Fod For The Poor : Rs 30 Per Kg

In the view of the prime minister’s economic advisory council, according to the note on ‘Economic Reforms: A Medium Term Perspective’ prepared for the council’s meeting this week, “the present [foodgrain] procurement policy should be drastically revised so as to limit government purchases only for preventing sharp fall in prices (i e to support prices) instead of government buying all that is offered at predetermined ‘fair’ prices”. Less than a fortnight before the council’s meeting, the chief ministers of Punjab and Haryana had rushed to Delhi to meet the prime minister and seek an assurance from him that there would be no cut in the price at which the Food Corporation of India (FCI) would buy wheat in the forthcoming rabi marketing season. On his return from the capital, the Punjab chief minister told newspersons in Chandigarh that he and his Haryana counterpart had indeed got the assurance they had sought from the prime minister.

The provocation for the Punjab and Haryana chief ministers’ hurried trip to Delhi was a reported statement by the union minister for consumer affairs and public distribution, Shanta Kumar, that if the procurement price were retained at last year’s level, Rs 580 per quintal, the FCI was likely to be forced to buy as much as 18 million tonnes of wheat. With the FCI already burdened with foodgrain stocks of 45.7 million tonnes at the beginning of January, fresh procurement of this magnitude out of the rabi crop was clearly something to be avoided. This could be achieved only by reducing the FCI’s buying price below last year’s level. Shanta Kumar did not indicate the order of reduction required, but the Commission on Agricultural Prices and Costs had in its customary report for the rabi crop recommended a reduction of the procurement price of wheat to Rs 520 per quintal, calculating that even at this price the FCI would have to buy some 11 million tonnes, which again would be far in excess of the actual annual wheat offtake from the FCI.