By deregulation, we are copying the US’ failed post World War-II farm policy which led to the creation of agri-commodity giants
As agri-business celebrates the removal of pulses, oilseeds, cereals and so on from the purview of the Essential Commodities Act (ECA), Indian farmers and consumers don’t have reason to celebrate. The Government’s advisors, in an attempt to bring in more “agri-dollars”, may have misled the Narendra Modi Government by opening doors for cartelisation of these commodities, while at the same time dismantling the consumers’ and farmers’ only defence against monopoly. For evidence, we need to look no further than 2015. Modi 1.0 was completing one year in office as prices of pulses skyrocketed to over Rs 200 a kg. After the Income Tax Department investigated the matter, a Rs 2.5 lakh crore dal scam was unearthed. The I-T Department’s Appraisal Report in the Case of Pulse Importers and Traders Group said, “The abnormal price situation in India was created by a coordinated collusive activity orchestrated by a few trading and financial entities.” They found that “physical stocks of pulses (were) cornered in domestic and international markets. Significant long positions on the future were taken on exchanges to create an artificial scarcity at the wholesale and retail levels.”
International agri-business and grain traders had shrewdly circumvented the ECA by leveraging their overseas presence and created a monopoly by “procuring and hoarding stocks of pulses in national as well as overseas markets.” They manipulated domestic dal prices to plummet so that they gained maximum from the stocks bought at low prices. The super profit earned in this manner was not offered to tax and was siphoned off either abroad or converted into unaccounted cash through entry operators. It was then that the Government, using the ECA, raided and seized over 70,000 metric tonnes (MT) of pulses from hoarders and traders and broke the cartel. The entire supply chain was complicit in the scam and in fact the IT Department investigated the National Commodity and Derivatives Exchange (NCDEX) too, for its role in aiding this crisis. It turned out that the feat was jointly managed by the international agri-business, local suppliers/traders and agri-commodity brokers at the NCDEX.
Now, the Government’s advisors have removed all barriers to stocking limits. The people responsible for the dal scam can now legally operate and even be absolved of their past crimes.
A curious case: Cotton is not only a fibrous cash crop for Indian farmers but is also an oilseed. Many experts have raised bio-safety concerns on GMO Bt cottonseed being blended freely into our edible oils. Nevertheless, the demand for cottonseed oil is ever-growing. Much like pulses, oilseeds were removed from the ECA, too. There are unconfirmed reports of cottonseed being removed from the ECA as it is also an oilseed. Interestingly enough, the Modi Government has had a taste of Bt Cotton monopoly, where it used ECA to prevent unfair business practices and control prices of cottonseed in 2015. This was done because illegal trait value was being charged.
To the rescue: The ECA had repeatedly come to the aid of the Indian Government, legal traders, farmers and consumers. Of late, it helped break the cotton seed and dal cartels. However, the safeguard measures of emergency control laid out by the Government in the Ordinance for protecting different stakeholders is not strong enough. The Government must keep all seeds for sowing under the purview of the ECA and add clauses to strengthen this law. India’s cotton farmers are already highly indebted and 84 per cent of farmers’ suicides are reported from the cotton-farming belts. No illegal trait fees and royalties should be charged and cotton seed should remain under the ECA.
Don’t ape the US: The Government needs to study the dal scam and the IT Department’s findings. We need to bring pulses and oilseeds back under the ECA. By deregulation, we are blindly copying the US’ post World War-II farm policy, which has failed for US farmers and led to the creation of agri-commodity giants. The liberalisation of farm-gate has destroyed farmers not just in the US, but in Mexico, Brazil and elsewhere, too. Indian farmers will be the biggest losers and consumers won’t be far behind either. Consumers will gradually feel the burn of such deregulation, too. The Centre must tread carefully. Before dismantling the ECA, the Government must revisit the dark history of the East India Company, which was the world’s first agri-business trans-national corporation.
(Writer: Indra Shekhar Singh; Courtesy: The Pioneer)
The Government’s ‘vocal for local’ call is fine to make India self-reliant but why take it out on alcohol?
There has been a lot of debate surrounding that golden elixir that we call whisky. Some of it relates to the way the Americans spell the word — with an “e” — others wonder whether whisky should be made with malted barley or with grain or even molasses, the last being the way it is made in India. But one thing is certain: Scotch whisky is produced north of Hadrian’s wall in the country of Scotland. As any whisky connoisseur will tell you, while some others get it right occasionally, the Scots do it right almost all the time. Scotch whisky is, therefore, a go-to drink. Certain brands like Chivas Regal and Johnnie Walker have become popular not just because of the massive marketing campaign but also due to their consistent high quality. Little wonder then that Scotch Whisky has a “geographic indicator” tag.
However, it’s not just about Scotch whisky but more about how the Central Defence Stores (CDS) are gradually withdrawing orders from some larger brands. Is it because Indian brands have to be promoted at these stores where serving and retired military and defence personnel buy everything, from household goods to motorcars? Some suspect this to be the case. However, it is also likely that this is being done to prevent the inevitable leakage of a certain amount of such top-end spirits into a lucrative black market. Prices at CDS canteens attract less excise. They can often be considerably lower than market prices with some States offering an arbitrage opportunity to some individuals. One is not saying that there are many rotten apples but the easy availability of spirits and wines from CDS canteens has been an open secret for some time in certain cities. To be fair, the authorities have cracked down even on the eligibilities of those who can access the CDS. It could also be that an argument was made against subsidising luxury spirits from such stores. Such an argument will be a lot more palatable than the “vocal for local” argument as frankly, most Indian whiskies are bottom shelf, with some notable exceptions of late. If one can afford to buy luxury whiskies, they can afford to pay the full price, including the duties on those products.
