The public sector undertaking, RITES Ltd, in June 2001 had submitted a feasibility report for inviting private sector participation in development of bulk foodgrains handling, storage and transportation on build, operate own (BOO) basis. The feasibility plan envisages transportation of bulk foodgrains from base depots in Barnala and Moga in Punjab and Sirsa and Kaithal in Haryana to field depots in Chennai, Coimbatore, Bangalore, New Mumbai and Hooghly. The base depots will have a storage capacity of 300,000 tonne each and all of them, with the exception of New Mumbai, will have a storage capacity of 100,000 tonne each. The New Mumbai field depot will have a storage capacity of 200,000 tonne.
The government thought of implementing the RITES feasibility report only in respect of wheat. RITES, advisor to the Food Corporation of India (FCI), floated the global expression of interest (EOI), and so far 16 companies, including Escorts Ltd, the Australia-based Augwest and a four-member consortium with Markfed, Punjab, have bid for the project. The bids were declared closed on January 21. Financial bids for the project are also expected to be invited and the prospective company is expected to be selected by April 19, this year.
The project may go through as the government has already accorded infrastructure status to foodgrain handling and is prepared to give fiscal incentives. But it is to be seen whether this project will be in the interests of farmers and consumers in major parts of the country.
The issue is whether the RITES report is supportive of the government’s declared policy of decentralisation of procurement and distribution of foodgrains. Whether RITES, in preparing its feasibility report, has taken care of all the surplus wheat producing states. The answer to both the questions is in the negative.
It is well-known that only some states can grow wheat. Hence, there is need for bulk transportation of wheat from the surplus regions to consuming areas which do not grow wheat. RITES, instead of identifying all the major wheat surplus states in the country and working out the possibilities of bulk transportation to nearby deficit areas, has only taken care of Punjab and Haryana. It has ignored Uttar Pradesh, which is the largest producer of wheat in the country with an output amounting to 25.98 per cent of the total wheat produced in the country. It has ignored Madhya Pradesh, which is the only state that produces quality duram wheat in the country.
According to Agricultural Statistics at a Glance-2001, the major wheat producing states, in order, are Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar, Maharashtra, Gujarat, West Bengal, Himachal Pradesh and Jammu & Kashmir. The study, done by the National Council for Applied Economic Research (NCAER), has corroborated the facts by stating that Bihar, Gujarat, Haryana, Himachal Pradesh, Madhya Pradesh, Punjab, Rajasthan and Uttar Pradesh have huge marketable surplus of wheat every year.
It is clear that RITES has ignored the interests of the wheat surplus states. Logically, it should have thought of transporting wheat from each of the surplus states to the nearest deficit areas. This would have been better economics, both in terms of the cost involved and the interests of farmers and consumers.
Wheat from eastern Uttar Pradesh, Bihar and West Bengal can easily take care of the needs of the eastern and north-eastern regions. The southern region can be fed by wheat from Uttar Pradesh, Madhya Pradesh, Gujarat and Maharashtra. This strategy can cover all the wheat deficit areas. Unfortunately, RITES has not worked things out in this fashion.
In fact, the RITES report may lead to dumping of surplus wheat from Punjab and Haryana to other parts of the country. This, in turn, may result in wheat-growing farmers in other major wheat producing states making heavy distress sales or switching off wheat production completely. Instead of trying to rectify the lacuna of the ‘Green revolution formula’, RITES has aggravated the mistakes made in the past. The founding fathers of the ‘Green Revolution’ no doubt deserve credit for transforming agriculture, but the planning process was not tuned to the economies of scale. The north-west region of the country was selected as the centre of the ‘Green Revolution’ and all efforts were focused on this region. The result was that India did attain a ‘Green Revolution’, but with surplus stocks locked up in godowns while millions went hungry. Ideally, the centre of the ‘Green Revolution’ should have been selected in a more central part of the country where rice-wheat inter-cropping was in vogue.
The British, however, selected the eastern region as the centre. They established the Imperial Council of Agricultural Research (which was later named the Indian Council of Agricultural Research (ICAR) after Independence) in Pusa village in Samastipur district in Bihar. The Britishers found the productivity levels in eastern India higher than other parts. After the earthquake in 1939, ICAR was temporarily shifted to Delhi. The idea was to shift ICAR back to Pusa in Bihar, but this could not be done as the British Empire was busy with World War II.
There is a lot to learn from history. This time round, let us not forget to work out an effective strategy for production and distribution of wheat keeping in in view the interests of farmers as well as consumers.