Friday, January 08, 2010

Has the Charkha started spinning?

The recipe is straightforward: Education, housing, electricity (or other energy solutions), water and health—all in affordable and roughly equal proportions — on a base of technology, innovation and plenty of empowerment. The end result? A population that's literate, healthy, reasonably content — and in a position to contribute to the country's economic growth (along with their own prosperity). The formula for such progress is not rocket science.

Rather, execution has proved to be, over the decades, a complex challenge. Over the past few years, however, a clutch of state governments, non-government organisations (NGOs), companies looking to tap new markets and path-breaking entrepreneurs has been working on projects aimed at improving the quality of life of the underprivileged. Some are forprofit (with the hope that these masses will one day generate incomes, and eventually some of it would be disposable), others not quite. As BT finds out, many of these experiments are working like a charm in a localised manner.

For the hundreds of millions in the country to benefit, however, what's needed are many, many more such experiments; and the ability to scale them up and make them viable. The good news: A start has been made. Read on:

The World Is Their Classroom
It started as an exercise in 38 schools in 2003 in the Chennai Corporation, went up to 264 schools by 2007, before scaling up to all the 38,486 schools in Tamil Nadu. Today, this model of activity-based learning (ABL) that seeks to address gaps in primary education covers all the governmentaided schools in Tamil Nadu.

Jharkhand, Karnataka, Madhya Pradesh, Rajasthan, and Chhattisgarh have started pilot projects. A few other states have similar plans. Neighbours like Sri Lanka and China are showing keen interest after a recent World Bank report and UNICEF vouched for it.

Developed under the aegis of M.P. Vijayakumar, then Chennai Corporation Commissioner who later became Director, Sarva Shiksha Abhiyan, Tamil Nadu, ABL adopts a combination of two sets of systems: The Rishi Valley school systems (advocated by thinker J. Krishnamoorthy, who stressed that an environment that makes the child a complete human being should be created) and Montessori systems. The uniqueness of this model: It makes learning fun, meaningful and child-centred. The results are showing in improved academic performance and attendance.

For instance, in 2002, before implementation of ABL, the rate of primary and upper primary school completion in Tamil Nadu was 64 and 68 per cent, respectively. By 2008, after ABL implementation, it increased to 93.94 per cent and 92.7 per cent. Similarly, repetition rates as high as 24 per cent and 19 per cent for primary and upper primary in 2002, dropped to 4.84 per cent and 5.41 per cent in 2008. The drop-out rates (transitioning from primary to upper primary and onto higher classes) dropped from 12 and 13 percentage points for primary and upper primary, respectively, in 2002 to 1.23 and 1.9 per cent.

Clearly, ABL has all the right ingredients—quality, focus and scalability. Things can only get better and bigger from here, as long as people like Vijayakumar are around. "If we don't do it when we have some influence, who will," he shrugs.

— Nitya Varadarajan

Let There Be Light
Almost half of the country's households have no connection, or an unreliable one, to a grid for electricity. That's a grim statistic but, for Ashis Kumar Sahu, Chief Operating Officer, SELCO Solar Pvt Ltd, therein lies a huge opportunity. SELCO Solar has been providing "sustainable energy solutions and services to underserved households and businesses" since 1995.

That sustainable energy solution is in the form of solar-based LED (short for light emitting diode) lighting, which converts sunlight into electricity. SELCO also facilitates third-party finances, installs, services and designs solutions based on the customer's needs. "We have so far served over 1,00,000 households in the last 14 years and plan to double that number in the next 4-5 years," says Sahu. His target market: Typically, households that earn Rs 2,000-4,000 a month or, in the case of farmers, those with annual cash flows of Rs 40,000 per annum.

Solar-based LED lighting may just be the next big thing because of the gradual reduction in the cost per unit—from Rs 20 per unit five years ago to Rs 16-17 per unit currently— although it is still more expensive than conventional sources of electric power. But then, for the government to take electricity grid connections to the country's remotest corners will be a very long-term exercise—and a more expensive one, too. With the help of a back-of-the-envelope calculation, Sahu reckons that a Rs 4 per unit of grid power connection actually works out to around Rs 9-10 per unit (after factoring in costs like transmission and distribution losses and cost to the environment).