Karnataka ruling on different GST slabs for common Indian flatbreads sparks a row over honouring regional choices
If the pandemic has not yet taught you the art of kneading dough, the tax authorities surely seem to be hell-bent on making you atmanirbhar. If your life still depends on ready-to-eat foods, particularly rotis and parathas, then prepare to shell out more money from your pocket or start upgrading your culinary skills. Geniuses at the Karnataka bench of the Authority for Advance Rulings (AAR) have classified the food system by categorically making the distinction between roti and parota/parotha/parontha/paratha/parantha or whatever one may call it, just so that both forms of the Indian flatbread can be taxed differently. Rotis, which can be had immediately on opening the pouch, will have five per cent GST while parathas, which need to be heated before consumption, will attract 18 per cent. But the ridiculousness of the logic doesn’t sit with the AAR, which believes that roti is an “essential” food item and, thus, would invite lower GST, while parathas are a “luxury.” The latter, it argues, has a different taste and methodology of preparation. Since when has the cooking method dictated food grades?
Going by such nitpicking logic, netizens had a field day comparing other Indian essential foods and their GST. While some wondered what would happen to the kulcha and butter naan, others debated if a further classification between vanilla and chocolate ice cream, too, was on the cards. But on a more serious note, should such definitions be left to the judgements of bureaucrats and policy makers? India’s cuisine map is more diverse than its people and it is difficult to quantify a uniform staple. Besides, food is the only democracy that works in our country. A roti, the soft and bouncy version, may be essential in some households in north India but parotta, for example, is de rigueur on the Malabar coast, where people prefer it flaky, layered and crisp. Why then not consider the layered khakra, the famous Gujarati snack, as a luxury? There can be no debate on the oil content of both as that can be regulated by the user, depending on his/her choice. So while up north, the roti without a swirl of ghee defeats its healthy nature, down south they may have a layered paratha in almost negligible oil. What then about a stuffed parotta? Would one stuffed with cottage cheese (dairy) be costlier than the one stuffed with potatoes (vegetable)? There cannot be a national diet for reference and GST should be decided on the quantity of ingredients and not whether one is soft and the other toasty. Besides, roti should be taken as a larger generic name for all types of Indian flatbreads. Further, with different slabs in the same categories of food items, it would be difficult to calculate the GST amount on a bill. More complicated than rolling out the perfect round flatbread.
(Courtesy: The Pioneer)
The Centre’s decision to ban 27 commonly-used pesticides in all three main categories, namely insecticides, fungicides and weedicides, is a move in the right direction
The decision of the Centre to ban 27 commonly-used pesticides in all three main categories, viz. insecticides, fungicides and weedicides, in India has led to consternation among various stakeholders, particularly a certain section of the industry. To understand the issue and its implications, let us put a few facts in order. The manufacturing, import, sale, distribution and use of pesticides are regulated under the Insecticides Act (1968) with a view to prevent risk to human beings or animals and for matters connected therewith. The Registration Committee (RC) — set up under the Act — registers every pesticide after scrutinising the formula, verifying claims of efficacy and safety to human beings and animals and specifying the precautions against poisoning and any other functions. The RC is empowered to refuse registration of any pesticide if issues pertaining to safety have not been satisfactorily adhered to.
From time to time, the Ministry of Agriculture and Farmers’ Welfare (MoA&FW) — the nodal Ministry for regulation of pesticides — orders review of the registered pesticides with particular reference to the risk these pose to human beings, animals and the environment. Based on examination by a committee of experts, it arrives at an appropriate decision on “whether to allow their continued usage (with additional precautions, if any) or prohibit their use completely.”
In 2013, an expert committee was set up to study the continued use or otherwise of a total of 66 pesticides, which are banned in two or more other countries, but continue to be registered for use in India. Based on its recommendations (the committee submitted its report on December 9, 2015), the Government banned 18 pesticides in 2018. However, it allowed continued usage of the 27 pesticides, to be reviewed after completion of recommended studies.
In a gazette notification issued on May 14, the MoA&FW issued a draft order intended to ban the manufacture, usage and storage of these 27 pesticides and sought comments or suggestions from stakeholders over 45 days. The notification says: “Sixty-six insecticides, which are banned or restricted or withdrawn in other countries but continue to be registered for domestic use in India, were reviewed by an expert committee set up by the MoA&FW. The Ministry considered recommendations of this committee and recognised that use of 27 insecticides is likely to involve risk to human beings and animals as to render it expedient or necessary to take immediate action. The pesticides to be banned include 2,4-D, acephate, atrazine, benfuracarb, butachlor, captan, carbendazin, carbofuran, chlorpyriphos, deltamethrin, dicofol, dimethoate, dinocap, diuron, malathion, mancozeb, methimyl, monocrotophos, oxyfluorfen, pendimethalin, quninalphos, sulfosulfuron, thiodicarb, thiophante methyl, thiram, zineb and ziram.”
The committee has found some of the above pesticides to be highly hazardous with potential to cause severe health effects viz. hormonal changes, neuro-toxic effects, reproductive and developmental health effects, carcinogenic effects as well as environmental impacts such as toxicity for bees. For others, adequate data needed for regulatory purpose are not available. While, arriving at the decision, the Government has also been guided by the fact that “newer” and “safer” alternatives are available for all the pesticides it intends to ban. The generic industry (a euphemism to describe manufacturers other than firms who are innovators) has taken umbrage to the ban, citing that this will chop off domestic sales — currently about Rs 20,000 crore — by about 20 per cent. The export of pesticides will also take a hit of around 10 per cent on the existing Rs 20,000 crore.
