'Centre should change its policy'

Interview with E. Chandrasekharan Nair, Minister for Food and Civil Supplies.

Kerala's Minister for Food and Civil Supplies E. Chandrasekharan Nair says that if the current public distribution system (PDS) in Kerala is destroyed, the State will experience a serious food crisis. Excerpts from the interview he gave R. Kris hnakumar:

What has been the impact of the Central policies on Kerala's public distribution system?

As a result of the new policies the offtake from the State PDS is coming down. One reason is the inefficiency of the procurement system, another is the poor quality of the articles. But the most vital one is the pricing policy. At one time in Kerala, whe n the prices were more affordable, the offtake of cereals from the PDS, including wheat, went up to 18 lakh tonnes a year. The offtake would have been higher if the quality was better. The first priority of the Central Government was to increase PDS pric es to such a level that now nobody goes to the PDS.

The Union government has also drawn a mythical border called the BPL (Below Poverty Line), to provide merely 10 kg of rice to just 25 per cent of the State's population. What is the big idea when the actual requirement is to provide subsidised food for 5 0 per cent of the population? What is the BJP government's priority - is it providing Internet facilities and mobile phones, however much they may be needed in the modern world, or basic food at prices that ordinary people can afford?

How does Kerala view the Centre's decision to sell excess wheat in the open market in the northern States?

So far the FCI (Food Corporation of India) used to sell at the same price in every part of the country. Now that is being changed. They say that they are going to sell wheat at Rs.6.50 a kg to private traders in the north. How can they sell at a lower pr ice to private traders who want to make a profit and demand a higher price from a State government that wants to provide wheat to the common man at affordable prices? Can wheat be sold at two prices in the ration shops in Kerala?

What should be the policy to sell excess stock? You reduce the price and sell it through the PDS. In Kerala, if needed, we can sell two lakh tonnes. Then the poor will have food. Why should you give it to the traders at reduced rates? What is the objecti ve in all this? Is it to throw away the PDS and become a traders' distribution agency? A government wants to give just seven million tonnes out of a total 50 million tonnes of stock to the PDS at a higher rate and the rest is to be distributed over a per iod to the traders at a lower rate. Can there be a more anomalous situation? Negotiations are going on. If the procurement price, the support price and the food subsidy are not continued, India will go back to its pre-Independence stage of scarcity on th e food front. It is a suicidal policy. We cannot go by the prescriptions of Western economists and destroy all that we have built up. Even in Western economies, food is heavily subsidised.

Dealers claim that ration shops in Kerala have become unviable. How true is this statement?

They have become less viable. All the ration shops together sell only around 50,000 tonnes of foodgrain, while at one time Kerala used to sell 1.5 lakh tonnes. Their plight is really sad. For years they tried to develop it as a means of living. Many shop s have become unviable. They are continuing in this business with the hope that things will improve.

What is the State's actual subsidy burden now since the offtake has come down?

We are giving 16 kg of rice at Rs.10, subsidising more than Rs.2 a kg. We are also providing the same subsidy to an additional 17 per cent of the population so as to include a total of 42 per cent in the BPL category. Together we expect the annual commit ment to be around Rs.150 crores. But it all depends on the offtake. BPL rice is sold completely, and this happens only in Kerala.

Why is that so?

Because we have a better delivery system and because of the low price. No shop has been closed down so far, even after all this.

The Ration Dealers' Association claims that 10 to 15 per cent of the ration shop owners in Kerala have sought either cancellation or suspension of their licences...

I don't have official figures on this. It is easy to blame the State government. But this is a clear case of a problem with the national policy. We might face another problem very soon. The prices will increase further if there is an increase in petroleu m prices.

Recently Kerala proposed importing food directly, especially because the FCI was providing poor quality foodgrains. Why did the State not go ahead with the proposal?

The problem in all this is that the grain merchants are a powerful lobby, and after all they are the backbone of the BJP government. The proposal is not viable now because the Government of India has increased the import tariff. But there is a logic in t he argument that we need not import because there is surplus production.

What is the State government planning to do to see that the ration shops are not closed down?

We are trying to help. We have now allowed them to buy and sell essential articles other than foodgrains, sugar and kerosene. We have also decided to give them up to Rs.5,000 by way of credit through the State Civil Supplies Corporation (Supplyco) for se lling essential and household provisions through ration shops as in the case of the Maveli stores. They can even sell vegetables. That way we are trying to give a boost to business in the ration shops.

The new policies are driving customers away from the ration shops and to the open market. What impact has this had on sales through the Supplyco outlets, the second tier of Kerala's PDS? In the context of the liberalisation policies, can the Supplyco outlets not be made to play a more prominent role as a price control and food provisioning system?

Sales through Supplyco Maveli stores and super-markets have increased correspondingly. The Supplyco turnover is nearly Rs.800 crores now. We are planning to start at least one Maveli store in every panchayat. By November-December, all panchayats in Keral a will have at least one Maveli store each.

Are there any constraints to develop this chain of outlets further, so as to provide relief against a possible disintegration of the universal coverage offered by the ration shop system?

There are no constraints, except the managerial constraints. You only have to imagine how it will be for a public undertaking to manage a chain of about 1,200 provision stores. That is the problem in expanding it further.

How much subsidy is involved in running the Supplyco outlets?

There is only a subsidy of Rs.50 crores and they function well with that. I think that is not a big price to pay if the State's interests are served, if it aids in controlling price rise. For the first time in the history of Kerala there is a negative gr owth in the cost of living index, as stated in the Economic Review.

Given the State's vulnerability to the Central government's policy changes, what is the solution to Kerala's food security problem, in the long term?

The solution is that the Central government should change its policy, or that there should be a government that will change this policy. We can try and raise the production and productivity of crops within the State, but there is only limited scope for this. Where is the land for paddy cultivation? There is a written assurance from Jawaharlal Nehru when he was Prime Minister that the Centre will look after the State's food needs; he gave this while asking Kerala to concentrate on growing the more remun erative cash crops. This was reiterated by Jagjivan Ram in Parliament. Unfortunately it is a Congress government that changed Nehru's policies and decided to take away food subsidy. The BJP government is trying to better the Congress record.