In the continued attempt to understand the system that operates in India, I would like to initially take the public distribution system (PDS), after looking at the poor performance of the same, and the infinite problems and irregulations happening in the system, I am thinking based on my passion and experience in art/artifacts auctioning system, which I could see some relevance to come as solution for this. This can be a complete nonsense, but as a citizen and as patriotic Indian I have the right to think a system that will benefit my country and open the same for discussion with like minded people.
In the art auction system, they is always a demand and there is always a supply. There are times supply is more and demand is less and vice versa. But an auction house manages these beautifully to make sure every time there is an auction, neither the buyer or the seller looses. There Reserve prices are adjusted, or there are open auction or there are stand sale before auction, but the buyer and the seller is protected in this auction process. Even though its not purely related, the last line buyer and seller protection is actually not there in current system (when I mean buyer, its consumers and seller is farmers – its always the govt and the middlemen take the profits making both buyer and seller suffer)
Lets actually start the idea with the agricultural produce, because thats the one which is either wasted in bulk or artificial scarcity is created in bulk.
If government is thinking and seeking pvt partnership for projects where they want to earn money, without bothering the troubles that common man faces like extension of residential communities in the Highway which inturn makes common people to pay toll charges for going to their own houses. we can list a lot of things which are ridiculous, but lets focus on the topic of discussion. Why not government have a partnership in assisting farmers in production, instead of just taking an arms length distance.
According to me Governance is not just taking ownership of credits, its also taking responsibility of failures. This can only happen when they directly know whats happening in the downfield. If India is in need of say 100mn tonnes of grains in any specific year, then its governments responsibility to make sure that is produced. This can be divided into corporations, districts, panchayat, taluk etc.. By this one thing becomes completely clear, the produce is guaranteed. This cannot be state managed, even though the production is done in each states. This has to be centrally managed without any distinction between states.
By this, the entire produce would be bought from farmers by this central system through distributed collection centre. There has to be a system by which farmers transaction should not be considered a one time sale, but a continued relationship. By this step, we can stop the suicide of farmers IMMEDIATELY. They will be eligible for a monthly amount which would be adjusted during their produce sale or it would be considered a deemed loan. In conjunction with my previous point, if the central PDS system make sure suitable agricultural officers are put accountable to make sure the produce target is achieved, this loan can be easily remitted during the sale of the produce.
Each state should come up with a produce needs for every year, and they should inturn buy the same from the central PDS system. By this what is happening is that accountability is completely fixed, if any state is short of produce, there is a complete visibility of who screwed up.
There can be private players in market for the basic personal produce, but the rate of these cannot be higher than certain percentages because of just the brand. Vegetables/fruits are good examples for such atrocious differences in prices. Brand cost cannot exceed a % agreed by the central PDS. The State government can fix a rate and also auction it for the private players in respective states. Again, putting the governance in place as state government would be clearly accountable. If this central system is followed, there will be very less differences in the price of the products across states.
THIS IS VERY IMPORTANT – Export Licenses will be given only after making sure that entire domestic demand is met and adequate stock is available to make sure next 12 months there would not be any demand rise with less supply. Further, Exporters would buy from the central PDS system and not from individual market to get their produce and ship abroad. If they own their own land and do their own produce, they would have to give % of their produce to the domestic demand as a royalty paid to the central PDS, in the same quality as they would be sending to the Export. If there is difference in quality level or if rotten products are dumped for domestic need, export license has to be canceleed Immediately, even if some shipment of theirs are in sea.
The retailing can happen not just in the Ration shop, but also through cooperative society or even state government can start retail stores and earn money (instead of earning from TASMAC Shops) which can be used to pump back to state reforms. IF TASMAC can give them thousands of crores, I can guarantee even this can generate same amount of money. But if they go this way, the local vendor’s business will be affected. Hence they can ofcourse follow a procedure of licensing or forming part of some association where in all the retailers BIG to SMALLEST will be form of this association and they will render their services equally without any fear or favour.
Putting the entire ONUS of attention on the PDS System (Which should be run like a logistics company, from procurement to sales), Every person in this country should be given a fair chance to buy their food, to the level of affordability. If there is any unhealthy raise in the price of basic produce, then teh central PDS system has to be caught and questioned.
This model when thought for any of our grocery or consumable produce can be accomodated and accountability can be set to the most precision point possible.
Hope there is a beginning in some form in my idea. Be free to put your point so that we can start a useful discussion to see if we can give ideas for a sustaining model to prevent food inflation (atleast)