The manufacturers argue that farmers have been using these chemicals for a long time and have found them to be economical even as the alternatives are expensive and will lead to increase in the cost of cultivation. They have also questioned the timing of the decision. They argue that farmers have to put up with frequent locust attacks, especially of late, that have gripped agriculture in several States like Rajasthan, Punjab, Haryana, Madhya Pradesh and Maharashtra. Growers urgently need relevant pesticides like malathion whose supplies could be affected by the ban.
The arguments advanced by the industry are untenable. First, it is not as if this has come as a bolt from the blue. The Government has taken the decision only after a thorough examination and evaluation of their safety in the light of available evidence — a process that continued for seven years.
This process also involved consultations with manufacturers of the pesticides. They got full opportunity to present their case before the expert committee, including submission of studies to demonstrate their continued safety and efficacy. If they believe that these pesticides have caused no harm to humans, animals or the environment, they could have presented requisite data to substantiate their contention. But that was never done.
Now, 15 of the 27 pesticides that are proposed to be banned are considered “deemed to be registered pesticides” in the country owing to data lacunae since several years. It shows that from day one, firms who applied and got registration could not convincingly demonstrate their safety and efficacy to the regulator (courtesy, void in data). This has not been done till date which eventually drove the Centre to banning them.
Second, developments in various States (they are expected to ensure compliance with regulations on ground zero) signalled that the ban was in the making. In 2011, Kerala had banned monocrotophos, carbofuran and atrazine on grounds of public health concerns. In 2017, Maharashtra banned monocrotohos and acephate due to high incidence pesticides poisoning among cotton farmers. In 2018, Punjab said “no” to fresh licences for 2,4-D, benfuracarb, dicofol, methimyl and monocrotophos citing harm to humans and the environment.
Third, when it comes to a decision on pesticides which are hazardous, the only criteria the regulator relies on is “safety” and “efficacy.” It also sees whether newer and safer alternatives are available. The decision can’t be guided by any other consideration such as cost. Merely because an existing product costs less can’t justify its continued use even if it is found to be unsafe. By the same logic, a new and safer product can’t be debunked — simply because it costs more.
Without compromising on safety, even if one were to consider the economics of use, we need to make comparison on like-for-like basis. Here, one should not be looking only at the price but also the dose; in addition, the impact on crop yield and crop quality has also to be considered. Let us illustrate with an example.
One kilo of Acephate (this is on the list of pesticides proposed to be banned) — used for controlling cotton pests —costs around Rs 550 per kg against an alternative say, Imidacloprid, a newer and safer molecule which is priced at Rs 1,200 per litre. As regards dose, whereas 300 gm of Acephate is required to control pests over an acre, in the case of Imidacloprid, the requirement is less than 100 ml per acre.
The effective cost per acre for the latter thus works out to be Rs 120 against Rs 165 for the former. Higher crop yield and better crop quality with Imidacloprid serve as icing on the cake.
Fourth, an argument that banning will result in non-availability and affect farming operations is fallacious. The phase-out of any product takes prospective effect. In the instant case, taking 45 days for comments from stakeholders (from the date of notification i.e. May 14, 2020), the earliest the order can be enforced is July 1. That apart, normally the Government allows manufacturers to clear their supplies in the pipeline which are attuned to meet the demand.
To combat the locust attack, the very fact that the Agriculture Ministry itself is procuring malathion from none other than domestic manufacturers shows that the supply of even this pesticide (proposed to be banned) won’t be a constraint for now.
Alternative safer products are available in the market which will ensure that farmers don’t suffer. Finally, the 27 pesticides in the proposed ban list are less than 10 per cent of the current 289 pesticides registered for use in India. Hence, banning these 27 is unlikely to have any adverse impact on agriculture production and India’s food security, all the more when newer and safer alternatives are available for all of them — as brought out in a comprehensive assessment by the expert committee.
Looking at all critical factors viz. safety, efficacy, availability, cost-benefit and so on, the Government’s decision to ban 27 pesticides is apt. It will help in promoting use of newer, safer and environment-friendly crop protection solutions. It will drive companies to focus more on research and development and innovation to meet diverse needs of farmers, thereby helping them in boosting agricultural production and increasing their income.
(Writer: Uttam Gupta; Courtesy: The Pioneer)
Locusts can destroy standing crops and devastate livelihoods of people in the agricultural supply chain within days
It never rains but it pours. Even as India is desperately battling the combined impact of the Coronavirus, the Amphan cyclone and an economic emergency at one go, we have been “swarmed” by more misfortune. Sixteen districts of Rajasthan, 17 of Uttar Pradesh and the Nimar-Malwa region of Madhya Pradesh have reported one of the worst locust attacks in two decades. There are fears that India’s farm crisis could deepen further as the swarms, that can travel up to 130 km in one day, could head to Gujarat, Punjab, Haryana and Delhi, devouring everything in their wake. This is the second wave of the dreaded pests to hit the country in less than three months as the first one, which devastated crops worth crores, hit India in December-February. Locusts pose a major threat to a country’s food security as one swarm, which contains about 40 million insects, can devour the same amount of food in one day that 35,000 people, 20 camels or six elephants eat in 24 hours! Hence, locusts can destroy standing crops and devastate livelihoods of people in the agricultural supply chain within days, making them one of the most dreaded enemies of farmers. And coming at a time when an already beleaguered farm sector is trying to cope with the impact of the Corona lockdown and an exodus of labour, this will be the proverbial last straw. To put things in perspective, if the current swarms are not controlled, the standing crops of pulses worth around Rs 8,000 crore in Madhya Pradesh could be destroyed and so could the crops of cotton, chilli, fruits and vegetables in the heartland States.
