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The food subsidy bill is all set to swell this year to far beyond the budgetary provision of Rs 8,200 crore, thanks to massive accumulation of wheat and paddy in the Central grain pool. While procurement is steadily increasing because of liberal hikes in grain support prices year after year, offtake from the public distribution system (PDS) is on the decline due to the vanishing differential between prices in the open market and fair price shops. Domestic prices having gone higher than international levels, so the the prospects of grain exports have become slim. Non-Basmati rice exports have already nose-dived and wheat, instead of being exported, is currently being imported despite the domestic glut.

 

According to official reckoning, there will be over 10 million tonnes of wheat stocks in excess of the buffer stock requirement next April, when the fresh crop starts pouring into the mandis. Technically, therefore, the Centre will not need to procure any wheat in the next rabi marketing season as it will already have in stock enough grain to meet more than a year's PDS requirement. But it will surely not be able to exercise such restraint, for obvious reasons. In fact, the unprincipled nexus between the Punjab government and rice millers and farmers has resulted in the past in procurement of even sub-standard rice, which no consuming state wants to lift. Grain politics, therefore, has rendered the food surplus of Punjab and its adjoining states a bane for the management of the country's food economy.

While grain will rot in public godowns, the tax payer will be paying for keeping it there. Bold decisions are needed, to prune the stocks even if it involves incurring some losses in the short run, as these will be offset by the saving on inventory carrying costs. The food ministry, now renamed as the public distribution and consumer affairs ministry, has recently initiated some welcome moves in this direction, though these are unlikely to please the surplus states. Its proposal to give unmilled paddy to the rice millers in states like Tamil Nadu, Karnataka and even Jammu & Kashmir for processing and consumption there, is one such move. This will help teach a lesson or two to Punjab's rice millers, who have been refusing to improve milling quality simply because they can get away with it, courtesy the state government. If the new proposal goes through, they will not only lose the basic milling business but also the by-products like paddy husk and rice bran, which have become an important source of additional profits for rice mills.