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Desperate move

TRUST THE GOVERNMENT to do the most rational thing, but only after exploring all other possibilities, and naturally, failing. Thoughtlessly accumulated wheat and rice stocks far in excess of normal requirement have become a millstone around the Governmen t's neck.

The Centre is saddled with nearly 65 million tonnes of wheat and rice while, according to the Government's own buffer-stocking policy, public agencies need carry no more than 24.3 million tonnes, the minimum stock norm for July 1 of the year. The unconsc ionably high level of stocks (comprising broadly 42 million tonnes of wheat and 23 million tonnes of rice) represent 30 per cent of the country's annual total foodgrains output or over 40 per cent of rice and wheat output together. The current value of t he inventory is about Rs 50,000 crore, making the Government the biggest hoarder of foodgrains even in this post-liberalisation free-trade era. The public stocks are subjected to all kinds of abuse that invariably tells on quality and cost. The food subs idy burden has been galloping and registered an unprecedented Rs 12,500 crore in 2000-01, even as it is threatening to go berserk in the current year with the Government seemingly exercising little control. Such fiscal profligacy and wanton compromise on the much-needed economic discipline is truly bizarre. Also particularly painful because, by the Government's own admission, nearly a quarter of the 100-crore people in this country still live below the poverty-line, a spectre that militates against huma n dignity and canons of democracy. No wonder, our food managers have been straining every nerve to wriggle out of the spot they find themselves in, following a series of omissions and commissions.

As New Delhi's desperate attempts to liquidate stocks through domestic sales and exports have met with extremely limited success, it has finally come around, after considerable loss of time, to effecting a sharp, 26.5 per cent, cut in the price of wheat and rice supplied under the public distribution system (PDS) for above-poverty-line (APL) families. Unfortunately, for the below-poverty-line population -- which perhaps needs more governmental support than it enjoys at present for accessing subsidised g rains -- there has been no relief but a 5-kg increase in ration to 25 kg per family per month. While the move will add some Rs 2,700 crore to the food subsidy bill, it is sure to reverse the falling offtake of the APL segment. But the policy-makers need not delude themselves into believing that the entire APL population will rush back to ration-shops. A price-cut is unlikely to make any significant contribution to liquidating wheat stocks because open-market prices are rather low and traders would conti nue to lure consumers with lower prices. Notwithstanding this, the move is welcome, as wheat prices, which have a tendency to start firming up from August onwards, will remain under check.

Exports, open-market sales, reduction in PDS prices and related moves on foodgrains are all nothing but fire-fighting exercises undertaken, ironically, by the Government itself, after allowing the fire to spread. Despite two years of so-called grain moun tains in the country, no worthwhile food-for-work programme is in place. The much talked about long-term policy for foodgrains production, distribution and trade is nowhere in sight. The bias towards certain crops and regions must give way to a more inte grated national approach. We surely need to be a little less obsessed with rice and wheat for some time, and concentrate on promoting coarse grains, pulses and oilseeds, all of which are in short supply. The country cannot afford any more the wanton sacr ifice of economic prudence at the altar of political expediency.