Monday, September 6, 2010

No Free Lunch

My column on the food crisis, up today on Yahoo! India, can be read here.

15 comments:

Anonymous said...

I believe that the Supreme Court was right in in decision. If the Executive does not perform its function who can address this issue?
Food grain rotting has any how eroded its value? The accounting by FCI will either idicate this in stock or has to be written off.

I believe the message was if you have not taken action even after the first suggestion/order what are you doing?

Girish Shahane said...

You do not address my point of the delivery mechanism involved. Neither did the Supreme Court. As I mention, there are aspects of the issue that can be addressed by courts. An investigation can be ordered into negligence, for example.
Anyway, most Indians, like you, obviously prefer the simple, easy and wrong solution.

Anil said...

Nothing wrong in supreme order. Isn't it a blot on Indian democracy that many poor, esp. kids, are devoid of food. If the PDS is inefficient then what is the Govt. doing; make it efficient.

Then comes your theory that procuring prices of food grains by FCI is high, resulting in Inflation. So, according to you, Indian farmers are dictating the prices. FCI stores only food grains. FCI has no relation with Vegetables, fruits, oil, diesel, petrol, electricity which are the new inflation boosters.

Summary is quick raising Indian urban middle class and hyper rich are dictating the prices, while Govt. is mutant spectator. Govt has to change its policies, devise new strategies to make the growth inclusive to all the sections of the society. If Govt. has no ideas at least make the system corruption-less.

Girish Shahane said...

Anil, the Minimum Support Price involves over twenty five crops, including not just grain but also coconut, oil seeds, tobacco and others. It is not my theory that this causes inflation, it is simple economics. If the Minimum Support Price is below market rate, no farmer will sell to the government. To procure its stock, the government HAS to pay above market rates. Naturally, soaking up a substantial amount of the supply has the effect of raising the price for the remainder of the crop as well. Therefore, market prices rise as a direct result of high minimum support prices.
There is a knock-on effect on produce not covered by MSP, because farmers plant more crops that have guaranteed returns, reducing the area that would otherwise have been given over to non-MSP produce, thus lowering the supply and consequently raising prices for those goods.
This is part of a complex mechanism where, as I point out, the government wants prices to be high for producers and low for consumers, in the context of farmers being both primary producers and primary consumers. It's an extraordinarily tough trick to pull off.
Of course, other factors come into the inflation equation as well. High fuel prices, which the government can do relatively little about, raise input and transport costs, for example. But bad storage does not cause high food prices, because we've never had good storage of food. The media happens to have hit upon that issue recently, but the idea that all food was in the past carefully warehoused by the FCI is an illusion. Since we had bad storage even when food inflation was low, that cannot account for why prices have risen in the past four years.
While I have not written one word supporting the government in the article, the order 'give free food' is as meaningless as your statement about the PDS: 'make it efficient'.
I agree entirely that poverty and hunger are shameful, but having the Supreme Court give an order saying, simply, 'eliminate poverty' is hardly going to help.

Anil said...

Yes, But Supreme court is the guardian of constitution, which, inturn, serves common man. Judiciary is a part of our system. When one branch fails to protect poor, then the other should come into the scene. When elected members are busy counting their IPL money, who will do their duty.

Supreme only said to correct the ongoing mistake. It never ordered to transfer agricultural admin to lawyers and judges.

I agree with you....Media will change the headlines as soon as it smells another. But, isn't this unforgivable .... a mistake is not corrected even after it is xposed to the whole world

Girish Shahane said...

Anil, I agree that the Supreme Court is the guardian of the constitution. The constitution guarantees the separation of judiciary, legislature and executive. It says nothing about free food for the poor.

Sushrut said...

Dear Girish
Brilliantly written..
I absolutely agree with you, that the role of supreme court is not to dole out food grains as they are rotting, but rather to give directions to the ministry to ensure that an effective mechanism is in place, which addresses the issue..
perhaps , the judiciary in its overeagerness to address the issue overstepped the line..
no wonder, the politicians scream Judicial activism at such instances..
I also agree that the government should exit and let the market forces determine the buying price from the farmers.. but I am sure that No politician/Government will like to let go of this issue ever, for the simple reason that farmer/agriculture is always a limelight hogger..
keep writing..
Sushrut Deshmukh

Anonymous said...

Please explore what the state governments are doing or can don to stem rising prices. There is politics going on between UPA-ruled states and non-UPA ruled states. Moreover, nobody adheres to rules such as displaying prices of items before their shops. Even hoteliers do not display prices of items as per rules. This means that everybody is making hay while the sun shines. A concerted effort by the state as well as the central government should be made to tackle this issue.

