April 13, 2012

 

India's bumper grain harvest may result to waste

Fears are rising that India's state granaries will not be able to handle the surplus and food that could feed the nation's hungry millions will go to waste as India prepares to harvest a record grain crop for the second year in a row.

 

Two years ago, Parliament erupted in chaos as the opposition slammed the government over the issue of rotting grains due to lack of sufficient storage space, and early indications are that this year may be no different. Food ministry officials say the government will add between 3-4 million tonnes of storage capacity by May or June, just ahead of this year's wheat harvest, and a further 11 million tonnes by the end of next year. But in the past red tape has delayed such plans, leaving food out in the open to rot.

 

"There will be a serious storage problem this year if proper steps are not taken on time," Farm Minister SharadPawar said in an interview.

 

India produces enough food to feed its 1.2 billion people and the government purchases millions of tonnes of grains from farmers, guaranteeing them high prices and using the food for its subsidy programmes. But corruption and bureaucratic inefficiencies means that food doesn't always reach the neediest. Failure to meet promises to improve storage and distribution networks has compounded the problem. As a result, there are more than 200 million food-insecure people in India, the most of any country. The International Food Policy Research Institute's 2011 Global Hunger Index ranked India 67th out of 81 countries.

 

In mid-January, Prime Minister Manmohan Singh called India's malnutrition problem a national shame after a survey revealed that 42% of the nation's children are underweight. Inefficiencies in food distribution push up food costs even for those Indians who are not starving and are a major reason that inflation remains high. India's storage system is likely to come under even greater pressure in years ahead as India embarks on a multi-billion-dollar plan to funnel millions of tonnes of extra subsidised grain to its poorest people. India's cabinet last year approved a food security law and Parliament is expected to debate the legislation later this year.

 

"What if there's a drought once the food security law is in place. We can't rely on imports. We have to have storage capacity," said ParulSoni, executive director at the New Delhi office of consultancy Ernst & Young.

 

The combination of plentiful monsoon rains and high minimum purchase prices for wheat and rice means the country is forecasting an all-time-high grain production of 250.42 million tonnes in the crop year ending June 30. The government says it will have 75 million tonnes of grain stocks by June, but state-run warehouses have a capacity of no more than 63 million tonnes.

 

Food Minister K.V. Thomas, in an interview, said the government was taking steps to reduce stockpiles, including allowing traders last year to export wheat and rice surpluses and increasing food allocations for poor people. Even if the government meets targets to expand storage capacity by June, that would still leave around eight million tonnes of grains out in the open -- vulnerable to weather and attacks by rodents. The government will likely also have to store 20 million tonnes in makeshift spaces, covered by water-proof sheets and resting on wooden platforms erected over bricks. Pre-monsoon showers already have damaged some of the newly-harvested wheat crop in the breadbasket state of Punjab in western India.

 

"Harvest of the wheat crop is not yet in full swing...We fear that the storage problem will only increase when government procurement picks up," said a senior agriculture official in the Punjab state government.

 

A federal food ministry official said: "We are surely facing a problem of plenty. Either you supply more grains for welfare programmes or keep huge inventories, there is a high cost involved in all."

 

Up to 7% of the country's annual grain production goes to waste because of insufficient storage space and creaky transport and distribution networks, said Soni of Ernst & Young. Only about a fifth of current warehouses are located near areas which don't produce grains, he added, meaning the government has to rely on overloaded railways for transport, resulting in delays in reaching the needy. Efforts to attract private investment have foundered due to bureaucratic hurdles, experts say. The government should offer tax breaks to attract investors to build warehouses and other infrastructure, they add.

 

Poor coordination between the federal government and India's states also results in the spoilage of grains that are properly stored. More than a million tonnes of wheat in state-run warehouses from previous bumper crops is likely to go bad because the government has failed to distribute it over the past two to three years. In other cases, grain spoils due to the lack of simple things such as high quality weather-resistant bags. Hardy grains such as rice can be stored for long periods, provided such basic measures are taken.