Food prices need an urgent check

Food prices have been galloping by the week at their fastest in 11 years,. They have risen to an unprecedented 19 per cent from 17.47 per cent the previous week. The humble potato has shot up the most, by 102 per cent. This speaks volumes of the inefficiency, and callousness, of a country’s government in that it cannot even grow enough potatoes so that scarcity of the item does not put it beyond the reach of the vast majority. The price of every commodity, from pulses to fruits and vegetables and wheat and rice, have gone through the roof. The cheapest, poorest quality of wheat available costs Rs 20 per kg, an amount that will last barely five days for a family of four. The government’s disregard for the so-called below-the-poverty-line population is evident in the rotten quality of grain they are made to pay for under the public distribution system. The government should have by now tackled the rising food problem on a war footing as it has intensifying for some months. When it became known that the monsoon was erratic and there would be a shortage of food grains, the agriculture minister went out of his way to assure that there was enough stock in government warehouses so there would be no shortage in the market. In fact, Mr Sharad Pawar was pleased that they had a record buffer stock. But what good has it done? The food grain from the buffer stock is supposed to be utilised in times of shortage to calm prices down. Wheat prices have shot up by 30 per cent over the past year. And what did the government do? A Congress functionary from Mumbai wrote to the Prime Minster and the Congress president complaining about the wrong policies of the government on the wheat front, which has only helped unscrupulous traders. In the case of wheat, the staple diet of countless Indians, the government had procured wheat at a minimum support price of Rs 1,000 per quintal, which is why it was able to procure huge quantities of grain. Yet, under its open market sale scheme, it has released wheat at a high price of Rs 1,550 per quintal. The justification for this is questionable. The government spends Rs 40,000 crores on food subsidies. Where is the subsidy utilisation? There are no takers for grain at such high prices. And this is the wholesale price. The government has even allowed the state governments to charge up to Rs 200 per quintal as distribution charge. How does it expect prices to fall in the open market? The government, which is so concerned about GDP growth, probably feels that since agriculture contributes just 17-18 per cent to GDP, it’s not worth worrying about. But food has a supply side problem that must be tackled because it concerns the stomachs, health and nutrition of the people. It cannot pass the buck of high prices and inflation on to the Reserve Bank of India. The RBI can take monetary measures to control inflation due to excess liquidity, and has been doing so admirably. But supply side shock cannot be tackled by monetary measures. It needs administrative measures, which only the government can take. It is, therefore, extremely surprising and disturbing that the government is not taking any measures. It almost seems as though electoral politics is involved. Last year, when food prices started to rise on the eve of the elections, the government took various measures, like imports, cutting import duties, curbing exports etc. Now that all major elections are over, it is not in a pro-active mood. This is what is so disturbing.