Pratul Birla said...

Let us keep aside if the Supreme Court order was tenable or not for the moment. Let us focus on the ministry itself.
You call Sharad Pawar a senior minister . Fine. Seniority comes with the ability to handle responsibility. There has been gross negligence on his part to handle the affairs of the ministry and its compounded effects are just showing.
Who should be addressing the point of delivery mechanism. Is it your job or mine or is it the job of the Minister and his cabinet collegues? If he was indeed finding the responsibility so awesome just to see that the distribution system is improved , what business did he have to take such an active role in cricket which takes away so much time from his schedule? And it is not just about cricket. It shows his attitude towards responsibility .
If the Supreme Court has said something not tenable , please understand the desperation that a humane judge would have felt to have issued this order.
Is it the business of the government to get stuck in the issues of legality or is it to act on time so that such a situation never arises? So please do not make the Supreme Court a villian of the episode. Clearly the minister deserved the flak.

Anil said...

Of course, there is nothing free. The Constitution didn't even assume that there will be food grain wastage and hunger, simultaneously. This poor-rich gap is the root cause for the spreadof maoism.

Giving market forces free hand in every department, that too in India, is like riding a tiger.

Congress, BJP or Communists who ever be the ruling coalition, it is their duty to ensure basic living needs of every Indian.

Sushrut said...

There is no point in singling out any particular politician, all of them are same in our country.. I think it was George Bernard Shaw, who said that " politics is the last resort of a scoundrel" and this couldnt be more truer than in our country.. It is said that even among thieves/scoundrels, there is a code of ethics, but sadly in our country , the politicians are so brazen and shameless, that even strictures passed by supreme court has no effect on them at all..
therefore, like so many other issues revelant to common man are swept under the carpet.so also this issue.. and again next year some newspaper/media will highlight how the food stocks are rotting in FCI godowns and the cycle goes on year after year..next term, it will be some other politician holding agriculture portfolio..
yehi hai mera bharat mahaan..

Anonymous said...

3 points : Look at TN : They have a scheme(never mind the consequences of that decision on the labour market) where every BPL family gets a sackful of rice,cooking oil, dal, tamarind, chili and salt. It has been a big success statewide. Clearly the govt mechanism works when and where it wants to.

Second: If the govt. wanted to it could cede control :ask institutions like Akshay Patra, Hare Krishna to pick up the food grains, pay them to clean it out and then use it for distribution. Why they can even ask a Big Bazaar or a Hypercity to undertake this for a pre-defined fee with the proviso that if the grains thus distributed were found to be rotten, there would be consequences.

3: The SC may have overstepped the mark but in India the executive is increasingly shying away from its responsibilities and its a good thing the SC steps in now and again like a class monitor. They are filling in a gap and its for the executive and legislature to ensure that they dont give cause for the Courts to step in. Their diktats have gone some way in preventing sundry desperate and maybe motivated groups from organising food riots
S anand

Girish Shahane said...

Pratul, that comment about 'senior minister' has led a number of readers to believe I am in some fashion supporting Sharad Pawar. That is far from the case. If you read the piece carefully, there is nothing in it that supports the government in general or Pawar in particular. I have specifically spoken of the negligence involved in letting grain rot.
You and I and other ordinary citizens have every right to criticise Sharad Pawar in the harshest terms. However, I believe there has to be propriety maintained between different branches of government. Ministers, judges, military chiefs and bureaucrats, ought to speak respectfully of each other. Politicians, no matter what their other faults, are usually scrupulously polite in speaking of the judiciary. However, there's an increasing tendency on the part of judges to talk down to political leaders.
SA, many government schemes are working to take subsidised food to the poor. TN is one of the pioneer states, and has consistently been among the best deliverers, as you point out. But I doubt if HyperCity or ISCKON could do the job of feeding three hundred million people living in very remote parts of the nation.

Gotya said...

I like your blog Girish. Keep up the good work :)

Anonymous said...

hi:
If Hypercity/iskcon could deliver to the urban poor, it would free up govt resources to set up effective delivery systems in rural india. Why not start with widening the ambit of India Post for one ? Pre-packaged meals - like what is given during disasters could be sent thru the postal system . Why not even use the way the Election Commisison manages to reach out -if we can find a way to reach a voter in a remote area, surely we can find a way to reach him some food. S Anand