India is not new to locust attacks but what is new is the shift in their swarming pattern. Earlier they used to leave by November but this time, in the first wave of the attack, the swarms stayed on till February. Scientists are attributing this aberration to climate change. Last year, the monsoon started six weeks ahead of time in western India and lasted till November instead of the usual September/October, creating perfect breeding conditions. In the current scenario, too, climate change-induced unseasonal rain or frequent cyclones are being considered the main reasons for the infestations. The pests have attacked 60 countries in two major continents, comprising an area of 30 million sq km. This aerial invasion highlights the urgent need for global cooperation and evolving cross-border templates to deal with environment-related challenges.
(Courtesy: The Pioneer)
Since the subsidy given to rice farmers has exceeded 10 per cent, India has violated its WTO commitment and invoked the ‘peace clause.’ But how much immunity will this give to it?
In a notification submitted to the World Trade Organisation (WTO) — the multilateral body which binds member countries to a common set of rules with regard to trade in goods and services with “fairness” and “non-discrimination” as its underlying principles — India has informed that the value of its rice production during 2018-19 marketing year was $43.67 billion and for that, it provided subsidies worth $5 billion. This works out to 11.4 per cent of the value of rice production.
Under the Agreement on Agriculture (AoA) of the WTO, a developing country cannot give aggregate measurement support (AMS) — an acronym for subsidies in WTO parlance — in excess of 10 per cent of the value of its agricultural production. The AMS includes “product-specific” subsidies and “non-product specific” viz. subsidies on agricultural inputs like fertilisers, seed, irrigation and power.
The “product-specific” subsidy is excess of the Minimum Support Price (MSP) paid to farmers over the External Reference Price (ERP) multiplied by the quantum of agri-produce. Whereas the MSP is taken for that very year, say, 2018-19, the ERP is the average of the international price prevailing during 1986-88 fixed in rupee terms. The “non-product specific” subsidies are money spent by the Government on schemes to supply agricultural inputs at subsidised rates. Compliance has to be ensured both for individual crop as well as at the aggregate level. For instance, the subsidy on rice should remain below 10 per cent of its production value. Besides, the sum total of subsidy on all crops, say rice, wheat and coarse cereals should not exceed 10 per cent of agri-production value. This rules out a scenario whereby a country gives more on one crop, say 15 per cent on rice, and yet keeps aggregate subsidy within the 10 per cent threshold by giving less on another crop.
Since, the subsidy given to rice farmers in 2018-19 at 11.4 per cent of production value exceeded 10 per cent, India has violated its commitment under the WTO. The breach is open to challenge by other members. However, it has invoked the “peace clause” to seek immunity from action. The Indian request will come up for consideration in the WTO Committee on Agriculture (CoA).
So, what is the “peace clause”? Does it provide an effective shield? Will the CoA allow its benefit? Can India explore other options?
India runs a mammoth programme of Public Stockholding for Food Security Purposes. Under it, agencies of the Government viz. Food Corporation of India (FCI) and so on, buy agri-produce from the farmers at MSP (notified by the union) and distribute through a network of fair price shops to meet the food security needs of India’s poor and vulnerable population at affordable price. Since, MSP is higher than ERP, the excess is deemed as subsidy.
Developing countries, with India leading from the front, have consistently argued at the WTO that since the Public Stockholding is intended to serve the food security objective and does not cause any distortion in international trade, subsidies given under this programme should be exempt from commitment under the AoA. The ninth WTO ministerial in Bali (2013) agreed to a “peace clause” under which “if a developing country gives AMS in excess of 10 per cent, no member will challenge this until 2017 when WTO would look for a permanent solution to address their food security concerns”.
The peace clause came with a plethora of conditions viz., submission of data on food procurement, stockholding, distribution and subsidies (including their computation) and do on. These also included establishing that subsidies are not “trade distorting.” Moreover, it intended to cover only the schemes existing at the time of the Bali declaration.
The peace clause was intended to be a “stop gap” arrangement that should have ended in 2017 by which time, a permanent solution should have been in place. But that was not to be. In December, 2014, the WTO-General Council (GC) approved “extension of the peace clause till a permanent solution was found.” This meant indefinite deferment of the permanent solution and perpetual dependence of developing countries on the “peace clause.” In the WTO-GC meeting in Geneva on July 31, 2014, India had insisted on a time-bound action plan to find a permanent solution, to be executed before the end of 2014 co-terminus with approval of the Trade Facilitation Agreement (TFA) — an area of great importance to developed countries. In December, 2014 GC even as the latter got away with the TFA, the former was merely handed out a “peace clause” and that, too, with a plethora of riders.
That the permanent solution route was more or less closed, it was also evident from the 10th ministerial in Nairobi (December, 2015) when it decided that “negotiations on the subject shall be held in the CoA, which will be distinct from the ongoing agriculture negotiations under the Doha Development Round (DDR).” The mandate of CoA normally being routine matters, it was naive to expect from it a far-reaching policy decision. In the 11th WTO — ministerial held in Buenos Aires (December 2017), the DDR was dumped.
Coming to India’s request seeking refuge under the peace clause against breach of subsidy ceiling, now the CoA will examine it in the light of conditions appended to it. Considering that the US has been lambasting India for alleged under-reporting of its subsidies, it is unlikely to be a smooth sail.
In a notification to the WTO in March, 2018, India had reported AMS of about Rs 12,000 crore on rice or 5.45 per cent of production value during 2013-14, whereas, on wheat, AMS was Rs 5,000 crore or 3.53 per cent of production value. In a counter-claim made to the CoA (May, 2018), the US stated that during 2013-14, Indian AMS on rice was Rs 1,78,000 crore, or 77 per cent of production value and on wheat, it was Rs 96,500 crore, or 65.3 per cent of production value. The gap is due to vastly different methodologies used by India and the US.