In future, the extent of decline in solarbased lighting prices will be linked to the way volumes pick up and on the number of players entering the field. If solar-based LED power is expensive today, it's because of all that goes into it—a panel, a battery plus installation charges which, depending on the model and the solution requirement (single light or home lighting), vary between Rs 2,000 and Rs 6,000.

Yet, that's not deterring more players from entering this segment of energy. Karnataka alone today has 15-16 players, says Sahu. That's because the high cost notwithstanding, millions of Indians have little choice: It's either a kerosenelighting solution or solar power. Yet, cost reduction measures coupled with innovative financing options and perhaps even interest subsidies or waiving off the requirement for payment of margin money while taking a loan for poor households and farmers on such lighting products are the need of the day.

— E. Kumar Sharma

Water, Water Everywhere
It can go down as one of the wonders of Independent India. The 1 lakh check dams that the Gujarat government, local people and NGOs have built in the past decade as part of a statewide campaign launched by the then Chief Minister Keshubhai Patel in 1999, and then taken to a missionary level by his successor, Narendra Modi, has created something that gives hope to the entire country. (Check dams are barriers built on shallow rivers, or even streams, for the purpose of water harvesting). The message: If Gujarat can bring up the oncedepleting water table in the state, the rest of India, which is struggling to cope with a water crisis—created by overuse of water and the lack of water table recharge measures—can also do it.

An ongoing study being conducted by the Central Ground Water Board in Gujarat has found that the water table in the state, which was depleting at a frightening pace till about seven years ago, is now going up, with the decade-long check dam drive being one of the main contributory factors. Another factor that has led to a rise in the ground water table is the fillip given by the Modi government to drip irrigation. Modi's mantra has been: "If you want to save future generations then recharge groundwater instead of mercilessly exploiting it." People are listening, especially farmers.

The Gujarat government has followed a multifaceted strategy to conserve rain water through check dams. At one level, the state rural development department makes small check dams in partnership with the water user groups in villages that have been formed for the purpose. This way, nearly 30,000 check dams have been built since 2000. But a bigger initiative is of the state irrigation department through the Sardar Patel Water Recharge programme under which nearly 70,000 check dams have been built since then. Under this programme, 80 per cent of the cost of building the dam is borne by the department while the rest comes from the people, often in the form of free labour.

The recharge of the ground water table because of check dams has helped increase Gujarat's crop production (along with successive good monsoons and water from the Narmada dam). Says Mathur Savani, who runs Saurashtra Jaldhara Trust, which has played a major role in Saurashtra in constructing check dams with the help of the government: "The check dam revolution of Gujarat has a message for the entire country that India can overcome the burgeoning water crisis if the government and people come together with a firm resolve and a clear-cut plan."

— Uday Mahurkar

Spreading the Wealth of Health
Eight years ago, Karnataka Milk Federation requested cardiac surgeon Dr Devi Shetty to endorse its low-fat milk product as the best diet for heart patients. Dr Shetty agreed but demanded something in return: The cooperative body must offer health insurance to all its members (milk producers). The idea caught on. On June 1, 2003, the state launched Yeshasvini, a health insurance scheme targeting members of cooperative societies. Eventually, the scheme was extended to their family members as well. They can join the scheme by paying Rs 150 per head per year and get a medical coverage of Rs 2 lakh. The scheme is run by Yeshasvini Trust, a government initiative involving both senior officials and healthcare providers.

There are 410 hospitals that are currently open to these members. "The intention of the scheme is to pay for all varieties of surgeries," says Dr Shetty, a member of the Trust and Chairman of Narayana Hrudayalaya. The biggest success of the scheme, he says, lies in not just covering three million farmers but in proving a concept that with just Rs 10 a month (Rs 5 when it started), it is possible to run a health insurance scheme. In the 12-month period ending May 31, 2009 about 75,000 members had surgeries and about 2 lakh members availed treatment as outpatients, free of charge.

— K.R. Balasubramanyam

The Home Remedy
Neetu Chauhan, 24, a housemaid, and her husband Guddu Chauhan, 35, a driver, have a family income of roughly Rs 15,000 a month. Till recently, they were staying in a slum in Worli in central Mumbai. Today, the duo has moved into a 360-sq. feet flat in the suburb of Virar on the outskirts of Mumbai. The Chauhans bought their dream house for around Rs 6.5 lakh.

