India can become the world’s granary amidst anti-China sentiment.

The one lesson India can learn from Beijing in the coronavirus epidemic is to reach out and create the right perception. Even as it has its back to the wall due to the deliberate hiding of the outbreak of coronavirus where it misled the entire world, China has been sending aid all over the world. India can take a cue and send food grains to most parts of the world where economic distress is bound to lead to shortages and hunger. India’s overflowing granaries and a heavily indebted Food Corporation of India both need an immediate solution. Sending food aid will also generate immense goodwill and diplomatic gains for New Delhi, especially in a post-Covid polarised world where anti-China sentiment is building.
While the government has decided to distribute extra food grains to the most vulnerable sections of society, there’s still plenty—in fact multiples of what India can consume. FCI chairman D.V. Prasad has said India will have enough food grain stockpiles to feed its poor for at least a year-and-a-half as food reserves are likely to further balloon after record harvests this year. Going by Prasad’s statement, back of the envelope calculation suggests India will have 100 million tonnes in warehouses across the country by the end of April or early May depending on fresh procurement by the government. Compare this with India’s annual requirement of 50 million to 60 million tonnes under various welfare programmes for the poor.
For long, FCI has been maintaining a stockpile that is way above the buffer norm requirement that’s been set for the corporation. While preserving food grains is itself a big task, the bigger and costlier provision is the rising cost of maintenance of such a huge stock. Higher inventory means higher storage and financing costs for the FCI which translates into higher food subsidy bill for the Centre.
And it’s not just storage capacity of FCI warehouses that is stretched, even the government’s fair price shops from where distribution to nearly 80 crore people takes place also don’t have additional storage. This means even in the midst of large scale loss of livelihoods and requirement of greater public safety net, unused food grains in FCI granaries cannot be released in single large installments.
According to official data, the government has a total of 58.49 million tonnes of food grains in the FCI godowns, of which rice is 30.97 million tonnes and wheat is 27.52 million tonnes. This is almost three times the required norm of maintaining a reserve of about 21 million tonnes as on 1 April. It is tragic that six months of food requirement cannot be given to vulnerable sections in a single tranche providing stability. It is important to build capacity not just for FCI, but also down the distribution chain.
By all indications from the harvest, it’s a bumper crop and in these times of distress, the government may even go in for hiking the MSP that is paid to farmers which will further raise India’s overall food subsidy. Export at even the most subsidised rates to food-deficient nations could partially offset the debts of FCI (at present over Rs 2.2 lakh crore).
The best option for the PM and his government would be to send this extra food grains as aid at extremely subsidised rates. In the past, New Delhi has sent food grains to Afghanistan on multiple occasions. We should now extend it to all food-deficient countries like Ghana, Nigeria, Cameroon, Mali and others.
This author is convinced WTO provisions that kick in for exports of subsidised agricultural products can be waived this year due to extreme volatility and uncertainty in the global economy, which will impact the poorest countries the most. In fact, India can proactively reach out to WTO for waiver of such conditions for a short period of six months. Such a move will create India’s position as the granary of the world and it could lead to larger shift in perception.
On the domestic front, the government should immediately revamp food stocking and public distribution. The current system of maintaining food grains is completely outdated and must be replaced with one that reduces the Corporation’s role to just maintaining a buffer that could be moved swiftly to address any shortage. The private trade should be allowed to handle the grain trade, physical distribution by the State being just one option to ensure availability of food at affordable prices.
It is only in extraordinary conditions that any government machinery is forced to reform and that is an opportunity has presented itself for India’s Food Ministry. PM Modi and his government have a chance to address hunger deaths—not just in India, but globally—and it must be seized.
Gaurie Dwivedi is a senior journalist covering economy, policy and politics.