Friday, September 7, 2012

India’s poor hungry while storehouses bulge


India is one of the main stumbling blocks to reaching a new World Trade Agreement in the Doha Round of negotiations aimed at addressing the needs of the world's poorest farmers in the world's poorest countries.

India demanded more concessions from Europe, the United States, Canada, Japan and Australia, and refused to lower its barriers to imports of manufactured good and services from those countries.

Now Bloomberg news service has written an article about rampant corruption in India's food-aid program. In other words, India ought to be cleaning up its own act while it pleads for more help from other nations.

Storehouses are bulging with food aid, yet steps away people are starving in India, says the report by Bloomberg news service.
The report says it’s the fault of corrupt politicians who steal about $14.5 billion of food a  year.

Police don’t arrest them and courts don’t punish them because society in Uttar Pradesh is corrupt, says the news agency.

“A state police force beholden to corrupt lawmakers, an underfunded federal anti-graft agency and a sluggish court system have resulted in five overlapping investigations over seven years -- and zero convictions,” Bloomberg says.

India has run the world’s largest public food distribution system for the poor since the failure of two successive monsoons led to the creation of the Food Corporation of India in 1965. 

The government last year spent a record $13 billion buying and storing commodities such as wheat and rice, and expects that figure to grow this year.

Yet 21 percent of all adults and almost half of India’s children under 5 years old are still malnourished. About 900 million Indians already eat less than government-recommended minimums. 

As local food prices climbed more than 70 percent over the past five years, dependence on subsidies has grown.

From the government warehouses, millions of tons are dispatched monthly to states including Uttar Pradesh, which are supposed to distribute them at subsidized prices to the poor. About 10 percent of India’s food rots or is lost before it can be distributed, while some 3 million tons of wheat in buffer stocks is more than two years old, according to the government.

Even after accounting for the wastage, only 41 percent of the food set aside for feeding the poor reached households nationwide in 2005, according to a World Bank study commissioned by the government and released last year.

In Uttar Pradesh, where the minister of food stands charged with attempted murder, kidnapping, armed robbery and electoral fraud, the diversion was more than 80 percent in 2005, the World Bank report said.

All of the food meant for the poor in Kishen’s home district – “100 per cent” - was stolen during a three-year period, according to India’s Central Bureau of Investigation, the country’s leading anti-corruption agency.

Simply reforming world trade will not address these challenges in India. Cutting subsidies and trade barriers in Europe, Canada and Japan won't clean up corruption in India.