Tuesday, July 7, 2009

There's a hole in the bucket

There’s a children’s song which goes like this:

There's a hole in the bucket,
Dear Liza, dear Liza
There's a hole in the bucket,
Dear Liza, there's a hole.

Then fix it, dear Henry,
Dear Henry, dear Henry
Then fix it, dear Henry,
Dear Henry, fix it.

Hary Belafonte and his wife used to often enact the roles of Henry and Liza live on stage. I’d first heard this song as a small kid in our old gramophone on one of those 78 RPM discs. Little did I know that a bucket with a hole is indeed a very important thing. Within a few years the bucket with a hole came back in the maths book. I used to really dread those maths problems where we’re asked to calculate how long it would take to fill a bucket which has a hole. I used to always wonder who on the earth would like to fill a bucket with hole? Isn’t it much more efficient to first fix the hole, as told by Henry, and then fill it? There were certain sums where the bucket wouldn’t be filled at all because the rate at which the water drained out of the hole used to be higher than that of filling.

Times have passed. Gone are the days of those gramophones and Hary Belafonte and the maths of ‘hole in the bucket’. But the bucket never sank into oblivion. It’s there everywhere around me. And very much like the tougher problems where the bucket would drain out totally, the buckets around me also seem to be in a state of perpetual drain-out. More interesting is the fact that people are ready to pour more and more water in the bucket, but not ready to fix the hole.

According to
reports, a fresh estimate from the ministry of food processing says a whopping Rs 58,000 crore (close to USD 1.5billion) worth of agriculture food items get wasted in the country every year.

In 2008 India produced 230 million tonnes of food grain and converted itself from a net importer to net exporter in the sector. Even though India is second in tropical fruit production after Brazil and in vegetable after China, the farmers over here do not get proper price for their produce. “The reason is we cannot process and preserve more than 10-15 percent of our production. It perishes. Else farmers sell it at throw-away prices” – that’s what Pranab Mukherjee has
reportedly told very recently.

The government has issued a total of 223 million ration cards against a total estimated 180 million households. In other words, there are at least 43 million ghost cards.

According to published reports, The Planning Commission says, adding that “leakages” are common – higher than 75 per cent in Bihar and Punjab. During 2003-04, it estimates that eight million tonnes of food grains out of 14 million allotted to BPL families never reached them. “For every 1kilogram that was delivered to the poor, Government of India had to issue 2.23 kilograms” of food grains.

There is no comprehensive estimate about the exact figures of the leakages. But there’s no doubt that much of the food problem and poverty can be tackled if some Liza fixes these leaks. The recent budget presented in the Lok Sabha yesterday has gone gung ho over the various bucket filling strategies like National Rural Employment Guarantee Scheme and Antyodaya Anna Yajona. Many populist measures like Rs 3/kg rice to BPL families, free power and loan waiver are also in the plate - all these at a point when the fiscal deficit of our country is close to 10% (including the deficit of the states) of our GDP. No one is saying that filling the bucket is a bad thing. But isn’t it more efficient to first fix the hole in the bucket and then fill it with what ever you like?

To fix the 'hole' small NGOs may not be the solution because it would take ages to cover the full country. Government alone has to do this with the help of private partnerships. Things that we need immediately are:
  • Much better food storage facility so that bulk of the perishable fruits and flowers and vegetables are not wasted daily. Our Finance Minister Mr. Pranab Mukherjee has recently pointed out that we need a revolution in Food Processing. Yes, we need that more than many other things.
  • Much better retail chain that gets rid of the innumerable middle-men. The gap between the farmers and the end buyers should come down so that farmers can get higher sale price and buyers lower retail price. This has a positive effect on the standard of living of the farmers because they are also buyers of farm products produced by other farmers. Multi nationals like Metro Cash and Carry, Reliance etc should be encouraged in this area. The story of millions losing jobs due to these multi nationals is a political myth propagated by people with vested interests. Detailed studies have shown that the people who would be mostly impacted are the middle men, who have been exploting the poor farmers since ages. The small grocery store owners can be absorbed into the big retail chains in various roles. Even the middle men can also be absorbed - but they can't exploit the poor farmers any more.
  • Much better infrastructure - good roads across the width and breadth of the country so that perishable farm products can reach markets in much faster time.
  • Better yield of farming through corporate farming of large tracts of unfragmented lands. Swaminathan Anklesaria Aiyar had once pointed out that even with their full throttle Reliance and its likes can cover only 2% of the existing farm lands of our country. There's space for hundred more Reliances and ITCs.
  • Better delivery of government aids. Using Smart Cards like National ID has a great role to play in. As pointed out earlier, leakages” are common in this respect– higher than 75 per cent in Bihar and Punjab.
The public expenditure required in all these can be used for schemes like NREGS. Each of these activities will save government from the wasteful gimmicks like Rs3/kg rice. Similar thought process can really help us in this moment when our fiscal deficit is touching 10% of GDP.

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