Another Intrusion Called Cargill
Changes Food Market
By Abid Shah
30 January, 2010
Countercurrents.org
NEW DELHI, JAN 22: One of the main factors behind sky-rocketing prices of food stuff all over the country has its roots in the entry given by Government to world’s certain mighty food corporations in the domestic grain market.
According to Yudhvir Singh, who is a South Asia Coordinator for Spain-based La Vieu Compesina an international body of farmers with 69 member countries, these corporations have mainly been Australian Wheat Board, Hindustan Lever and Cargill.
The last of them is US based and, somehow, it is pronounced as Kargil, says Singh, adding though it has nothing to do with “our Kargil in the Himalyas” but the Cargill did “intrude silently into the market with few others in tow for direct buying of grains from Indian farmers and together these giants could get a big say in the food market”.
“These companies bought lakhs of tonnage of wheat from most of the North from Punjab to Madhya Pradesh after two rabi harvests in April 2006 and April 2007 by offering at least Rs 100 a quintal more than the Government procurement price of Rs 650 and Rs 750 a quintal for wheat for the two years respectively. In certain cases the price offered by the companies reached as high as Rs 950 a quintal for wheat in the year 2007,” points out Singh.
Because of heavy buying by the international companies the Government procurement fell short. There was food shortage, particularly in the South. And, thus, according to Singh, Union Agriculture and Food Minister, Sharad Pawar went in for wheat import in 2006 and that too from Australia again. The imported wheat somehow turned out to be dirt and pest ridden.
Back home the Government wheat procurement authorities often graded the grain brought to collection centres and rejected some of the bags brought to it in order to direct it to private traders who waited for a bargain just at the doorsteps of the centres. A farm crisis was, thus, building up, says Singh.
This forced farmers to approach Prime Minister Manmohan Singh. Yudhvir says that in 2007 he went with a delegation of the Coordination Committee of Indian Farmers Movement as its National Coordinator to meet Manmohan Singh who listened to the critique of Government wheat procurement policy very patiently.
The very next day the Government banned wheat buying by big foreign food companies and announced a minimum support price of Rs 1,000 a quintal for wheat for the year 2008. This was done right in 2007 before the sowing of wheat had started. In the year 2009 a bonus of Rs 80 a quintal was given to farmer and, thus, wheat producers got a price of Rs 1080 a quintal.
But the bulk buying by the companies in the previous years that lasted until 2007 triggered off speculative forward trading of stocks where domestic players took over from their international counterparts of 2006 and 2007 and, thus, wheat prices went up to Rs 1700 to Rs 1800 a quintal for consumers, points out Yudhvir Singh.
As for sugar price picking up staggeringly Singh says that last year sugar mills started late. The delay caused immense lose to sugarcane growers who often had to burn sugarcane. He shares others perception about special interest of Sharad Pawar in sugar prices because of which he first predicted the possibility of rise in sugar prices leading to slowing down of the supply by traders and later saying that he was no astrologer to predict when the prices were going to come down.
As for Dal or lentils Singh says that wheat serves as a benchmark for prices of other food stuff. Once prices of wheat rise, other eatables too were bound to go up. And, moreover, since pulses mainly come from regions like Madhya Pradesh and Bundelkhand the failure of rains in these regions aggravated the price situation in case of Dals.
Overall the price situation worsened because of leaving both farmers and consumers to the mercy of traders and middlemen. And, thus, Yudhvir Singh is for urgent Government intervention to instill confidence among the farmers through policy changes vis-à-vis trading of food grains.
To prove his point he says after the Government fixed MSP for wheat in 2007 at Rs 1,000 a quintal for the year 2008, a record five million ton extra wheat production could be possible. Had the Government been able to stop wheat from being stocked for future forward trading, the price situation would have been a lot better today.
