PM mum; his colleagues talk differently!

There is intense speculation in the concerned sections, agri ministry, wheat trade and the prevailing political situation with state Assembly elections in some major states that there is a pressure on food grains prices. More so the wheat prices.
Wheat prices have increased to a record high on tight supply but the Centre is not giving up hope to manage the situation.
What has given rise to speculation is the fact that the recent Cabinet decision to cut foodgrains subsidies and also the quantum of PDS supplies for the BPL/BAL target groups met with stiff resistance from at that election time is also the most sensitive time for foodgrains supplies. The PDS, in most states, with all its stated goals is also a source of heavy leakage and widespread corruption. So, the private traders also play a role in creating artificial scarcities. Wheat trade, both the government and the private, is a den of vested interests and source of all corruption and manipulation.

The best administered government loses power for the simple reason essential supplies are not made available on time. That is one reason why the Congress lost power in TN in 1967.Even onion prices could lead to destabilisation, as proved in one instance when Indira Gandhi famously admitted!

In mid-January wheat prices at Hapur, the very nerve of wheat trade increased to Rs.1012.50 a quintal, up from the previous close of Rs.975.Superior grade wheat prices too have begun to rise, with desi wheat from MP quoting at Rs.1,175-1,255 a quintal. All round demand from stockists and flour mills has led to demand outstripping supply. The Food and Consumer Affairs Ministry claims the wheat prices in North India slipped in December from its November price. But the Finance Ministry has a different story to tell. The whole sale price index (WPI) prices have been continuously rising, the wheat price index rose too. Of course the department is closely monitoring the situation as the subject is a highly sensitive one and that much was said by R.N.Das, Secretary, Dept. of Food and Consumer Affairs and Public Distribution. The Centre is releasing 1.5 lakh tonnes of wheat every month since Jan to control prices. There is a lower than anticipated production last season and falling stocks with FCI. In 2005-06 seasons, wheat production is projected to have slid to 72 million tonnes from 72.11 million tonnes the previous year. Stocks of wheat are below buffer norms. As per the Food Ministry’s revised norms, the country should have a buffer stock of 8.20 million tonnes of wheat and 11.80 million tonnes of rice. Though the over all stocks match the requirements, as on Jan.6 the granaries have only 6.01 million tonnes of wheat and 14.08 million tonnes of rice. For the targeted PDS wheat can last for four months.

It is in this context imports are talked of as an option to tide over the current situation, the agri minister Mr.Pawar ruled out such a move. This is of course typical of any politician, more so Pawar who is given to much brave talk. The new domestic wheat arrives only in march-end, though the ministry sees wheat stock declines to 1.5 million tonnes by April first. Wheat production is expected to be higher this year, at 74-76 million tonnes, the final outcome could not be predicted given the climate conditions that changed dramatically this year. The wheat crop acreage had also been on the rise, 242.96 lakh hectares, up from 240.88 lakh hectares last year.
One more related development is the news that the PDS off take this year is likely to hit a record high. It could surpass the record high of 292.77 lakh tonnes achieved in 2004-05.

One more worry is the Planning Commission study that the leakage of BPL grain under PDS is to the extent of 55%.The recent Cabinet decision to reduce subsidy and raise issue prices were supposed to come to Rs.4,000 crores, it is the political compulsions to win elections that would finally decide whether India imports wheat or not.
The AICC plenary session said I has to find ‘ways and means’ fulfill they are party’s ‘nayi zimedaari’! We thought the party is in office for the past twenty months and this is quite a long time for any government to show performance. Then, even after more than 20 months the party talks of its new responsibility?

As days and months roll by the government of Dr.Manmohan Singh (and indirectly of Sonia Gandhi, after all she is the real power wielder) is proving to be a routine exercise, yes all nice and polite words, everything seems fine while the series of scandals seem to rock the government day in and day out. How to interpret this government? Interpret its performance?
As far as the critical employment and agriculture sectors are concerned everyone, why even the new born babies must know that these are perhaps the two most popular sectors where the action must be demonstrative. Is this government doing the same?

In our considered opinion it is not!
Take the performance of the agri sector.
There are ominous indications that India is running short of foodgrains, wheat in particular and that is one major consideration, it is widely interpreted, as the reason for the government’s recent decision to hold back the food subsidy cut as well as the cut in allocations to the PDS.

The Cabinet met and took the decision to cut food subsidies and food allocations for the PDS, right? Then, why suddenly go back once the UPA allies made the required noises to keep the election fever at a high pitch. There is no other reason except the political compulsions to keep the allies pleased and not to disturb the coalition which for all purposes still looks fragile.

Sharad Pawar, the agriculture minister admitted that the decision put on hold “till after the Assembly elections in five states. He said further “The decision will go through; I have to speak to the political parties and build a consensus on it.
Experts, not government experts, but private experts and independent commentators give the real reason otherwise. The fact is that agriculture production is almost stagnating, if not declining,0nly 1.2 per cent growth in foodgrain production and the government hopes it will grow to 3 per cent, as the minister says the standing rabi crop is encouraging. He must be knowing. But we can’t trust the politicians so uncritically for they are known to speak in double meaning. They may say one thing to hide the other thing. The minister himself hadn’t spoken about the foodgrains production status but only mentioned the sugarcane crop expected to go up to 180 lakh tonnes as against 120 lakh tonnes. But we should remember that for the past two years we are importing sugar as we are of course importing vegetable oils, pulses and we have almost stopped exporting rice.

The real picture honestly we don’t know. Nor our government agencies are transparently functioning to know the real state of affairs. The ICAR is no help. It doesn’t even update its old directories! There is so much of a hierarchy and a sort of informal fear psychosis prevailing in the ICAR and the agriuniversities. There are some vested interests in agri research circles that keep the genuine flow of information from Delhi to the states, from the top to the bottom. State agri depts. are the most neglected and the most bureaucratised.


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