Choking on food.

After the near famine of the sixties India has always maintained buffer stocks of food grains so that we never have to face such a situation again. Normally 21-31 million tonnes of grains are stored as buffer stocks of which 5 million tonnes are for emergencies. But on the first of this month the government held 77.5 million tonnes of food stocks. Stocks reached a record high of 82.4 million tonnes on 1 June 2012 so stocks could peak at 88-90 million tonnes this June. Livemint, 15 May. The Food Corporation collected a record 40 million tonnes of rice in a year of inadequate monsoons showing government intentions. Our stretchable storage capacity is 50-60 million tonnes so millions of tonnes of grain are left out in the open to be eaten by rodents or deteriorate in quality and have to be sold as animal feed. India exported more rice than Thailand last year at huge losses because international grain prices are low. The cost of food to the economy, which is a sum of support prices, additional procurement charges, storage and distribution costs, has doubled in the last 6 years to Rs 1900 per quintal for wheat and Rs 2400 per quintal for rice in 2012-13 and any effort to increase procurement will increase subsidy costs sharply. When the government is desperate to keep fiscal deficit at 5% why is it wasting tens of billions of rupees in stockpiling excess food when we do not have the requisite storage capacity and a lot will go to waste? This is because it is part of the election strategy of the Congress. The Congress hopes to pass the Food Security Bill which will provide wheat at Rs 2 per kg, rice at Rs 3 per kg and other grains at Re 1 per kg to 75% of the rural and 50% of the urban population which will amount to some 800 million people. Once the bill is passed the Congress will release all this food for distribution earning enormous gratitude from the poor. Excess supply will quickly bring down prices and control food price inflation for which the Congress will claim credit while not revealing that it caused the inflation in the first place by hoarding food grains. Food grain for the Public Distribution System plus open market sales was 56.4 million tonnes in 2011-12 and 47.2 million tonnes until December of 2012. Assuming 50 million tonnes for PDS plus 10 million tonnes for open market sales and 5 million tonnes for emergencies estimated requirement is 65 million tonnes. So there will be a surplus of 20-25 million tonnes. The budget for food subsidy has been kept at Rs 9 trillion and any excess procurement will sharply increase costs. Is the Congress ready to sacrifice the nation just to win elections? The answer, sadly, is yes.