Making India food-secure

by Dave

Whatever may be the interpretation and the nuance involved, one cannot deny that food security, as defined by availability of grain, has dropped greatly. In the short run, the problem may be aggravated by high prices due to exports at a time when domestic demand is high. But in the long run, it’s a problem of productivity and government dominance of grain trade. The latter factor is something that can be handled as quickly as the government wants to.
So far, it’s a command-driven system. The Food Corporation of India (FCI) purchases, stores and distributes grain. FCI then supplies it to deficit states. Because of the scale of operations and the costs involved, the wastage is immense. The economic (final) cost of rice in 2007-08, for example, was Rs1,572 per quintal, while the minimum support price (MSP) or the purchase price was Rs745 per quintal. In other words, the final cost was a whopping 111% more than the purchase price.