Why Punjab is exporting wheat and importing flour
Punjab, the food bowl of the country, is a net importer of atta. With wheat procurement touching 100 lakh tonnes this year, and with wheat stocks lying in the open for want of adequate covered storage, reports of atta being imported defy economic logic. Punjab is the biggest contributor of surplus food in the country to the Food Corporation of India (FCI).
Reading a news report in the Hindustan Times, ‘Remove existing disconnect between farmers and markets’ (July 2), what caught my eye was a statement by financial commissioner development, Suresh Kumar, wherein he said that “despite being the food bowl of the country, we are a net importer of wheat flour (atta).” He was addressing an outreach programme for agro and food processing industry in Chandigarh.
FLOUR FROM MP
I had always feared this. Knowing that most urban households in Punjab opt for atta from Madhya Pradesh, which is generally perceived to be devoid of chemical pesticides and fertilisers, there were enough reasons to believe that Punjabis were relying more on atta imports. The MP wheat at your nearest chakki is priced around Rs 32 a kg against Rs 23 a kg for the Punjab wheat and yet the market for MP’s Sharbati wheat is growing. There is also a huge demand for packaged and branded atta which, too, is largely coming from outside.
Whatever the reasons, the fact that Punjab had relied more on import of atta to meet the basic food needs of its people points to a lopsided industrial development policy. Forty-five years have passed since Punjab took the lead to usher in the Green Revolution, and still failed to provide incentives to create adequate processing facilities. There used to be more than 400 flour mills, of which hardly 60 to 62 are operational now.
If only Punjab had created adequate processing facilities, both in small and large scale, it could have not only reduced the burden of carrying excess stocks year after year but also cut on resulting environmental costs besides generating employment. The unnecessary transportation of food adds on to food miles, a term that denotes the distance food travels before it reaches your table. Some years back, the FCI had estimated that food travels roughly 1,500 km before it reaches a distant household. By allowing wheat to unnecessarily criss-cross across borders only adds to unwanted food miles and thereby multiplies costs.
Well-known economist Dr SS Johl had sometimes back calculated that the by exporting 18 million tonnes of wheat and rice from Punjab in 2003-04, the state actually exported 55.5 trillion litres of water. On an average 3,000 litres of water is required to produce 1 kilo of wheat. Localisation of environmental costs, therefore, is very important, especially at a time when all studies point to a bleak water future for the grain bowl. Also, food processing industry as a policy imperative must be set up in and around the production areas.
At the national level, most of the wheat-processing mills are situated in southern India whereas wheat cultivation is confined to northern and central regions. It is primarily for this reason that there is a growing demand from food processing industry to import wheat from Australia and Europe. The landed price of imported wheat in Chennai for instance is much cheaper than the wheat transported all the way from Punjab.
This year, the food processing industry has already contracted for imports of 500,000 tonnes of wheat from abroad. The proposed ITC wheat processing unit in Punjab having a capacity of one million tonnes is, therefore, a welcome initiative. More such wheat processing units are required.
REDIRECT POLICY FOCUS
Since consumer demand is gradually shifting towards safe food, if the increasing demand for MP atta is any indication, Punjab also needs to redirect its policy focus. Not only urban consumers, even farmers are known to keep aside a patch of their land for their own consumption in which they don’t douse the standing crops with chemical pesticides and fertilisers. By encouraging people to buy chemical-free wheat grown within the state, Punjab will considerably lessen its burden of carrying stocks. I have two suggestions.
Punjab must identify and encourage farmers to shift to non-chemical farming. This should be considered as part of the crop diversification strategy. Like a compensatory package of Rs 4,000 per acre to those who volunteered to shift from paddy to maize, Punjab should provide Rs 4,000 per acre to those farmers who shift from chemical to non-chemical farming systems.
Since it takes 3-4 years and even more for any chemically farmed land to get the status of organic, the need is to market the produce as pesticide-free in the initial years. Much of the MP wheat that is sold in Punjab is just on faith and goes by the claims of chakki owners. People are not looking for organic certificates.
The task, therefore, is to begin rather than debate on how to provide for certification. Newspaper ads inviting consumers who want pesticidefree wheat to pay an advance fee is another way that has been successfully tried at a number of places.