockpiling of purchasing power is an agenda designed in advance without augmenting the infrastructures to build up the purchasing power. A thorough debate is required on the issue of food subsidy. Public opinion must be mobilised.

V. Kumaresan

Madurai

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