For arriving at AMS, India rightly compares MRP with ERP of the same year; considers quantities procured for public stock holding; excludes price support provided to resource poor farmers who produce food mostly for self-consumption. On the other hand, the US uses ERP of over three decades back; considers even quantities not procured by agencies and ignores exemption to resource-poor farmers. There are inherent flaws in the US calculation. Relating the current MSP to international price prevailing in 1986-88 is not only illogical but is outright absurd; it inevitably results in “artificially” inflated subsidy. The benefit of MSP is not available to quantities not procured from farmers; yet the US has included these in its calculations.
The resource-poor farmers produce food for their own consumption; hence, there is no question of subsidy given to them distorting trade. Yet, the US has not excluded subsidy support to them from the calculation.
In the CoA, the US is bound to stick to its calculation and on that basis argue that the 11.4 per cent reported by India for 2018-19 (in case of rice) is a gross under-statement. The Government should pull out all stops to counter the American claim. It needs to go a step forward to even challenge the formula that got embedded in the AoA (ERP frozen at 1986-88 level was part of the agreement).
Correcting the anomalies in the methodology of calculating AMS should be at the core of finding a permanent solution; that process should be resurrected and taken to its logical end. Post-correction, the subsidy figures will automatically come to much less than 10 per cent (as in 2013-14) or marginally higher (as in 2018-19). Small variations are more likely to be condoned and even if retaliatory action is sanctioned, that will entail much less pain. In any case, this would be far better than letting anomalies continue leading to inflated subsidy and need to take refuge under an unreliable peace clause.
India also needs to mount a sustained diplomatic offensive to counter US efforts at the WTO to do away with the extant Special and Differential Treatment (S&DT) available to developing members which enable less than reciprocal commitments such as 10 per cent threshold for agri-subsidies (for developed countries, the threshold is five per cent). If, S&DT goes, India will have to limit its subsidies to less than five per cent. Meanwhile, the Government should take up restructuring its subsisting subsidy regime. Instead of subsidising agri-inputs and MSP to farmers which are treated as “actionable” subsidies, it should consider direct cash transfers to farmers similar to developed countries of US and EU. While, ensuring compliance with WTO rules, this will also help in eliminating inefficiencies and misuse that are germane to present subsidy and price support regime. A collateral gain will be by way of pruning payments and helping fiscal discipline.
(Writer: Uttam Gupta; Courtesy: The Pioneer)
The 80 crore people the Govt currently targets for giving subsidised foodgrain under the Food Security Act includes millions of higher-income beneficiaries who don’t deserve it
The Finance Minister, Ms Nirmala Sitharaman, announced a Rs 1,70,000 crore package under the PM-Gareeb Kalyan Scheme (PMGKS) to address the plight of tens of millions of workers in the “informal” sector affected by CoviD-19, on March 26. The most crucial component of this package was giving five kg of rice/wheat per person per month for “free” to around 80 crore people through the public distribution system (PDS), plus one kg of preferred and region-specific choice of pulse per household for three months. To understand the full implications of the relief — estimated to cost about Rs 40,000 crore — let us capture the basics of the food security system in India. Under the National Food Security Act (NFSA), 2013, a quota of five kg of cereals per person per month is made available at a subsidised price of Rs 3 per kg rice, Rs 2 per kg wheat and Rs 1 per kg coarse cereals to 67 per cent of India’s population or over 80 crore people. It is a matter of shame that even decades after Independence, when the NFSA was enacted, our rulers still felt that more than 80 crore people were so poor that they needed to be given food at a throwaway price. The belief as embedded in this law (in fact, the prices were mentioned in the Act and were to remain valid for a period of three years from the date of its commencement) also mocks at the official claim that India has achieved big success in bringing a large number of people above the poverty line; that the number of poor people is just about 25 per cent of the population
Be that as it may, the Government continues to believe that the interest of the poor can be fully safeguarded by not allowing any increase in the price. This is abundantly clear from a statement by Union Minister for Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan in 2017 that, “The Government will not affect any increase in issue prices for foodgrains under the NFSA.” This was made at a time when even the Act didn’t prevent a hike. True to that commitment, till date, the price remains unchanged. But has this safeguarded the poor? The answer lies in taking cognisance of a vital fact which often gets ignored.
The supplies under NFSA barely cover 50 per cent of a person’s requirement which is 10 kg per month, as estimated by the National Sample Survey Organisation (NSSO). This forces him/her to buy the balance quantity from the market at a much higher price. Being linked to the cost of procurement, handling and distribution (in case of rice, at least Rs 35 per kg), the market price is more than 10 times the subsidised price.
As a consequence, whatever benefit the Government gives by keeping the price low on sale of certain quantity, that is more than offset by their having to pay many times more on purchase of the balance five kg from the market. Thus, for buying 10 kg — being his/her requirement for a month — they have to spend a total of Rs 190. The effective price paid by him/her is Rs 19 per kg instead of Rs 3 per kg — a sense one gets by a plain reading of the NFSA. The underprivileged are also getting hit in another way.
All along, the Government has taken recourse to increasing the Minimum Support Price (MSP). While this is meant to incentivise farmers produce more, this leads to a collateral damage. The increase in MSP leads to increase in the cost of supplying food, which triggers a hike in the market price, implying that the poor will need to spend more on the quantity bought from the market. The decision of the Government to give five kg of rice/wheat per person per month to 80 crore people for “free” over and above the five kg they are already getting under the NFSA can help remove this anomaly. Having got all of 10 kg at an effective price of Rs 1.5 per kg, s/he need not buy any from the market. But this is a mere coincidence (an offshoot of the Corona-crisis); it was never intended as a conscious policy move. In any case, the additional five kg for free is available for three months only. Thereafter, it will be back to square one.
Can the Government consider giving 10 kg per person per month at the subsidised price of Rs 1/2/3 per kg? In case it is given to all the 80 crore people, this will be at a huge cost, as then the food subsidy (excess of the cost of supply over the issue price multiplied by total quantum of sale under the NFSA) will increase sharply from an already whopping Rs 2,19,000 crore during 2019-20 to Rs 2,53,000 crore expected during 2020-21. This is unconscionable.
