Food procurement has been our saviour

S Adikesavan | Updated on May 15, 2020 Published on May 15, 2020

Economists railing against India’s food subsidies have been proved wrong. Without these stocks, we would have been in trouble

The International Food Policy Research Institute (IFPRI) based in Washington DC is one of the leading think-tanks in the agriculture sector, and a part of what is seen to be the “received wisdom” of the West. Though not directly linked to the World Bank or the IMF, these are primarily Western-model policy advocacy centres funded by governments and corporates with vested interests like sale of seeds, pesticides and other inputs. In its annual report of 2019, India is also listed as one of the donors.

And what did this high thinking in the agriculture sector suggest for India? In 2004 itself, one of IFPRI’s senior researchers said categorically: “It is high time India wound up the FCI, privatised rice trade and encouraged imports, if necessary. Why produce water-intensive crops when there is no water to drink? Plant only economically viable crops and import rice from countries where it is cultivated more efficiently and economically.”

Suresh Chandra Babu, the India-born, US-educated Senior Research Fellow also berated the bureaucracy, saying the country has “an Indian Administrative Service (IAS) which cannot go beyond the beaten path and does only arithmetic jugglery in the name of planning.”

Pragmatic vision

This is just a sample of the neo-liberal Western strategy which, if followed, could have landed us in great disaster at a time like this. Thankfully, political leaders like PV Narasimha Rao and AB Vajpayee were men of wisdom and pragmatism, and the country’s first Reform Finance Minister, Manmohan Singh, was somebody who for the first 12 years of his life was in a village which had no electricity, no schools, no hospitals, no piped drinking water, who walked for miles every day to school and studied at night in the dim light of a kerosene lamp (leading to his early failing vision).

It is this practical experience of life in India which gives insights no Ivy League can induce. One of the greatest lessons for India from the FCI story is to stick to your own approach — whether you call it Swadeshi, “Deendayalonomics”, Leftist, whatever. And stay that course, keeping national interest in mind. No mortgaging of ideas to ideology.

The FCI and the IAS man at its helm, DV Prasad, a Karnataka-cadre bureaucrat of 1984 vintage, have now come to the aid of the country at a time of the “blackest of black swan events”, as a banker-friend put it. If people across the country — literally in every nook and cranny — have been able to get foodgrains, and some of them totally free, its because of the Grain Man’s team and the much-maligned food subsidy policy of successive governments.

Changing tune

Remember here that all the West-liberal economists have been against food subsidy and public procurement because they do not have a sense of history at all. Repeated episodes of famine have been the hallmark of India and probably, the post-Independent Indian democracy’s untouted achievement has been food security for the entire country,which we never had in the past (India was never administratively integrated before 1947).

Even in the latest Economic Survey, there was mention of the growing food subsidy bill and the need to curtail it. But now that the likes of The Economist have started running cover stories on food availability across the world, the West has also begun to sit straight and take note. They find India and China way ahead of even the US in this matter with less of import dependency than the G7 countries. The UK, for instance, has a high import dependency for food.

If farmers in India have not been hit in any two crops, they are rice and wheat, where procurement by the FCI is assured at the minimum support prices. For all other crops, the MSP system does not work so efficiently, and it is this mountain of rice and wheat which has come to the aid of our country in the wake of the Covid pandemic. Shortage of rice or wheat — even a news report of shortage — would have not only led to starvation but skyrocketing of prices. That this did not happen is a validation of food subsidy and food security programmes.

Action during crisis

Things, however, have also been helped by a decline in agri commodity prices globally. According to the UN-led Food and Agriculture Organisation (FAO) world food commodity prices declined further during April, as the Covid-19 pandemic resulted in significant contractions in supplies and demand.

The FAO food price index, which tracks international prices of the most commonly-traded food commodities, averaged 165.5 points in April. (see Chart).The FAO sugar price index hit a 13-year low, declining 14.6 per cent from March, which might spell bad news for the sugarcane growers in UP, Maharashtra and Tamil Nadu.


The record transportation of foodgrains by the FCI to mitigate Covid lockdown hardship has thus helped in disposing of stocks even as international prices were falling, reducing its cost of inventory-holding and freeing up space for the rabi procurement. The FCI moved 60-lakh tonne food grains during April 2020, more than double the monthly average of 30 LMT.

And the real builders of this bulwark against hunger and famine for the deprived and the destitute have been the Indian farmers. Year after year, battling vicissitudes and adapting to volatile prices, they have been the food heroes of the country.

The FAO has publicly appealed for support for farmers. The Modi government was very responsive in advancing the PM-Kisan Samman release for 2020-21. Some more support is definitely required for the nearly 10 crore farmers who see to it that we do not struggle for food anymore despite being a low-income country. It is hoped that the Finance Minister’s Fiscal Package-2 will bring cheer for them.

And most importantly, all the cacophony over food subsidy being a wastage and the FCI being an entity waiting to be wound up, will not be aired at least for the next few years by the neo-liberal US-trained economists, who cannot probably differentiate between a paddy and a wheat field!

The writer is a top public sector bank executive. Views are personal

Published on May 15, 2020

A letter from the Editor

Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
  1. Comments will be moderated by The Hindu Business Line editorial team.
  2. Comments that are abusive, personal, incendiary or irrelevant cannot be published.
  3. Please write complete sentences. Do not type comments in all capital letters, or in all lower case letters, or using abbreviated text. (example: u cannot substitute for you, d is not 'the', n is not 'and').
  4. We may remove hyperlinks within comments.
  5. Please use a genuine email ID and provide your name, to avoid rejection.
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.