Like the Chauhans, there are an estimated 14 million households with earning members working in the informal sector in India's cities. Within these, 9 million would be those where earning members are typically drivers, vegetable vendors, and small foodstall owners getting between Rs 10,000 and Rs 20,000 a month—with no salary slips. "We gave the Chauhans a 15-year loan of Rs 5 lakh after personal interviews with Neetu and Guddu and their family supported by checks with the employer; we confirmed their incomes based on which the loans were granted," says Rajnish Dhall, Director, Micro Housing Finance Corp, a micro-mortgage finance company.

"The estimated market size (for homes in the Rs 3-10 lakh range) is Rs 13,00,000 crore with potential demand from 21 million urban households (with household incomes between Rs 7,000-25,000 a month)," says Ashish Karamchandani, CEO, The Monitor Group, India, who has been has been closely involved in this space.

Glimmer of Hope - Business Today - Dec 13 2009 Edition

Leadership according to MANdela!

Nelson Mandela has always felt most at ease around children, and in some ways his greatest deprivation was that he spent 27 years without hearing a baby cry or holding a child's hand. Last month, when I visited Mandela in Johannesburg — a frailer, foggier Mandela than the one I used to know — his first instinct was to spread his arms to my two boys. Within seconds they were hugging the friendly old man who asked them what sports they liked to play and what they'd had for breakfast. While we talked, he held my son Gabriel, whose complicated middle name is Rolihlahla, Nelson Mandela's real first name. He told Gabriel the story of that name, how in Xhosa it translates as "pulling down the branch of a tree" but that its real meaning is "troublemaker."

As he celebrates his 90th birthday next week, Nelson Mandela has made enough trouble for several lifetimes. He liberated a country from a system of violent prejudice and helped unite white and black, oppressor and oppressed, in a way that had never been done before. In the 1990s I worked with Mandela for almost two years on his autobiography, Long Walk to Freedom. After all that time spent in his company, I felt a terrible sense of withdrawal when the book was done; it was like the sun going out of one's life. We have seen each other occasionally over the years, but I wanted to make what might be a final visit and have my sons meet him one more time.

I also wanted to talk to him about leadership. Mandela is the closest thing the world has to a secular saint, but he would be the first to admit that he is something far more pedestrian: a politician. He overthrew apartheid and created a nonracial democratic South Africa by knowing precisely when and how to transition between his roles as warrior, martyr, diplomat and statesman. Uncomfortable with abstract philosophical concepts, he would often say to me that an issue "was not a question of principle; it was a question of tactics." He is a master tactician.

Mandela is no longer comfortable with inquiries or favors. He's fearful that he may not be able to summon what people expect when they visit a living deity, and vain enough to care that they not think him diminished. But the world has never needed Mandela's gifts — as a tactician, as an activist and, yes, as a politician — more, as he showed again in London on June 25, when he rose to condemn the savagery of Zimbabwe's Robert Mugabe. As we enter the main stretch of a historic presidential campaign in America, there is much that he can teach the two candidates. I've always thought of what you are about to read as Madiba's Rules (Madiba, his clan name, is what everyone close to him calls him), and they are cobbled together from our conversations old and new and from observing him up close and from afar. They are mostly practical. Many of them stem directly from his personal experience. All of them are calibrated to cause the best kind of trouble: the trouble that forces us to ask how we can make the world a better place.

No. 1
Courage is not the absence of fear — it's inspiring others to move beyond it
In 1994, during the presidential-election campaign, Mandela got on a tiny propeller plane to fly down to the killing fields of Natal and give a speech to his Zulu supporters. I agreed to meet him at the airport, where we would continue our work after his speech. When the plane was 20 minutes from landing, one of its engines failed. Some on the plane began to panic. The only thing that calmed them was looking at Mandela, who quietly read his newspaper as if he were a commuter on his morning train to the office. The airport prepared for an emergency landing, and the pilot managed to land the plane safely. When Mandela and I got in the backseat of his bulletproof BMW that would take us to the rally, he turned to me and said, "Man, I was terrified up there!"

Mandela was often afraid during his time underground, during the Rivonia trial that led to his imprisonment, during his time on Robben Island. "Of course I was afraid!" he would tell me later. It would have been irrational, he suggested, not to be. "I can't pretend that I'm brave and that I can beat the whole world." But as a leader, you cannot let people know. "You must put up a front."

