Better food management

BS OPINION

This is hardly surprising. For, this has happened largely because the government has been supplying foodgrains to exporters from the Food Corporation of India (FCI) stocks at rates below those at which these grains are sold to the domestic wheat-based industries and trade.

Besides, the supplies are delivered at port towns. What is indeed amazing is that of the 22 million tonnes of grains shipped so far, the share of private exporters is hardly 3 million tonnes.

The rest has been exported through public sector companies like the STC, MMTC and PEC. Now, the FCI, too, is planning to enter the export market directly.

Though there is little harm if public agencies get into exports, the perpetuation of their virtual monopoly through restrictive policies towards private exporters seems untenable.

This is also because it has now become imperative to woo the private trade "" hitherto practically eliminated from foodgrain marketing because of the open-ended procurement policy "" back to this market.

Their continued alienation and the government's heavy dependence on public agencies for procurement, distribution and even export of foodgrains ""all essentially loss-making operations "" would only add to the Centre's food subsidy bill.

This apart, there is another good reason for recasting the grain export policy. In the past, exports kept surging only till the official sale prices were below those in the international market and the railway rakes were readily available for grain transportation.

The moment this scenario changed, largely because of the depletion of stocks in the wake of last year's drought, exports began decelerating.

Though the government has been assuring the exporters that it would meet the supply commitments, the wagon availability position does not seem to have improved even though drought-related foodgrain movements are practically over.

Moreover, exporters also face several other problems, including frequent changes in the documentation requirements.

Though some irritants have been removed, many more are still pending, arbitrary price fixation being the most significant among them.

Thus, what is needed is a stable and non-discriminatory foodgrain export policy for public as well as private grain exporters.

As part of this, the norms for assessment of surplus grains available for exports need to be reviewed and suitably amended.

Expert studies have indicated that the current foodgrain buffer stock levels are far too high. No doubt, a suitable buffer stock is critical for food security, but that stock need not be too large to become a burden on the exchequer.

At a time when ships loaded with grains are floating around in the high seas for delivery within hours of placing the import orders, blocking of huge resources in unproductive grain stocks is imprudent.

At the same time, the procurement operations need to be confined to meeting the requirements of the buffer stock and the public distribution system only, leaving the rest of the grain trade open to private players. Such a policy alone would ensure proper management of the domestic food economy and exports.