INDIA'S FOOD PROBLEM

Summary

Delivered on 30th October 1973 as the Eighth A. D. Shroff Memorial Lecture and published by the Forum of Free Enterprise, B. R. Shenoy’s lecture argues that India’s January 1972 decision to forego PL 480 and other concessional foodgrain imports was a debacle on par with the 1962 military reverses on the northern frontier. He reconstructs how three years of good harvests, a wheat break-through and an 8.1-million-tonne stock cushion bred a misplaced optimism that collapsed when the 1971-72 harvest failed, procurement fell, public-distribution offtake rose and Bangladesh’s food crisis forced a 909,000-tonne export — leaving closing stocks at the end of 1972 at just 3.4 million tonnes.

Shenoy then sets out the 1973 arithmetic — a roughly 13.2-million-tonne offtake against an 11.7-million-tonne supply — to show that imports of 8.9 million tonnes are unavoidable if reserves are to be kept intact, yet balance-of-payments weakness makes commercial purchases impossible. He treats the Soviet loan of two million tonnes as itself a concessional import, and reads the episode as proof that India’s two-decade reliance on imports is structural, that per capita consumption sits below the nutritional norm and that domestic ‘buffer’ procurement is mere pipe-line stock — what Rajagopalachari called transferring blood from the right arm to the left.

The positive programme is twofold: zero-inflation budgets (since inflation is a monetary phenomenon that cannot be cured by lathi charges, raids on grocers or price-control edicts) and the urgent revival of PL 480 and other concessional imports while the green revolution matures. Shenoy closes the rendered portion with a survey of the scope for expanding production — citing the Mysore survey, ICAR’s J. S. Kanwar on HYV-plus-fertiliser yield gains, and Nehru’s 1948 call for self-sufficiency — arguing that even a six per cent rise in output would wipe out the market deficit and turn India into a foodgrain exporter.

Key points

• Frames the January 1972 decision to end PL 480 and other concessional imports as a self-inflicted debacle ‘perhaps even more so than the military reverses on our northern frontiers in 1962.’

• Reconstructs the slide from a 1970-71 peak output of 108 million tonnes and 8.1-million-tonne stocks to a 3.4-million-tonne closing stock at end-1972, driven by a bad 1971-72 harvest, falling procurement, rising offtake and 909,000 tonnes exported to Bangladesh.

• Computes the 1973 supply gap: against an offtake projected at 13.2 million tonnes, total availability is 11.7 million tonnes, leaving imports of 8.9 million tonnes necessary to keep reserves intact.

• Argues that balance-of-payments weakness — continuous IMF indebtedness since 1948 and sharply higher world wheat prices — makes commercial purchases impossible, so the USSR’s two-million-tonne loan is itself a concessional import.

• Dismisses domestically-built ‘buffer’ stocks as a mere transfer of pipe-line inventory, quoting Rajagopalachari’s image of transferring blood from the right arm to the left.

• Diagnoses inflation as a monetary phenomenon and prescribes zero-inflation budgets in the hands of the Minister of Finance, rejecting lathi charges, raids on grocers and price-control edicts as remedies for hoarding.

• Documents a chronic nutritional deficit — 1972 cereals shortfall of 16.65 million tonnes (20.3 per cent of domestic production) and a 52.8 per cent deficit in pulses — to argue that imports are a high-priority social obligation, not an embarrassment.

• Maps the scope for expanding output by citing India’s low per-hectare yields against world averages, the Mysore survey on better seeds and rotation, and ICAR’s J. S. Kanwar on controlled fertiliser dosages with HYV seeds.