A Poverty Of Explanations

According to FCI figures, exporters have been provided rice and wheat at close to the price paid by below poverty line (BPL) PDS consumers. For wheat, the exporters have to pay about Rs 4,250 per tonne (Rs 100 more than its BPL price), and rice is made available at Rs 6,000 per tonne (Rs 350 more than BPL price). And this also includes the cost of transporting the grain to the ports! This, despite grains being procured at source from farmers for at least 30 per cent more than what the exporters pay for procurement.

That grain is being picked up by exporters and millers is revealed from the offtake figures of the FCI. The total foodgrain offtake during 2001-2002 was 30 million tonnes. Of this, only 13 million tonnes went to the targeted PDS. Seven million tonnes to the various schemes for the poorest of the poor. The rest went to exporters and local millers and large corporations in the Indian food market.

Even for companies tapping the local market, the FCI wheat and rice is a better bet since it comes cheaper by Rs 100 a quintal. The corporation’s prices are also fixed throughout the year. So, many manufacturers of wheat and rice products are going to FCI godowns rather than to the local mandi.