India’s Grain Drain

At a time when UNICEF says 43 percent of Indian children under five are underweight and over 3,000 die every day from malnutrition-related illnesses, the country stands out for its glaring lack of food storage facilities, leading to colossal wastage.

Stories are rife of millions of tonnes of farmers’ grains stored in outdoor depots across the country, vulnerable to rodents, moisture, birds and pests. Added to that is the fact that the country’s distribution system is so deficient that widespread malnutrition can exist side by side with bulging grain depots.

India is one of the world’s top producers of food grains and a formidable exporter of rice – the world’s biggest – but paradoxically it also leads the tally of nations with the maximum number of starvation-related deaths. A new industry study states that 20-30 percent of India’s food grain harvest is wasted annually due to poor storage facilities.

The Associated Chambers of Commerce and Industry of India points to inadequate storage capacity, regional imbalance in warehouses, lack of adequate scientific storage and inefficient logistical management as the leading causes. The warehousing capacity for major food grains available in India, in public, co-operative and private sector, say agriculture analysts, is more than 112 million tonnes.

However, there is an extreme dearth of about 35 million tons of warehousing capacity and a massive food grain storage shortfall of about 8 million tons in the country to be filled by 2017.

“India needs to recalibrate its strategy to mitigate the challenges of high food grain wastage due to lack of scientific storage facilities,” according to the associated chambers.

While recent advances in agricultural technology have facilitated higher grain yields, the lack of commensurate attention to storage facilities nixes farmers’ efforts, leading to a snowballing effect on food prices and starvation.

Ironically, while the Indian government keeps buying food grains from the farmers, it doesn’t have space to store it. The state-owned food buying agency – the Food Corporation of India – is plagued by deficient modern grain storage facilities.

In 2013, officials estimated that 6 million tonnes of India’s grain worth US $1.5 billion were rendered inedible due to spoilage.

"For the last 30 years, the storage capacity for grains has not been upgraded at all in India," says Dr. Subbu Rao, an agriculture economist, formerly with the United Nations.

Entrenched corruption only makes things worse. Stories of distributors mixing rotting grain with fresh grain and selling it on the market are legion. Hundreds of government officials are also known to redirect billions of dollars worth of grain away from the poor and into local and global markets.

Bureaucratic apathy is hard to miss. In 2010, when the Supreme Court directed the government to give grain to the hungry for free rather than let it rot, state governments ignored the request or only distributed grain with low, subsidized prices to people with ration cards.

A senior official of the federal government’s Warehousing Development and Regulatory Authority told Asia Sentinel that 13 percent of gross domestic product is wasted each year because of the wastage of food grains in the supply chain.

“We waste the amount equivalent to what Australia produces annually. Wastage of fruits and vegetables is even higher than grains,” he added.

To reduce the spoilage, the Food Corporation opted to export wheat. But India also needs to store grains for the starving, literally for a rainy day as it is a monsoon-dependent agrarian economy.

Total foodgrain production in India stands at around 255 million tonnes which includes around 105 million tonnes of rice (milled basis). In 2012, the government claimed that the state FCI, has reduced wastage of foodgrains from 2.5 percent five years ago to 0.006 percent in 2012 despite 150 percent growth in foodgrain stocks during the period.

The Food Minister had called the reduction in wastage a major achievement of the FCI. According to ASSOCHAM, about 70 percent of warehousing space in India is owned by government agencies.

Food grain wastage is also detrimental for environmental, ethical and economical reasons. According to the UNEP, global food production occupies 25 percent of all habitable land and is responsible for 70 percent of fresh water consumption, 80 percent of deforestation and 30 percent of greenhouse gas emissions. When food is wasted, so are the resources and the efforts in producing it. Hence, controlling food wastage will organically reduce food requirements and the inputs that go into its production.

The UPA-led government fought tooth and nail last year to push through a controversial food security bill despite strident criticism that it would give two-third of Indians a legal right to affordable food. However, experts rubbish the move as political gimmickry, a ploy to harvest votes for the general elections.

“The scheme is mined with the same usual pitfalls of corrupt officials diverting food grains for money,” said Vibha Sharma, an activist who works with a Delhi-based NGO. Besides, the government can ill-afford a plan costing as much as US$12 billion in additional subsidies a year when the economy is sputtering, she adds.

Studies point out that at least 12.5 million people could have been fed if India had better food storage facilities. A dilapidated food storage infrastructure continues to result in high wastage of food grains in a country which, by one count, has 200 million food-insecure people.

Agriculturists say food wastage can occur anywhere in the food supply chain—production, processing, storage, transportation and consumption. Bad post-harvest management and insufficient infrastructural facilities further compound the problem. As opposed to China, which has a grain storage capacity of 150 million tonnes, India can boast of warehouses only a third that amount. The country is thus in dire need of upgraded food storage and transportation facilities as well as measures to plug its leak-prone food supply chain.

Though the per capita food wastage by consumers is low in India compared to developed economies, 70 percent of Indians live on less than US$ 2 a day and don’t contribute to this wastage.

The real reason for food waste, as pointed out by the Indian Institute of Public Administration in a report, are social gatherings where rising economic affluence makes people indulge in ostentatious behavior. Also, celebrations of a plethora of festivals in India, coupled with lavish weddings, inevitably lead to humungous food wastage.

However, some sporadic measures have been taken to curb food wastage and spoilage of grains. Under the Private Entrepreneurs Guarantee (PEG) Scheme, covered storage facilities will be provided to farmers store the grains. Help of the private sector is also being sought.

Warehouses constructed under this scheme will be hired by the Food Corporation of India, which will provide return on investment to the private businesses. The World Bank’s International Finance Corporation (IFC) has also stepped in for help; a modern warehouse with storage capacity to store 50,000 tonnes has also been constructed and will be operated by a private company.

Be that as it may, analysts recommend more sustainable measures to plug the supply leakage and deterrents to wastage of food at festivals and weddings.

Out-of-the-box crop production methods also need to be pushed along with diversifying farmers’ grain basket. To grow 1 kg of rice, over 2,500 liters of water is needed. But millet can get by with only five to 10 liters. Campaigns to consume indigenous and fresh produce – rather than imported produce (an increasing trend in Indian homes and restaurants) -- would support local farmers as well as whittle down food miles, say experts.

Neeta Lal is a Delhi-based senior journalist;