How can the food requirement of the needy be met in full without entailing additional burden on the exchequer? How can the two objectives be reconciled? What is the way forward?
To get there, we need to recognise that the 80 crore people — the Government currently targets for giving subsidised foodgrain under the NFSA — includes millions of higher-income beneficiaries who don’t deserve it. This was duly accepted in early 2015, when a committee headed by Shanta Kumar, senior BJP leader, recommended a reduction in coverage under the NFSA from the existing 67 per cent to 40 per cent, restricting the eligibility of subsidised food at Rs 1/2/3 per kg only to the poorest of the poor under the Antyodaya Anna Yojna (AAY), plus increasing their entitlement from five kg to seven kg per month and making the rest pay 50 per cent of the MSP paid to farmers. Reduction in coverage by 27 per cent can remove 35 crore people from the scheme. That will release 175 crore kg per month, which can be used to give an additional five kg per month to those under the AAY. The number of families under the AAY being 2.5 crore or 12.5 crore people (five per family), five kg extra for each will consume 62.5 crore kg per month. Even after this, there will be a monthly surplus of 112.5 crore kg or 1.125 million tonnes. In other words, the Government need not undertake distribution of 13.5 million tonnes of grain annually, which will result in corresponding saving in subsidy or Rs 43,000 crore annually.
Likewise, an increase in issue price to beneficiaries, other than those under the AAY or 32.5 crore from the existing Rs 3 per kg to 50 per cent of the MSP paid to farmers or Rs 14 per kg rice, can help reduce subsidy. The savings will be about Rs 1,800 crore per month or Rs 21,600 crore per annum.
Yet, the Government has not acted upon the recommendations of the panel. Meanwhile, the country continues to be saddled with millions of under-fed poor; unsustainable high subsidy; inefficiency in handling and distribution by State agencies; misuse of subsidy and subsidised food being cornered by millions of undeserving people.
These maladies are germane to the existing dispensation of controls on almost every aspect of the food supply chain. When subsidised food is available at a fraction of the market price, there is huge incentive for dubious operators to siphon off. When handling and distribution cost (besides MSP paid to farmers) is reimbursed to agencies on “actual” as food subsidy, inefficiency and inflated cost claims (including bogus) are inevitable. When millions of the rich/better-off are also made beneficiaries under the NFSA, subsidy is bound to balloon.
The implementation of the committee’s package could have made some headway in addressing these maladies but still it would be far from eliminating them as it does not alter the fundamentals of the existing dispensation.
To achieve drastic outcome in terms of higher efficiency and lower cost in handling operations, prevention of misuse and saving in subsidy, there is an urgent need to remove all controls, allow participation of private entities in procurement and distribution and make way for competitive markets. The subsidy should be restricted only to the poor (about 25 per cent of the population) and given directly to the beneficiaries using the Direct Benefit Transfer (DBT) mechanism.
Will the Corona crisis wake the political class from its deep slumber into implementing this reform? Only time will tell.
(Writer: Uttam Gupta; Courtesy: The Pioneer)
While we have enough stocks, the supply chain breakdowns and curfew protocols to choke the virus point to a crisis
The country may have sufficient foodgrain stocks in Central and State warehouses as reserves to tide out an emergency but the breakage of supply chain management due to the lockdown has also meant that they are not reaching beneficiaries. The Government claims that we have nearly 10 times the emergency reserve needed for this time of the year and the fair price shops can go on an overdrive to meet our nutritional requirements. But these are just dry rations, such as rice, wheat, sugar and pulses. Farm supplies have been badly hit because of sudden closure. Even if there are vegetables waiting to be loaded, varying curfew protocols by different States and the still patchy system of curfew passes for truckers mean that there is no movement. Police harassment has only complicated transit. States like Karnataka, Kerala, Telangana, Delhi, Maharashtra and West Bengal have issued curfew passes promptly and set up police task forces to facilitate smooth movement. But virus hotspot States like Punjab, Madhya Pradesh, Gujarat and Rajasthan have totally closed their borders and even sealed their drop point depots. Although the Government is contemplating a staggered release from lockdown, mainly to ensure the April harvest from the fields, the exodus of daily labourers has meant that there are far fewer hands available to manage field work. There are also reports of truck drivers joining the migrants. The second biggest bottleneck is of manufactured, processed and packaged food items. With consumers hoarding anything with a shelf life, the sudden gush of demand, the flight of labour at units rolling them out and the supply chain gaps have meant that our breakfast platters are beginning to look different. Fast-moving consumer good (FMCG) companies are already registering an upswing in demand from urban centres, indicating the hoarding spiral. The retail network has completely collapsed, its earnings now down to 15 per cent. A longer lockdown would mean that sector players would have to shut down and let go off their staff by June. It is, of course, the neighbourhood stores and grocers, who are back in business, having just enough capacity to serve their ecosystem and, therefore, able to smoothen some shocks given their scale. The online delivery platforms have already collapsed with the supply chain breakdown, running out of stocks, delaying deliveries and some of them not signing up new customers at all. The less said about the poultry sector the better; eggs are still available though chicken and meat are mostly off the shelves because of the zoonotic virus. Even dairy products could be affected as a report said that the Aarey dairy has just enough fodder for the cattle to last a week or so.
