A seemingly paradoxical situation prevails in India as regards domestic consumption of rice and
wheat, the two main staple cereals. Domestic demand is being met, exports continue and the FCI is finding it difficult to ‘unload’ its large stocks. At the same time, despite the FCI’s public distribution system (PDS), substantial sections of the poor (both rural and urban), in certain states, are not getting adequate amounts of cereals to eat. Several reasons account for this:
First, the very poor do not have sufficient cash income to buy the food in the quantities they need, i.e. their ‘need’ does not translate into ‘demand’ that manifests itself ‘as the ability to pay the prevailing market price’;
Second, the poorest in the rural areas tend to be either landless or have too little land, making it impossible to grow the amounts of food they need;
Third, retail sales prices in the PDS-retail outlets cannot be lowered below the guaranteed minimum procurement prices that the FCI is obliged to pay the farmers;
Four, corrupt officials collude with traders in ‘capturing’ the grain meant for the most vulnerable and helpless in society (e.g. the tribal peoples).
