RTF Campaign slams wheat export

RTFC has urged that this additional food grain should instead be provided to the poor in India.

Dr.Manmohan Singh

Honorable Prime Minister,

Government of India, N Delhi

Dear Sir,

The right to food campaign is shocked at the Cabinet Committee on Economic Affairs (CCEA) decision on 3rd July, 2012, of approving the export of two million tonnes of wheat from the Government stock, according to reports in the media. We are appalled that the Government of India is choosing to subsidise exports of wheat in order to liquidate stocks rather than distribute it to the starving multitudes in India. Subsidised exports essentially mean that the Indian Government is taking an concious policy decision to provide subsidy to cattle in the industrialised countries (which will be the use that foodgrain from India will be put to) rather than the provide it to the poorest of the poor citizens in the country.

The past experience with such food grain subsidies (especially through the private agencies) has been that exporters are likely to resort to false invoicing to create a paper trail of the exports when in reality all of this grain is likely not to leave Indian shores at all and get diverted instead, either in the black market domestically or sold back to the Government agencies at Minimum Support Prices (MSP). This is a scam foretold, that the CCEA has given advance approval to.

This subsidy is in addition to the 7 million MTs of food grains that your Government has exported betweeen September 2011 and  March 2012.

This unjust decision of exporting grain at cheap prices to the global markets, instead of ensuring that food reaches all and nodescription goes hungry in the country, was taken by a committee headed by the Chairman of your Ecomonic Advisory Council, Mr.C Rangarajan. We were certain that this decision would be rejected by the Cabinet. But have been taken aback by today\\\’s decision particularly when it is well known that India has the largest number of hungry people in the world with a rank of 67 out of the 81 countries ranked in the International Food Policy Research Institute’s 2011 Global Hunger Index. It is home to one in every third malnourished child in the world, with a child under-nutrition rate that is double that of sub-Saharan Africa. And yet the policy recommendations emerging and subsequently the support of this decision by the Food ministry continues to suggest that the solutions provided are worse than the problems in hand.

In 2001, the People\\\’s Union for Civil liberties, Rajasthan brought to the attention of the Supreme Court through its case 196/2001-  a string of hunger-related deaths, showing the paradox of hunger amidst plenty, with more than forty million metric tonnes of unused grains lying in government warehouses. This resulted in the Supreme Court’s decision to convert nine food and work and nutrition programs into legal entitlements. The heart of the PUCL’s case was that the Indian Constitution’s right to life as spelled out in Article 21 entitles all residents in India to a right to food, especially when we have overflowing godowns. Eleven years and more have passed since, and yet we are confronted with the same situation that we had then.

Like in the years, 2002-04, Government of India is holding grain reserves that are expected to touch 80 million MTs. This is in danger of rotting in the open, with existing storage capacity unable to cope with the huge rise in procurement and production this year.

Subsidised exports as recommended by the Rangarajan Committee and endorsed now by the CCEA will mean a repeat of the NDA years, with the Indian state willing to give a higher per capita subsidy to pigs and cattle in industrialized countries rather than feed the starving millions in India. The Committee’s other recommendation of allocations of food grains to states at prices which they can ill afford and with conditions attached will mean that these stocks (like special ad hoc allocations in 2011-12) will remain untouched. The Rangarajan Committee’s recommendations seem to cover up the actual intention of allowing exports even though the people of our country go hungry.

The estimated stock position in Central Pool has already crossed 80 million MT. The buffer norms plus strategic reforms required as on 1st July, 2012 are only required to be 31.9 million MT.  FCI and State agencies have neither the storage capacity nor the man power to manage the substantial increase in stocks in the Central Pool. A large amount of grain continues to be stored in the open in Covered Area Plinth (CAP). The CAP cover system is the system whereby the grains are stored in the open, on a raised plinth and covered in tarpaulin/ polythene. It is a temporary storage  solution and can weather not more than one season of storage. In 2010, 39.98 million MT of wheat was stored in covered godowns, while only 0.42 milliom MT was stored in Covered Area Plinth. In 2011, 15 times more wheat i.e., 6.43 million MT was stored in CAP. As on 1st June, 2012 it is estimated that 231.82 million MT of wheat will have to be stored in CAP as against 116.38 million MT which will be stored in covered godowns. The rotting of such food grains has once again been brought to light through a series of reports in the media.