In the end, what is needed is enabling bulk supplies and that, too, at a time of isolation protocols that demand there is no over-crowding at procurement sites. Most agricultural produce market committees, where every business sources supplies, have been shut for a while. Some of them have negotiated limited trading hours to minimise numbers. Respecting protocol and enforcing it with precision is a big challenge as is the enormous time lag. Besides, it is the high heat of summer and perishables, without fast movement, run the real risk of being wasted. At least for a month or so, a risk-free procurement will have to be evolved in consultation with Central and State representatives. If the situation prolongs, then the Government may have to look for other alternatives. For example, the Food Corporation of India has both operational and food security stocks. At a stretch, the Centre can offer them to States and then perhaps to select retail chains should the market so demand. Wheat and rice godowns are already overflowing but the holding capacity of fair price shops will have to be ramped up. Of course, we will also have to deal with the possibility of reduced food imports what with export restrictions in place. And while we might be able to ensure emergency food needs of vulnerable populations, pricing interventions just might be required. As for civil society, it can be incentivised to donate to food banks, the amount exempted from taxes, for the vast numbers of homeless and jobless. Saving lives is not just about treating the infected but nurturing a whole nation back to life from a calamitous disruption that had neither been foreseen nor imagined. Call it social welfarism but innovation and enterprise can only come when a nation is well-fed.
(Courtesy: The Pioneer)
Jayesh Pawar embarks on a journey that takes him through a world menu
Of late, Aerocity has evolved as Delhi’s favourite party spot, which perfectly caters to those who are looking for a place to simmer down over weekends. An entrant which has been making waves, stiffening up the competition further is The Imperfecto Shor Café at Hotel Pride Plaza. The place promises to transport you back to the Renaissance era. Designed by Nuria Rodriguez Parra, the decor of the Goth-inspired café borrows heavily from the Romanesque architecture from 17th to 18th century. Brick walls, broken windows, vintage portraits, hand-made, rustic chandeliers and large castle doors, this place is delightfully nostalgic, yet has a new-age vibe. Finally, the industrial detailing and warm hand-made lights impart the café a distinctive character. There is no dearth of theme-based cafés in the city but Shor’s attention to detail is certainly creating some shor (noise) among the guests.
The carefully-curated menu by chef Akansha Dean took us on a journey through Europe, America, Asia and even India, giving heart-felt comfort food. What caught my attention were the names of dishes which were inspired by 18th century iconic poets, rulers and famous scandals.
To beat the heat, I began my meal with Helen Charlotte’s Heavenly Spirit, a watermelon salad. Served in a bowl made of engraved marble, the presentation of the salad was appealing as the brightness of the watermelon was in stark contrast with the background. Though the Greek combination of watermelon and feta was classic, where the tanginess of the cheese was balanced by the sweetness of the fruit, it was the raspberry dressing that gave it a tarty twist. The perfect fruit-cheese-arugula combination whetted my appetite for more.
Next up was the Royal portal, which were classic Spanish croquetas with chicken filling. Served in a round white plate with onion dip, the presentation was dim but the first bite was enough to reveal that they were cooked to perfection. While the roll was crisp on the outside, the filling of chicken was soft and creamy. The marination of the chicken was well-done as it imparted the flesh a creamy texture, with a bit of tanginess.
Having dug deep into the Mediterranean fare, I travelled all the way to Asia in a matter of minutes. Since the place has an eclectic range of vegetarian and non-vegetarian sushi, I decided to order a spicy salmon roll. The dish arrived on a black rectangular tray, perfectly showcasing the vibrant colours of the different elements. The portion size was more than adequate as eight pieces were served in a single portion. I loved the meticulous preparation that went into each layer. The cucumber and onion bits topping added crunch to each bite. I devoured the dish as it was like an explosion of multiple flavours in my mouth.
I ordered Aamchi Aam, the bartender’s recommendation. The drink scored high on presentation as it was served in a bronze glass, resonating with the café’s theme. The drink was a joyful mix of aam panna, litchi juice, served with a pinch of kaffir lime. The almond pistachio mango ice-cream floating on the drink was like cherry on the cake. The tanginess of the panna and the sweetness of litchi juice created a perfect balance where neither of the two strong flavours overpowered the other.
Moving to the main course, I stuck to my Indian roots and ordered Dal-e-shor and Shor’s royal murg makhani, the restaurant’s version of classic North Indian butter chicken. There was butter naan to accompany. Served in identical golden bowls, the dish’s flavours remained true to the original. The taste reminded me of a typical Punjabi dhaba, a rarity in cafés.
Finally, it was time for desserts. On the chef’s recommendation, I ordered the Quinoa fruits pudding. To give the dessert an Indian touch, the high protein quinoa was cooked like a kheer which was topped with seasonal fruits like mango, apple and melons. The flavours of the fruits imparted the quinoa a mild sweet taste. Indeed, the dessert was a refreshing and fruity ending to my meal.
While the food scored full marks on its satiety value, we loved the service. The staff was professional and well-trained. And this courteous behaviour was not confined to the serving staff. Every now and then Chef Akansha took time off from the kitchen to interact with guests in order to make them more comfortable and find out their preferences. So let us create some shor.
Writer : Jayesh Pawar
Courtesy: The Pioneer
India Grill at Hilton Garden Inn, presents ‘create your own four-course meal’ from appetiser to desserts. The lunch includes live cooking stations, freshly-made items and a dessert selection. Parmesan and Parsley-crusted fish finger, Paneer butter masala and for those with a sweet tooth, there is the New York cheese cake, among others. Time: 12 pm to 3 pm Price: Rs 666 plus taxes Date: Till May 15 Venue: Hilton Garden Inn, Saket.
Presenting an affair with Dimsums, Pra Pra Prank, Cyber Hub, offers the Ruby dimsum with savoury crumble, vegetable dumpling with ginger soy broth and the Spinach and pok choy dumpling with pine nuts for a tasteful vegetarian-friendly meal. Binge on chicken chilli oil sticker with Shanghai dip, prawns with fermented chilli and many more. Time: 12 pm to 12 am Price: Rs 2,100 plus taxes Date: Till May
The 1911 Restaurant at The Imperial brings you the season’s favorite treat with an array of delectable ice creams and sorbets. Tempt the child in you, with creamy indulgence and scoops of exotic flavours that are the perfect remedy to summertime blues. Price: Starting from Rs 550 plus taxes Date: Till May 14 Venue: 1911 Restaurant, The Imperial, Janpath Road.
