April 2010LRS1 Food prices & Public Distribution System (PDS)

April 2010LRS2 Food prices Unprecedented rise in prices Govt. says price rise is due to international and natural factors so it can do little Prices had soared even before the drought; India produces enough food to feed its people if used justly People forced to cut food consumption Hunger and food security are major issues facing people

April 2010LRS3 National Food Security Act (NFSA) Confined only to BPL people To provide only 25kg foodgrain per month Already families covered under Antyodaya scheme for the poorest of poor receive 35 kg per month 40% BPL families fall in Antyodaya scheme NFSA will give less food to them

April 2010LRS4 NFSA is to fool people NFSA shall be implemented through present PDS People totally dissatisfied with present PDS Proposed NFSA has no intention to secure food for all people of country Proposed NFSA intention is to hoodwink and divide people and create a vote bank.

April 2010LRS5 How many poor in India? Planning Commission estimate 26% people of the country are Below Poverty Line (BPL) Tendulkar Committee of Planning Comm. itself estimates 36% BPL people Saxena Committee set up by Ministry of Rural Development estimates 50% of people of the country are BPL

April 2010LRS6 Various estimates of poor Arjun Sengupta Report on unorganized workers in the country said 77% people of the country live on less than Rs. 20/day. So as per governments’ own reports, number of BPL people are 26% to 77% of the population With no secure livelihood for most people, people struggling for a decent human life is much larger.

April 2010LRS7 Targetted Public Distribution System (TPDS) Introduced in 1997 in the aftermath of New Economic Policy (NEP) launched in early 90s NEP aimed at reducing all subsidies to people TPDS introduced to reduce the amount of food subsidy

April 2010LRS8 TPDS Major part of benefit of TPDS restricted to BPL people People above income level of Rs 100,000 per year, i.e., Rs 8,334 per month get little benefit Three categories for TPDS: BPL – this is as low as Rs.356 per person per month in rural areas and Rs. 539 in urban areas. APL (Above Poverty Line) up to Rs 1 lakh per year Above APL

April 2010LRS9 TPDS designed to fail and deprive people of ration Number of ration shops reduced drastically as the number of beneficiaries reduced to one third of what it was People required to travel long distance to reach shop Irregular supplies to ration shops Poor quality, sometimes inedible quality supplied

April 2010LRS10 TPDS built for black-marketing Ration shop owner income kept at the same level of around 8 paisa/kg; required to transport food from the FCI godown to his shop within the same amount Many ration shops surrendered Shop cannot be run with this income so forced to do black-marketing and thus deprive people of their ration

April 2010LRS11 People have no faith in TPDS PDS allocation of the state decided by the lifting of the previous year This has led to lower and lower allocation year after year So TPDS system ensured people never got their full entitlement of ration People forced to rely less and less on ration and buy more and more from market

April 2010LRS12 Mounting food stock Govt. had stock of over 4 crore tons of wheat and rice before arrival of Rabi crop Rabi crop procurement, in progress right now, expected to add 2 crore tons of wheat to the stock Food grain stock will so rise to 6 crore tons Yet, wheat prices rose during the last three months

April 2010LRS13 Rotting wasted stocks 2 crore tons stock is adequate to meet any emergencies, as per government guidelines But, govt. refuses to release excess stock to bring down price of wheat and rice Govt. has covered storage capacity for only 2 crore tonne Rest lying in open; will rot; will be eaten by rats but not given to crores of hungry

April 2010LRS14 Exports are subsidised instead of people Govt. will shortly say that wheat and rice have to be exported to bring down stock As soon as govt. announces intention to export, international traders will force the price down so they can buy cheap from India Going by past experience, wheat will probably get exported at Rs. 8/kg though govt. is buying at Rs. 11/kg So Indian people will subsidise international food traders by Rs 3/kg, but govt. has no money to subsidise Indian people

April 2010LRS15 Export import cycle Good wheat Rabi crop is forcing farmers to sell even below Minimum Support Price Rs. 11/kg for wheat Farmers will reduce wheat sowing in the coming years leading to lower wheat production Meanwhile wheat would have been exported to reduce stock Govt. will now say wheat has to be imported to build stock and bring down rising wheat price

April 2010LRS16 Food policy for benefit of big trading companies This cycle of export followed by import followed by export has repeated many times during the last decade for many food items Policy of food self-sufficiency abandoned in favour of import & export Big multi-national and Indian trading companies are major beneficiaries of this policy People and farmers are biggest sufferers of this policy

April 2010LRS17 Result of policy of globalization through liberalization Current food policy is outcome of the policy of globalization through liberalization under New Economic Policy Produce food for export; import whatever and whenever is required Farmers and consumers must fend for themselves

April 2010LRS18 People’s right and government’s responsibility Providing adequate food of good quality at affordable price at all times is primary responsibility of government Nutritious food in adequate quantity at affordable prices and of good quality is the right of every person. People also have the right to get the kind of food stuff they need.

April 2010LRS19 We demand Scrapping of TPDS and its replacement by Universal PDS (UPDS) Every family in the country is given 35 kg good quality wheat or rice, as per their choice, at Rs. 3/kg every month irrespective of their income. The govt. itself considers that this is what all people can afford. Provide all essential needs of people – dal, oil, sugar, salt, tea, soap, kerosene, etc. – through UPDS at affordable prices (Govt has a list 13 essential commodities – provide all of them)

April 2010LRS20 What will it cost Providing 35 kg foodgrain to every family every month will require 9 crore tons of wheat and rice every year. Total annual food grain production in the country is close to 20 crore tons, more than double of the requirement It will cost government around Rs 1,20,000 crore a year. Current food subsidy, most of which does not benefit people, is around Rs 60,000 crore. Govt says it does not have money to increase food subsidy

April 2010LRS21 Govt has enough money to do what it considers important Defence budget of Rs 1,60,000 crore; 70% of it spent on buying new arms If we stop buying new arms, everybody in the country can be fully fed at Rs. 3/kg Interest payment to finance capital institutions on money borrowed by govt. borrowings is more than Rs. 3,00,000 crore Proposed food subsidy is less than half of the above

April 2010LRS22 Govt. has enough money to help big capitalists In 2008, when global economic crisis hit India, govt. announced three stimulus measures between Nov 2008 and Feb 2009, costing Rs, 2,10,000 crore to stimulate demand and to arrest falling profits of big capitalists. So govt. could muster so much money in a few months when it needed to help those it wanted to help

April 2010LRS23 Govt has no mechanism to control price after TPDS Introduction of TPDS took away the machinery govt. could use in the past to provide food out of its stock at low price to a large number of people to control prices With so few people covered by TPDS and so few ration shops effectively operating, govt. now has no mechanism to intervene in market to bring down price of food

April 2010LRS24 Food stock crisis related to TPDS While food procurement continued as before through MSP, food off-take through TPDS kept coming down, leading to build- up of stocks in govt. godowns So the crisis of mounting food stocks and ensuing crisis for farmers are related to the policy of TPDS

April 2010LRS25 We demand Demand for UPDS can be fulfilled only if the interests of farmers are taken care of We demand remunerative guaranteed support price to farmers for all food items produced by them, including coarse grains like jowar, bajra, etc We demand farmers be provided all the inputs – seed, fertilizer, pesticide, water, electricity, diesel, etc – at the price assumed while working out the guaranteed support price

April 2010LRS26 For UPDS to work for people, we demand We demand removal of all private wholesale traders in food items We demand the control of PDS be handed over to Lok Samitis

April 2010LRS27 Thank You!