And that's precisely what he learned to do: pretend and, through the act of appearing fearless, inspire others. It was a pantomime Mandela perfected on Robben Island, where there was much to fear. Prisoners who were with him said watching Mandela walk across the courtyard, upright and proud, was enough to keep them going for days. He knew that he was a model for others, and that gave him the strength to triumph over his own fear.

No. 2
Lead from the front — but don't leave your base behind
Mandela is cagey. in 1985 he was operated on for an enlarged prostate. When he was returned to prison, he was separated from his colleagues and friends for the first time in 21 years. They protested. But as his longtime friend Ahmed Kathrada recalls, he said to them, "Wait a minute, chaps. Some good may come of this."

The good that came of it was that Mandela on his own launched negotiations with the apartheid government. This was anathema to the African National Congress (ANC). After decades of saying "prisoners cannot negotiate" and after advocating an armed struggle that would bring the government to its knees, he decided that the time was right to begin to talk to his oppressors.

When he initiated his negotiations with the government in 1985, there were many who thought he had lost it. "We thought he was selling out," says Cyril Ramaphosa, then the powerful and fiery leader of the National Union of Mineworkers. "I went to see him to tell him, What are you doing? It was an unbelievable initiative. He took a massive risk."

Mandela launched a campaign to persuade the ANC that his was the correct course. His reputation was on the line. He went to each of his comrades in prison, Kathrada remembers, and explained what he was doing. Slowly and deliberately, he brought them along. "You take your support base along with you," says Ramaphosa, who was secretary-general of the ANC and is now a business mogul. "Once you arrive at the beachhead, then you allow the people to move on. He's not a bubble-gum leader — chew it now and throw it away."

For Mandela, refusing to negotiate was about tactics, not principles. Throughout his life, he has always made that distinction. His unwavering principle — the overthrow of apartheid and the achievement of one man, one vote — was immutable, but almost anything that helped him get to that goal he regarded as a tactic. He is the most pragmatic of idealists.

"He's a historical man," says Ramaphosa. "He was thinking way ahead of us. He has posterity in mind: How will they view what we've done?" Prison gave him the ability to take the long view. It had to; there was no other view possible. He was thinking in terms of not days and weeks but decades. He knew history was on his side, that the result was inevitable; it was just a question of how soon and how it would be achieved. "Things will be better in the long run," he sometimes said. He always played for the long run.

No. 3
Lead from the back — and let others believe they are in front
Mandela loved to reminisce about his boyhood and his lazy afternoons herding cattle. "You know," he would say, "you can only lead them from behind." He would then raise his eyebrows to make sure I got the analogy.

As a boy, Mandela was greatly influenced by Jongintaba, the tribal king who raised him. When Jongintaba had meetings of his court, the men gathered in a circle, and only after all had spoken did the king begin to speak. The chief's job, Mandela said, was not to tell people what to do but to form a consensus. "Don't enter the debate too early," he used to say.

During the time I worked with Mandela, he often called meetings of his kitchen cabinet at his home in Houghton, a lovely old suburb of Johannesburg. He would gather half a dozen men, Ramaphosa, Thabo Mbeki (who is now the South African President) and others around the dining-room table or sometimes in a circle in his driveway. Some of his colleagues would shout at him — to move faster, to be more radical — and Mandela would simply listen. When he finally did speak at those meetings, he slowly and methodically summarized everyone's points of view and then unfurled his own thoughts, subtly steering the decision in the direction he wanted without imposing it. The trick of leadership is allowing yourself to be led too. "It is wise," he said, "to persuade people to do things and make them think it was their own idea."

No. 4
Know your enemy — and learn about his favorite sport
As far back as the 1960s, Mandela began studying Afrikaans, the language of the white South Africans who created apartheid. His comrades in the ANC teased him about it, but he wanted to understand the Afrikaner's worldview; he knew that one day he would be fighting them or negotiating with them, and either way, his destiny was tied to theirs.