Unplugged Courtyard presents Kerala-styled delicacies including the spicy and smoky tandoori South Indian spiced prawns and pancakes. Try dishes like Atta chicken, House BBQ pork ribs, Sukha bhuna gosht with parantha slider and more. Time: 12 pm to 1 am Price: Rs 1,500 plus taxes Date: Till May Venue: Unplugged Courtyard, Gurugram.
CAD has come up with a software-named Pulled jackfruit masala filo pie as it is served with their special star anise-scented apricot chutney. There are also special GoT-inspired dishes like Lannister’s chicken steak, Kingslayer, Needle to Theo’s drums of heaven, and King’s Landing crispy vegetables. Time: 12 pm to 12 am Price: Rs 325 plus taxes Venue: CAD, Sector 15, Gurugram.
Punjab Grill, presents a special 90s summer drinks menu offering fresh summer coolers like Chatmola electric soda, Pan Pasand chutki Martini, Swad cranberry margarita, Rim Jhim mojito and many more. Date: Till May 31 Time: 11 am to 10 pm Venue: Punjab Grill, Connaught Place.
Courtesy: The Pioneer
In a meal, we normally conjure carbs as a necessary yet boring evil. But when a chef elevates the simple grain to an experience par excellence, you know that a lot of thought has gone into curating the menu. At Oko, the newly-opened pan-Asian restaurant at The LaLit, the sticky fried rice was certainly the star of the meal which scored high on all sensorial counts — visual, olfactorial and gustational. The same can be said about the restaurant.
The U-shaped dining place is on the 28th floor, which, thanks to glass all around, offers a 360-degree view of what can be called the heart of the capital. So before stepping in, get ready to be enamoured by the twinkling lights of Connaught Place which seem to give the impression of stars below ones’ feet. The skyline forms the perfect backdrop and its fun to try and spot some of the iconic structures.
There are live Teppanyaki counters but it is not restricted to cuisine from Japan but also has full menus from China, Thailand, Korea, and Vietnam. What makes it interesting is that the hotel’s ideology of inclusivity is reflected in a healthy mix of a team of women and trans individuals.
The interiors are plush. The lighting subtle yet just enough for a meal. The carefully chosen artefacts, the different furniture arrangements which are classy as well as comfortable and the big granite table tops that act as tables add to the restaurant’s ambience and lead to a growing anticipation that one is in for a memorable time. And the place does not disappoint.
We started off with Som Tam, the Thai raw papaya salad which was stellar. With a perfect balance of flavours — sweet, sour, salty as well as the bite where the finely grated papaya is soft and the peanut added the crunch, this set the tone of the meal.
This was followed by dim sums — a vegetarian and a chicken mince one. With a delicate cover and crunchy vegetables inside, it was the one minus the meat which scored. The server told us that it is Broccoli almond dumpling, which is the speciality of the house but that was unfortunately unavailable at the time.
What works for Oko is that it takes the commonplace dishes and elevates it to something more sublime. And that is what exactly happened with the potato wedges, another of the starters. A thin coating which was crisp gave way to a softer interior when one bit into the spud. And then there was the unique combination of spices that are prepared in house which makes the dish, a comfort food that has the quality of gourmet dining. The herbs that are used in the dish like all the others at the hotel are sourced from their own farm as they abide by the policy of “we serve what we grow”.
The starters made us foretold that there was more good food in store and we were not disappointed. We went with Wok fried assorted funghi, Chicken smoke red pepper sauce which has barbeque style bell pepper and onion accompanied by Sticky fried rice and Pad Thai Noodles.
What really worked for Wok fried assorted fungi was not just the flavours but also the choice of mushrooms used. Each of the mushrooms added a distinct texture and a flavour that gave the dish a taste which was as unique and appealing as the name.
The Chicken smoke red pepper sauce got its taste from the barbeque sauce which gave it a marked smoky flavour that was appealing. Slightly sweet, the dish could be had accompanied by rice, noodles or just on its own.
The Pad Thai or flat noodles with its assorted mix of vegetables was the perfect accompaniment to both the dishes but it was the Sticky fried rice to which paeans can be written. While most of the ingredients are sourced locally, some, including the Jasmine rice that goes into the making of this dish comes from Thailand. But let me explain why the dish has to be written about alone. To begin with, coming from the Hindi heartland, my heart beats for Basmati where the true worth of any biryani is measured in each grain of rice being khila hua. So when the server recommended, a dish where the rice sticks together in clumps like a khichdi, it is certainly not my kind of gourmet food, (okay I concede that paella and risotto is comfort food which is also gourmet), I was sceptical. But when the rice came in, I got a whiff of a slightly nutty and a distinctly smoky aroma. A bite, and I had no qualms about pronouncing that this was certainly the star dish of the evening. The flavours were balanced, not too strong nor too mild, the vegetables retained a slight crunch which is somewhat hard to achieve when you are dealing with ones which are chopped really fine. It had a slight smoky flavour which enhanced the taste of both the accompanying dishes. A plate of this solo, minus any side dish can make for a satiating meal all by itself.
For dessert we had Tum Tim Krob which is a Thai delicacy made of tender coconut cream with water chestnuts topped with crushed ice, but this being winter, we gave the last a miss. This liquid is drunk rather than eaten and is mildly sweet which can be an acquired taste for some. Though, I admit, I think they have a winner on hands.
Writer: Saimi Sattar
Courtesy: The Pioneer