The Hindu Business Line : Wheat worries

If the overall foodgrains situation in the country leaves a lot to be desired, the wheat scenario is turning increasingly murky and scary. The spectre of shortage and high prices has begun to haunt the market. It is a sad commentary on the policies and programmes of successive governments that wheat production has shown little growth the last six years. In two of the last six years, the output was less than 70 million tonnes and in the rest it averaged 72 million tonnes, leading to tightening of domestic supplies, depletion of public stocks and rising prices.

Whether the incipient yet unmistakable threat to food self-sufficiency is the result of the policymakers' incapacity or indifference is hard to tell; perhaps, it is a combination of both. Demand, on the other hand, is rising inexorably thanks to robust GDP growth, increased disposable incomes and a growing population. At the current rate of production and consumption, the country may well end-up a major importer in two or three years. As in most matters agricultural, the Government's response is both ad hoc and knee jerk. Announcement of a Rs 50 per quintal bonus to wheat growers is a clear admission of the desperation to `somehow manage' a decent wheat procurement by the Food Corporation of India. However, if spot and forward prices are any guide, procurement may well fall short of what is needed for public distribution and welfare programmes the next 12 months. Consumers, especially the vulnerable sections, are going to be the worst hit, even as the government has done little to curb speculation and free flow of speculative funds into wheat since last season. In a completely misplaced or perverted sense of priority, the Centre seems to believe that `volumes' in commodity exchanges are more important than protection of consumer interest. It is time New Delhi reviewed its priorities and declared whose interests it wants to advance — consumers' or speculators'.

The Minister for Agriculture has announced imports of 30 lakh tonnes this year (including five lakh tonnes in the pipeline already) to augment supplies and contain prices. By announcing it now, at the time of harvest, if he is hoping to `talk the market down' and facilitate additional procurement, he may be mistaken. While there is nothing wrong with imports, per se, if absolutely necessary, disturbing is the proposed routing of such large purchases through government agencies. Indeed, if imports of 25-30 lakh tonnes are seen as inevitable, they should be open to all, including the private sector, rather than be restricted to State enterprises whose functional transparency and efficiency are suspect. Importantly, people have the right to know why wheat production has stagnated for years and who should be held accountable.