This was strategic in two senses: by speaking his opponents' language, he might understand their strengths and weaknesses and formulate tactics accordingly. But he would also be ingratiating himself with his enemy. Everyone from ordinary jailers to P.W. Botha was impressed by Mandela's willingness to speak Afrikaans and his knowledge of Afrikaner history. He even brushed up on his knowledge of rugby, the Afrikaners' beloved sport, so he would be able to compare notes on teams and players.

Mandela understood that blacks and Afrikaners had something fundamental in common: Afrikaners believed themselves to be Africans as deeply as blacks did. He knew, too, that Afrikaners had been the victims of prejudice themselves: the British government and the white English settlers looked down on them. Afrikaners suffered from a cultural inferiority complex almost as much as blacks did.

Mandela was a lawyer, and in prison he helped the warders with their legal problems. They were far less educated and worldly than he, and it was extraordinary to them that a black man was willing and able to help them. These were "the most ruthless and brutal of the apartheid regime's characters," says Allister Sparks, the great South African historian, and he "realized that even the worst and crudest could be negotiated with."

No. 5
Keep your friends close — and your rivals even closer
Many of the guests Mandela invited to the house he built in Qunu were people whom, he intimated to me, he did not wholly trust. He had them to dinner; he called to consult with them; he flattered them and gave them gifts. Mandela is a man of invincible charm — and he has often used that charm to even greater effect on his rivals than on his allies.

On Robben Island, Mandela would always include in his brain trust men he neither liked nor relied on. One person he became close to was Chris Hani, the fiery chief of staff of the ANC's military wing. There were some who thought Hani was conspiring against Mandela, but Mandela cozied up to him. "It wasn't just Hani," says Ramaphosa. "It was also the big industrialists, the mining families, the opposition. He would pick up the phone and call them on their birthdays. He would go to family funerals. He saw it as an opportunity." When Mandela emerged from prison, he famously included his jailers among his friends and put leaders who had kept him in prison in his first Cabinet. Yet I well knew that he despised some of these men.

There were times he washed his hands of people — and times when, like so many people of great charm, he allowed himself to be charmed. Mandela initially developed a quick rapport with South African President F.W. de Klerk, which is why he later felt so betrayed when De Klerk attacked him in public.

Mandela believed that embracing his rivals was a way of controlling them: they were more dangerous on their own than within his circle of influence. He cherished loyalty, but he was never obsessed by it. After all, he used to say, "people act in their own interest." It was simply a fact of human nature, not a flaw or a defect. The flip side of being an optimist — and he is one — is trusting people too much. But Mandela recognized that the way to deal with those he didn't trust was to neutralize them with charm.

No. 6
Appearances matter — and remember to smile
When Mandela was a poor law student in Johannesburg wearing his one threadbare suit, he was taken to see Walter Sisulu. Sisulu was a real estate agent and a young leader of the ANC. Mandela saw a sophisticated and successful black man whom he could emulate. Sisulu saw the future.

Sisulu once told me that his great quest in the 1950s was to turn the ANC into a mass movement; and then one day, he recalled with a smile, "a mass leader walked into my office." Mandela was tall and handsome, an amateur boxer who carried himself with the regal air of a chief's son. And he had a smile that was like the sun coming out on a cloudy day.

We sometimes forget the historical correlation between leadership and physicality. George Washington was the tallest and probably the strongest man in every room he entered. Size and strength have more to do with DNA than with leadership manuals, but Mandela understood how his appearance could advance his cause. As leader of the ANC's underground military wing, he insisted that he be photographed in the proper fatigues and with a beard, and throughout his career he has been concerned about dressing appropriately for his position. George Bizos, his lawyer, remembers that he first met Mandela at an Indian tailor's shop in the 1950s and that Mandela was the first black South African he had ever seen being fitted for a suit. Now Mandela's uniform is a series of exuberant-print shirts that declare him the joyous grandfather of modern Africa.

When Mandela was running for the presidency in 1994, he knew that symbols mattered as much as substance. He was never a great public speaker, and people often tuned out what he was saying after the first few minutes. But it was the iconography that people understood. When he was on a platform, he would always do the toyi-toyi, the township dance that was an emblem of the struggle. But more important was that dazzling, beatific, all-inclusive smile. For white South Africans, the smile symbolized Mandela's lack of bitterness and suggested that he was sympathetic to them. To black voters, it said, I am the happy warrior, and we will triumph. The ubiquitous ANC election poster was simply his smiling face. "The smile," says Ramaphosa, "was the message."

