INDIA: Tempers Rise Over Report of Massive Grain Diversions

By Ranjit Devraj Reprint | | Print |

Ranjit Devraj

NEW DELHI, Sep 22 2004 (IPS) - Food security experts and people working among India’s poor are aghast at newly available parliamentary reports indicating massive diversion of subsidised food grains by unscrupulous traders allegedly in collusion with officials and politicians.

The report made by a parliamentary standing committee on consumer affairs, food and public distribution and tabled on Aug. 25 – and made available to reporters this week – alleges that a scheme to reduce India’s 60 million tonne grain surplus through subsidised exports ended up being diverted into the domestic market.

Under the scheme introduced in 2000 by the industry-friendly right-wing Bharatiya Janata Party (BJP) government defeated in the April/May elections, India had by the beginning of this year exported, at least on paper, 30 million tonnes of rice and wheat.

”This is the worst possible kind of fraud when grain that never reached poor, starving people ended up being sold for high profits,” Ramesh Sharma, an activist with the influential Gandhi Peace Foundation, told IPS in an interview on Wednesday.

Sharma said that for years it was public knowledge that the government controlled public distribution system (PDS) that was supposed to ensure that grain reached every home at affordable prices was ridden with high corruption.

At the heart of the PDS is a network of half-a million ‘ration shops’ or fair price outlets but the petty traders who run these outlets across the country are known to divert quotas, hoard up stocks and divert them into the black market or even sell them as cattle-feed which fetches better profits.

On a larger scale, subsidised grain is regularly spirited away from government godowns and television channels have tracked down trucks diverting away sacks full of subsidised grain from their intended destinations and aired the footage – eliciting little official comment.

”Diversion of food grain meant for starving people has become a joke in this country,” Ramesh Sharma said referring to earlier Planning Commission reports that estimated that up to 30 percent of PDS grain could be diverted.

But with the unexpected defeat of the BJP and the installation of a Congress-led and communist-supported coalition government, the perpetrators of the fraud may not easily escape.

The powerful Comptroller and Auditor General (CAG) has now been charged with sifting through some of the more blatant cases where traders presented false bills of lading or used other devices to benefit from export subsidies worth nearly 1.5 billion U.S. dollars.

”We are going to demand a full-scale investigation by the Central Bureau of Investigation (the country’s premier sleuthing body) into the scandal,” said D.P. Yadav, a former food minister and chairman of the parliamentary committee.

”It is particularly unfortunate that such a huge fraud took place during years when hundreds of deaths from starvation and suicides by farmers were reported from across the country,” said Devinder Sharma, the internationally known food security expert.

The simple fact, said Sharma, was that anywhere between 300 to 400 million Indians go to bed hungry in this country while the granaries have been overflowing and the government was spending money just to store it.

”There has been obscene lack of political will to save people from starvation and even military dictatorships around the world have a better record of looking after their people,” said Sharma.

Newspapers and television channels almost routinely report grain rotting away after being allowed to lie exposed on airport runways and highways – often only covered with flimsy plastic sheets. Large portions also end up being devoured by rats and other vermin.

During the BJP rule the nexus between traders and the PDS bureaucracy had become so entrenched that they succeeded in scuttling long-pending plans to use modern technology to help move grain from farm gates to consumers efficiently and cheaply.

Over the past decade PDS grain reaching the poor has decreased from around 20 million tonnes to less than 10 million tonnes. Economists are alarmed because it is an indication that poor Indians are having trouble buying food because of reduced incomes.

India’s peculiar situation stimulated the launching in 2002 of the ‘Right to Food Campaign’ by an informal network of organisations and individuals committed to creating equitable and sustainable food systems as well as ”entitlements relating to livelihood security such as the right to work, land reform and social security.”

The group that includes noted human rights advocate Colin Gonsalves and Delhi University economist Jean Dreze considers that the primary responsibility for guaranteeing these entitlements rests with the state.

The Right to Food Campaign has also petitioned the Supreme Court to intervene on behalf of starving people across the country in order to ensure that grain surpluses reach them.

”The new Congress-led, United Progressive Alliance government has been in office for four months now and starvation cases are still being reported. We need to see how much longer they take to make good on election promises to put an end to hunger,” said Devinder Sharma. a