A pile of rat shit!

53%  of India ‘s land is arable, as per 2011 world bank report.  In hectares, we have 2^nd largest land area, under cultivation, after US. That is huge. No wonder, this region nurtured an ancient civilization that found it perfect to settle and grow. It was a sought after land for many intruders, who wanted to conquer it and then settle down here to enjoy its riches. However, we in the present are wasting the natural bounty. Infact we have made this huge fertile land our bane.

India is the 2^nd largest producer of rice - 23% of entire worlds output; 2^nd largest producer of wheat - 18% of worlds production, 2^nd largest producer of fresh vegetables – 10% of world production.

What do we do with this bounty? We let it rot! Why, because we want the food to be available for our own countrymen. So, the government buys the food and stocks it. Does not matter if we do not have storage space, we just stock it in open. Does not matter if the food spoils, we still have a pile to look at from a distance and feel happy that we have a pile, even if it most of it has turned into rat shit!

In financial terms this is how it translates – Farmers spend money to grow the agriculture produce, farmers use fertilizers, subsidized by the government to the tune of INR65,000 cr. Farmers get free electricity, in most parts of the country, to pump ground water for irrigation, this translates to approx. INR30,000 to 35,000 Cr. Then there is subsidy on diesel, subsidy on seeds and other miscellaneous schemes that keep getting announced from time to time. Add to this the cost of the effort put in by 50% of our population, which is engaged in agriculture, approximately 600million people.  You are looking at a staggering bill! However, this is just the cost of production. 

Now, comes the procurement time. Government again spends money to buy the produce and stock it. Government has administrative machinery to organize buying and purchasing of the agriculture produce. Government machinery costs money.  For stocking, government creates storage spaces, though grossly inadequate and substandard, these storage spaces consume a lot of money to maintain (at least on paper). Government has many organizations to manage this infrastructure, and logistics of movement of farm produce from one region to another, like FCI. These organizations are overstaffed, inefficient and corrupt to the core, these eat more money.

Then what we do? We wait. We wait for the food pile to turn into a pile of rat shit, so that the cycle can start again!

Am I making case for no food buffer?  Absolutely not. We most definitely need some. But, typical of us, when we do, we overdo. There is a reasonable limit for actual food buffer and there is a way to manage that buffer. Beyond a certain level of actual food buffer, we need to create a financial buffer for food.  We can sell excess food in the world market, pocket that money, invest that money in safe securities, which will earn interest as well, and use it when we have to, during the rainy days, when our buffers run low or when the production in lower.