After he emerged from prison, people would say, over and over, It is amazing that he is not bitter. There are a thousand things Nelson Mandela was bitter about, but he knew that more than anything else, he had to project the exact opposite emotion. He always said, "Forget the past" — but I knew he never did.

No. 7
Nothing is black or white
When we began our series of interviews, I would often ask Mandela questions like this one: When you decided to suspend the armed struggle, was it because you realized you did not have the strength to overthrow the government or because you knew you could win over international opinion by choosing nonviolence? He would then give me a curious glance and say, "Why not both?"

I did start asking smarter questions, but the message was clear: Life is never either/or. Decisions are complex, and there are always competing factors. To look for simple explanations is the bias of the human brain, but it doesn't correspond to reality. Nothing is ever as straightforward as it appears.

Mandela is comfortable with contradiction. As a politician, he was a pragmatist who saw the world as infinitely nuanced. Much of this, I believe, came from living as a black man under an apartheid system that offered a daily regimen of excruciating and debilitating moral choices: Do I defer to the white boss to get the job I want and avoid a punishment? Do I carry my pass?

As a statesman, Mandela was uncommonly loyal to Muammar Gaddafi and Fidel Castro. They had helped the ANC when the U.S. still branded Mandela as a terrorist. When I asked him about Gaddafi and Castro, he suggested that Americans tend to see things in black and white, and he would upbraid me for my lack of nuance. Every problem has many causes. While he was indisputably and clearly against apartheid, the causes of apartheid were complex. They were historical, sociological and psychological. Mandela's calculus was always, What is the end that I seek, and what is the most practical way to get there?

No. 8
Quitting is leading too
In 1993, Mandela asked me if I knew of any countries where the minimum voting age was under 18. I did some research and presented him with a rather undistinguished list: Indonesia, Cuba, Nicaragua, North Korea and Iran. He nodded and uttered his highest praise: "Very good, very good." Two weeks later, Mandela went on South African television and proposed that the voting age be lowered to 14. "He tried to sell us the idea," recalls Ramaphosa, "but he was the only [supporter]. And he had to face the reality that it would not win the day. He accepted it with great humility. He doesn't sulk. That was also a lesson in leadership."

Knowing how to abandon a failed idea, task or relationship is often the most difficult kind of decision a leader has to make. In many ways, Mandela's greatest legacy as President of South Africa is the way he chose to leave it. When he was elected in 1994, Mandela probably could have pressed to be President for life — and there were many who felt that in return for his years in prison, that was the least South Africa could do.

In the history of Africa, there have been only a handful of democratically elected leaders who willingly stood down from office. Mandela was determined to set a precedent for all who followed him — not only in South Africa but across the rest of the continent. He would be the anti-Mugabe, the man who gave birth to his country and refused to hold it hostage. "His job was to set the course," says Ramaphosa, "not to steer the ship." He knows that leaders lead as much by what they choose not to do as what they do.

Ultimately, the key to understanding Mandela is those 27 years in prison. The man who walked onto Robben Island in 1964 was emotional, headstrong, easily stung. The man who emerged was balanced and disciplined. He is not and never has been introspective. I often asked him how the man who emerged from prison differed from the willful young man who had entered it. He hated this question. Finally, in exasperation one day, he said, "I came out mature." There is nothing so rare — or so valuable — as a mature man. Happy birthday, Madiba.

Written By Richard Stengel for TIME Magazine.

Thursday, January 07, 2010

Agri Debri

The new system of presenting inflation data of primary articles and fuels separately on a weekly basis introduced by the Government with effect from November 5, 2009, has brought the relentless price fever in food articles to the fore. The wholesale price index (WPI) of food items that had shot up to 13.39 per cent for the week ended October 24 has been scaling new highs week after week. It surged to 19.95 per cent for the week ended December 5, 2009.

Though the food price inflation had eased a bit to 18.65 per cent for the week ended December 12, it again climbed to 19.83 per cent for the week ended December 19.

Thus, the new system of presenting the WPI for food articles and fuels separately on a weekly basis is proving to be a huge embarrassment for the Government. What is even more worrisome is the fact that even these indices relate only to the wholesale prices; the retail prices are much higher.

