Yesterday’s headache was unintentionally a good thing for today. The overcrowded granaries, which had been the subject of controversy for many years before the Covida-19 pandemic, enabled the centre to ensure that the majority of the population, whose livelihood was affected by forced isolation, did not go hungry.
If it so wishes, the Centre can distribute more than one annual ration to 800 million beneficiaries of the National Food Security Act (NFSB). So far it has been decided to give a free ration of three months plus one kilogram of legumes per family (the choice of legumes varies according to regional taste).
According to the Food Corporation of India (FCI), wheat and rice stocks in India’s central pole will be reduced for the tenth time. On 1 March, rice production was estimated at 77.72 million tonnes (including 19.24 million tonnes of unprocessed rice). The total annual cereal requirement for the continuation of the NFSA, based on an average of the last three years, is approximately 54 million tonnes. This is the position taken even before the country starts buying wheat for the 2020-21 season, which starts on 1 January 2011. The month of April has begun.
To date, all NFSA beneficiaries receive 5 kg of wheat or rice per month at heavily subsidised rates: Rs.3 per kg of rice, Rs.2 per kg of wheat and Rs.1 per kg of coarse grains. According to the latest statement by Finance Minister Nirmala Sitaraman, each of them will receive a further 10 kg of wheat or rice within the next three months.
Although unintentional, this may create the necessary space for a new wheat harvest (which may, however, be delayed by the labour shortage associated with Covida-19).
Assuming that the selection of food grains by the state grain distribution system (SDS) in April-June remains at the level of February 2020, the basic calculations show that normally around 9.3 million tonnes of wheat and rice would be withdrawn from state grain stocks. Following the government’s decision to double the allocation, almost 19 million tonnes are expected to be exported.
The healthy state of stocks and the ease with which not only the central government but also the states were able to announce free dry rations for the poor led to a reconsideration of whether India should increase its quarterly grain storage standards in order to survive crises such as Kovida 19. This view has long been divided between the cost of maintaining a huge buffer stock far in excess of set standards and the waste resulting from the excessive quantities purchased under India’s open-ended procurement policy. This is a real concern for the government, which is heavily dependent on cash – the CFI has already taken the unprecedented step of borrowing from a small piggy bank to support its activities.
The Centre reviews the standards for the buffer storage of food grains every five years, with the last review taking place before the adoption of the national food security law in 2013 (see figure). As a result, the government is obliged to take measures from 1. The Commission considers that it is not necessary to take such a measure. The Company has approximately 4.5 months of DUPs in April each year (based on the average lead time of the last three financial years). Buffer time to 1. July is the 9.2 month rp, the 1st. October – 7 months and the 1. January – about 5 months. However, the current state of cereal reserves is far above buffer standards, mainly due to an open procurement policy that has become too politically sensitive to be reversed.
Most of the arguments in the last decade have focused on the advantages or disadvantages of the money channel offered by the Aadhair Identification System (AIS).
The last time the government decided not to increase the buffer rule, arguing that the PDS will gradually shift to cash transfers instead of grain, ITNI member Aayog Ramesh Chand told the Business Standard. However, as the switch to DBT is not significant, as he indicated, increasing the buffer stock quota may be the only solution on the table.
In 2013, Mr Chand chaired an expert panel that advised to increase the quarterly buffer from current levels.
Eshok Gulati, former President of the Commission on Prices and Costs in Agriculture and current President of the Information System, Professor of Agriculture at ICRIER, believes that a cash payment would still be the best option. He notes that buffer rules have been established to take into account the annual release of food grains by the PDS in the framework of the NFB. The failure rates in the past three years at the NFSA show that they are much lower than expected. So where’s the need for a review or a raise? He asked.
Buffer standards for 2013 have been developed taking into account the annual requirement of the Food Grain Center within the NFSA, which amounted to approximately 61.2 million tonnes. But in the last three years the amount of waste has been 53-55 million tonnes. So from this point of view, there is no need to change the standards, Mr. Gulati said.
He said that even in the current situation, if someone had cash instead of dry rations, he could buy food to eat somewhere. Anyway, what are you going to do with the grain if the chakkas (flour mills) don’t work, Mr. Gulati said.
Indeed, access to food remains the key. That is why former Minister of Food and Agriculture Shiraj Hussein called for the construction of more public kitchens for workers and day labourers in the cities and for the opening of distribution channels for the smooth transport of processed food to urban consumers.
Covid-19 is a one-time crisis. As a result, planning based on this principle may not be sustainable in the long term, but we need uninterrupted supply chains to distribute available stocks without relying on stocks, Hussain said.
In short, an increase in buffer storage based on Covid-19 will not be a good idea in the long term.