Despite unambiguous orders from the Supreme Court last year to Government to distribute the grains, we are distressed by the disregard shown by the Union of India and the State Governments regarding the   implementation of the Supreme Court’s orders, and the abysmal implementation of these orders till date. Only 10% (0.6 million MTs) of the grains have been lifted of the total from the 5 million MTs of grains allocated to be distributed last year as of 31 March 2012. The states of Andhra Pradesh, Assam, Arunachal Pradesh,Maharashtra, Meghalaya, Orissa, Uttar Pradesh have lifted less than 5% of the total allocation of additional food grains.  States of Bihar, Haryana, Manipur, Tripura, West Bengal have lifted less than 25% of food grains.

The principal problem why the State Government could not distribute the grains to the poor are two-fold. First, the problem of identification of the poor in the poorest districts and second the rate at which the foodgrains were offered to the State Governments by the Government of India. Third is the ad hocism of the whole measure where state governments fear that they will be faced by an angry, discontented public (read voters) after a year when allocations are stopped. All these problems can be dealt with by the Government of India if it universalizes the PDS in these 200 districts and provides it to the State Governments at AAY rates (Rs.3 per kg for rice and Rs.2 per kg for wheat) and also ensures that reasonably long term assurances of continued allocations for the next few years are made. While the principle of exclusion to exclude 10 percent of the households   could have been ideally used even in these districts, the administration will take at least a year before such identification can be done. Waiting for such a list to emerge will mean depriving the remaining 90% of the households from subsidized food leading to hunger.

The Supreme Court had observed in it’s order of May 14th, 2011 that: “…A number of cases of malnutrition and starvation are reported from time to time. Subsidized food is really meant for this section of our society….” . The Honorable Court had also further observed that: “ Admittedly in the 150 poorest districts of India, the problem of malnutrition is very intense and is related to the inadequacy or lack of food in those areas. The Union of India must provide adequate food grains for these 150 poorest districts, on a priority basis…”

Distribution can only improve if there is a simple mechanism which focuses on inclusion of the most vulnerable food insecure populations rather than the one which is currently followed of allocations based on BPL estimates of populations using an unreasonably minimalistic poverty line cut-off of per capita per day Rs.32 in urban areas and Rs. 26 in rural areas, respectively,  per capita per day.  This is considered “normatively adequate” by the Planning Commission

The Rangarajan Committee’s recommendations need to be seen in this light. The allocations of 8 million Mts at BPL prices and 2 million Mts for the APL serve little purpose since States are unlikely to lift these foodgrains at these prices. Indeed, it is a thinly veiled attempt to open the flood gates for further exports at a later date citing the non-lifting of food grains by the State Governments as a reason. .

The immediate distribution of grains to prevent further loss due to rotting can only be done expeditiously and judiciously by directing the governments to universalize the access to the Public Distribution System at least in these 200 districts.

The problem of correctly identifying the real poor is so grave that according to GOI, almost 60% of the non-poor have been given BPL cards. Therefore it is safer to live with a few errors of inclusion of the non-poor in the eligible list rather than exclude a large number of the poor. In any case, in the 200 districts, the number of poor identified by the minimalist poverty line of the Planning Commission, vary from 50 to 84%, and therefore the additional burden of giving grain to everyone at the subsidised rates is very limited.

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The Right to Food Campaign urges you to reject the recommendations of the Cabinet Committee on Economica Affairs and insists that the Government ought not to export the grain and instead distribute to all resident in the 200 poorest districts in the country at AAY prices.