With a Grain of Salt: India, A Food-donor? Shock! Awe! Horror! Consternation! Disbelief!

September 15, 2006
Dr Bhaskar Dasgupta

The United Nations World Food Programme (WFP) dropped a clanger recently. It said that India has moved from being a net recipient of WFP aid to being the 15th largest WFP donor. This has dropped like a bombshell across the chattering literati. The electrons on the Internet were humming with shock, awe, horror, consternation, disbelief, fury, etc. and that broke a smile on my face. I could not see any reason a poor country such as India could not be a donor as well. Here's why.

The main objection against this exercise by India was the normal moan about alternate investments. You know what I mean! Why are we spending money on the military when that money can be used to build hospitals? Why are we spending money on sending satellites up into space or have a moon programme when we could use that money to improve sewage facilities or run primary health centres? And so on and so forth. In this particular case, the objections were around why are we sending food grains to Nepal, Afghanistan and other South Asian countries when there are starvation deaths, malnutrition, lack of affordable food grains,. etc. in India itself?

This needs a short discourse on how the system works. Because of food scarcity and because India is still hugely agrarian, the Indian government runs what I would call as a government procurement system. India sets minimum procurement prices and is itself a large buyer of foodgrains. These bought food grains are then deployed into two channels. The first one is for them to go into what I would call as a food grain strategic storage facility. This strategic reserve is used to manage and preserve food prices, to avoid famines, to provide seed stocks, etc. etc. and is based in a variety of massive and huge warehouses strategically placed around the country. The second system then kicks in, called as the public distribution system (PDS). This PDS system distributes subsidised and rationed essential food items to the public holding ration cards.

Both these systems are huge, massive, inefficient and bureaucratic. As you can imagine putting together a system, which sucks foodgrains out of a country the size of India with zillions of small farms, is rife with inefficiency and corruption. Stories are in abundance about hundreds of thousands of tons of foodgrains going bad and stale, rotting away, mice eating them up, etc. etc. But the fact still remains that there is a very large store of food sitting in the warehouses.

The PDS is another example. Here we have millions of tons of foodgrains sitting in centrally and strategically located warehouses. From these warehouses, the food grains have to move to regional and local warehouses, from there further to the shops and from the shops to the ration cardholders. It is an exponentially wide distribution tree. Again, it is riddled with corruption, inefficiencies and frankly a pain to use. However, think about the distribution mechanism and the huge number of households it has to supply.

So let us turn to the objections:

Malnutrition - Yes, there is malnutrition, but to avoid malnutrition, you need a balanced diet. To get a balanced diet, you not only need the raw food-grains, you also need fuel to cook it, you need money to provide fruits and vitamins, you basically need to be earning a bit more than the below poverty line level currently in India. Therefore, even if the existing ration amounts are increased, the PDS inefficiencies are removed, malnutrition is still going to exist, because the poor saps do not have primary health care, they don't have fuel, they have to work in desperate conditions, and so on and so forth.

Starvation - Yes, again, one sees the same problem. While starvation deaths have been dramatically reduced, there are still pockets of deprivation deep in the rural areas. There is no PDS in the world, which can get food into each and every corner of a country this size. We have heard about starvation deaths in western countries whose welfare systems are explicitly designed to provide basic necessities to every member of their population. Does one think that by withholding two million tons or what have you from Afghanistan, that malnutrition and starvation deaths will be removed? No way, Jose!

Some other points need to be made! How do you get to the right amount of buffer stocks? It is an inexact science, as it is hugely dependent on the weather, the crop yield, the inefficiencies in the entire system, the economy, the food prices - both domestic and international, etc. etc. Also one has to recall that these foodgrains are perishable. One cannot store foodgrains for long, especially when considering the huge amounts stored in India. They have to be regularly recycled. In other words, take one or two crop old stores and shove them out to the PDS and if you cannot, the foodgrains go bad and have to be converted into animal fodder or simply burnt. After that top up the missing bits with more purchases during the next crop.

One also knows the basic level of foodgrains required supplying the PDS and keeping a respectable buffer stock for managing the food prices, as well as keeping something aside for a rainy or dry day as the case might be. Throw in few tons to cover the natural wastage, some corruption, some for the growth of population, some for weather patterns, some for the domestic and international prices, some for luck and you have the target level of food grains needed to maintain a good buffer stock. Unfortunately, the crop yield does not work to mathematical levels, so one may well have a higher crop yield and so the buffers overflow, or the yield is low and the government buys some from abroad. In 2001-2002, India had sixty million tons of food grains versus approximately twenty million required, while this year food grains had to be purchases from the open market because the buffer stocks were too low. Overall there is a greater amount of foodgrains than what would be optimum. And like many other things - use it or lose it!

So here we are, large seas of food grains in warehouse, full knowledge that it's much more than what is required, much more than can be distributed and some very hungry neighbours. The fact that you get some brownie (no pun intended) points by gifting foodgrains to Nepal and Afghanistan also plays a part, but frankly, all the moans are because people do not know the logistics of the food supply mechanism. If they did, they would realise that gifting foodgrains is not really taking food away from the starving or malnourished.

If the above did not make sense, think about something that almost every child experienced. When your plate is full of something that you don't like or you left something on your plate, your mum bellows at you, "Do you know there are children in Africa who are starving and here you are wasting food? Start shovelling!" I don't know about you, but that sort of didn't work for me. My suggestion that I will package up the leftover food and mail it to Africa was not really received well and in the interests of not talking about gory details, I will not talk about the rather violent reaction. Seriously speaking, it is the same thing. Yes, it sounds nice and logical that one should not go about giving food away to others, when one is starving, but there is much more to this than what meets the eye.

All this to be taken with a grain of salt!

Dr. Bhaskar Dasgupta works in the city of London in various capacities in the financial sector. He has worked and travelled widely around the world. The articles in here relate to his current studies and are strictly his opinion and do not reflect the position of his past or current employer(s). If you do want to blame somebody, then blame my sister and editor, she is responsible for everything, the ideas, the writing, the quotes, the drive, the israeli-palestinian crisis, global warming, the ozone layer depletion and the argentinian debt crisis.
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Dweep Chanana
September 16, 2006
09:12 AM

You make a good point that malnourishment in India is more than just a question of food supply and one not solved by redirecting food aid.

I would argue, however, for taking your mother's advice more seriously. Mine never mentioned Africa for the simple reason that one doesn't have to look that far to see starving people. Saving food is first a matter of principle, before a matter of practicality. It is just plain wrong, because even if it doesn't help Africans, it may others.

On the issue of food aid in general, I take a political perspective, not a domestic one. You can read my post on my blog or at desicritics.

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