Indian Agricultural: Growth, Generation, Policy & Problem Indian Agricultural | Page 42

Pg.no. 41
resulted food prices to rise substantially and beyond the reach of a large number of families. This took
its toll on the offtake which fell substantially leading to unsurmounting stock of food grains. That is
why the recent government committee established to formulate the long-term grain policy has
recommended the prices of grain for APL families to be slashed by 25 percent. PDS expanded
enormously after establishment of the Food Corporation of India (FCI) and the Agricultural Prices
Commission (APC) now known as Commission for Agriculture Costs and Prices (CACP). Over the
years, the amount of food grains distributed through the PDS has increased enormously. However,
despite an extensive public distribution programme, the benefits quite often have not reached the
people it was intended for. Simultaneously, the vulnerable producers who are growing rain-fed crops
like jowar, bajra etc. could not benefit from the governments' policy of assuring ruminative prices.
Added to this the fixed pricing policy of the government throughout the year for the purpose of
procurement and distribution has increased the concentration of the market arrivals in a few months
or the days of the month. High degree of concentration of market arrivals results disorderly marketing
of the produce and make difficult, the handling of the large quantities of the grains purchased
efficiently in a short post-harvest period by the FCI, as a result the difference of the economic cost of
the FCI and the issue prices widened. At the same time size of the distribution continued enlarging
year after year leading to much increase in the burden of the food subsidy on the exchequer. Despite
the country reaching near self-sufficiency in food grains production, its continued policy of offering
higher MSP has reached a limit where farmers are more interested in selling their produce to the
Government then to the market, as a result the market prices of the food grains have increased to
adversely affect the poor. Secondly, the stocks position has also gone beyond the desired level
leading to heavy increase in the burden of the food subsidy. Government's decision to increase the
issue prices of the food grains, to make up the deficit, have sharply reduced the offtake leading to
further bulging of the stocks. It is noteworthy that after the SAP in 1991 the overall system of food
management and public delivery was over hauled. Initially the RPDS was introduced with natron
targeting and thereafter the RPDS was replaced by the TPDS in 1997. Unfortunately, both the
schemes miserably failed in achieving their stated objectives of increasing the food grain availability
among the poorest and reducing the government's food subsidy burden. It is important to note that
after the structural adjustment programme the consumer food subsidy has fallen in real terms and
since then has not changed much as a share of gross domestic product (GDP).'' It is due to increases
in intermediate costs and costs of procurement, storage, buffer-stock operations and transportation.
Consequently, the burden of inefficiencies in the system of storage and distribution are being passed
on to consumers in the form of higher prices. For example, between 1975 and 1989, the distribution
costs of the Food Corporation of India (FCI) has increased by 274 percent whereas the procurement
costs increased only by 70 percent. And in 1992-93 the per-quintal cost of procurement and
distribution of the FCI was almost as high as the per quintal support price. Particularly, the period of
structural adjustment saw a steep rise in the prices of food grains supplied through the public
distribution system and the consequent decline in the offtake of the same. Following pages have
some more details about India's evolving food policy since the World War II.
Institutions to Implement Agriculture Price Policy:
Ramesh Kumar P