02/09/08

who benefits from food security?

definitely not the farmers in the country.

look at this scenario: the goi buys a quintal of milled rice at rs.1270 (assuming an m.s.p. of rs. 850 for paddy) in punjab. and sells it to food deficit states in the north east (say, mizoram) at rs. 565 a quintal. the mizo government sells it at fair price shops, adding (or deducting, actually) its own subsidy at rs. 5 per kg (or rs. 500 per quintal) to the poor. a subsidy of (rs. 1270 minus rs. 500) rs. 770 per quintal (or rs. 7.70 per kg)- the poor in mizoram should be happy, right? the poor in mizoram should be happier than that: because the subsidy isn't just rs. 770 per quintal (or rs. 7.70 per kg). it's much more than that.

according to an estimate, the goi (through fci) spends around rs. 760 on carrying and handling every quintal of rice. that's on an average. now, the distance between punjab and the northeast is much more than what could be considered average- wouldn't the costs be much higher? say, rs. 1200? wouldn't that mean that the total subsidy actually comes to, something like, rs. 1970 (or, rounding off, rs. 2000) per every quintal of rice?

now, what should actually cost the wholesale trader, not even the consumer, in mizoram rs. 2500 or more (per quintal, or, rs 25. per kg) is sold at rs. 500 (or one fifth the actual cost, not the price) to the poor in mizoram.

let's leave the poor alone (for this post) and consider the poor mizo farmer. would he be happy with this situation? if there weren't any pds (or msp mechanism operating) in mizoram, rice would probably be selling at rs. 40 a kg at retail stores in the state. and taking into account all other costs, the mizo farmer would probably be making rs. 20 a kg (or, rs. 2000 a quintal of paddy, at worst) instead of the rs. 850 (at best) a quintal he makes now.

why should he be happy?

3 comments:

nayni said...
This comment has been removed by a blog administrator.
refractor said...

Some body has offered to publish my book.
entirely at his own cost
isn't that great!

kuffir said...

refractor,

that's fantastic! congratulations! the book deserves a more wider readership and access to internet is still very limited in india, especially to those who'd be concerned about the issues you write about. i wish you all the luck and please let me know the publishing details etc..so that i can buy copy..:)

 
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