Indications are that if the raging food price inflation is not controlled, it may spill over to manufactured products and derail the ongoing economic recovery.

In fact, the prices of processed food products and some of the other products have already been marked up increasing the hardship of the poor and middle-class further.


What is all the more disappointing is the utter failure of the Government on the supply management front. While the production of food items did suffer a setback following the drought in many parts of the country and subsequent floods in some parts, the prevailing shortages in the marketplace are far in excess of the production shortfalls.

Both the Central as well as the State governments failed to strengthen their distribution networks even after knowing the impending production shortfalls following the deficient rainfall. The stocks of foodgrains totalling 233.88 million tonnes were sufficient to ensure supplies at affordable prices to consumers. But the authorities unduly delayed unloading the stocks in the open market and rein in the surging prices.

In the case of sugar, despite reports of an impending shortfall in domestic production, the Government had initially allowed exports of the commodity in 2008-09. Then it had to go in for imports of raw and refined sugar following a production shortfall to the tune of 700,000 tonnes when international prices had soared. Not surprisingly, the price of the commodity zoomed from Rs 16 a kg two year ago to Rs 40 now in retail markets.

Meanwhile, there have been reports of large-scale hoarding of foodgrains, pulses, sugar and other essential commodities by the middlemen and wholesale traders in anticipation of further escalation of prices. With regard to fruits and vegetables also, malpractices of the middlemen are rampant.

There are wide variations between wholesale and retail prices of commodities such as rice, pulses, potatoes and onions, and also vegetables. The unfortunate part is that the high price paid by the consumer is not reaching the farmer and the vegetable grower; they get only a fraction of this for their produce. The huge difference between the wholesale and retail prices is pocketed by the middlemen.

While on an average, the variation between the wholesale and retail prices is 100-150 per cent, in the case of certain commodities, it is as high as 300-400 per cent. What is even more shocking, the politicians, local bureaucrats and police are said to be in league with the middlemen and black-marketers.


In the short-term, some of the measures suggested by the Parliamentary Standing Committee on Finance could be implemented forthwith. These include: a comprehensive food pricing and management policy; stern enforcement measures to curb hoarding and speculation; ban on diversion of cultivable/agricultural land for industrial purposes, including SEZs; and creation of adequate buffer stocks of essential commodities.

Among other measures, serious efforts would be needed to ensure: (a) eased contract farming rules and retail reform aimed at giving farmers a direct access to markets by eliminating the middlemen wherever possible; (b) greater official encouragement for setting up of cold storage facilities and agro-processing units; (c) promoting local markets and integrated food value chains connecting farmers to processing units and big retailers; and (d) amending the Essential Commodities Act to effectively check hoarding and speculation.


Over the longer term, serious efforts are needed to address the food security concerns on a war footing. The earlier concerns relating to food security have only increased now with the sharp jump in the food price inflation which has pushed millions more below the poverty line. In fact, the deficient rainfall in 2009 is only a proximate cause of the soaring food prices.

The real worry is the more serious problems of persistence of low productivity in Indian agriculture in recent years even as the demand for foodgrains and other essential commodities has been growing with the increase in population as well as the rising purchasing power of the people. As it is, already there is widespread malnutrition in the country and any failure in stepping up agricultural growth in the coming years will have serious consequences.

Unfortunately, importing foodgrains and other agro products will not be a feasible option even if the other sectors of the economy do exceedingly well and the country's GDP keeps growing at 8-9 per cent per annum. For the available supplies of food items in the world markets have been dwindling and the entire world is facing food shortages.

The number of hungry people in the world topped one billion in 1999, according United Nation's Food and Agriculture Organisation (FAO).

Against this backdrop, boosting domestic farm output should receive top priority. The Prime Minister, Dr Manmohan Singh, has already said that the country needs to sharply increase public spending on agriculture, particularly on irrigation and technology in order to raise farm output. India's Eleventh Plan, which began in 2007, aims to double annual agricultural growth to 4 per cent. Achieving this target should now receive much greater attention.

Special efforts and focused attention are needed to complete all the ongoing irrigation projects at the earliest. Adoption of better water management practices, including drip irrigation and a change in the cropping pattern where necessary, could go a long way in providing a much-needed boost to agricultural production.

The Hindu Business line - 1/8/09

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