Friday, December 28, 2007

PDS menace and a plausible solution !

I recently came across a really inspiring editorial in TOI by Ajai Nair and Parmesh Shah, and thought if this could be viable in Arunachal to curb the Public distribution system(PDS)menace, that has been utter failure in AP, to serve its intended purpose of ensuring food security for poor people, and we Arunachal certainly have lot of these kind(read poor).

I once discussed with a friend of mine what could be the possible avenues or business a person or enthusiastic entreprenuer could jump start with in AP ?
Well, the prompt reply was PDS business.

And Atleast, present scenario of AP certainly supports the business that really sees exchanges worth lakhs, and no wonder, we have scores of budding Crorepatis who have solely been successful because of these PDS contracts.
But, would one call it an ethical business ?
And if its really a business in its actual sense ?

Few months back, last June(or July), I was actively involved with AIMSU(All Idu Mishmi Student Union)for its movements against the plagued PDS system.
The Whole of Lower Dibang valley's ration card holders were looted of their subsidised wheat, rices and other essential commodities that Central government sends it through FCI(food corporation of India).

But, despite our two strikes, calling whole District Bandh, we haven't had good results that would have appeased common people who were subjugated to the apathy of the corrupt officials in connivance with the PDS contractors.

Our demand of cancellation of guilty PDS contractor's licences, despite grounding evidences have not been met.
And i guess, till date, the same PDS contractor supplies.

Well, this is where we as Indians, or as an Arunachali fails. We, subside back before the movements can fetch its results, Well, these has more to do with the political pressures, each of us are unconsciously or sub consciously wired to.

Maybe, the solution to such menaces lie in peoples participation.

To enable poor people to become food-secure there is a need to look beyond PDS. A few ongoing initiatives that involve self help groups (SHGs) and their associations merit wider attention.
Over 16 lakh SHG households in 7,000 villages in Andhra Pradesh participate in an initiative that helps SHGs aggregate rice requirements of households and make bulk purchases from the open market and the PDS. This programme was developed since it was found that households depend on the market for 70 per cent of their rice requirements. PDS was only meeting the remaining 30 per cent. The programme is implemented by SHGs and their federations under a state-wide poverty reduction project funded by the World Bank.

The system functions as follows. SHGs prepare an intent based on the expected rice requirement of their members for one, three or six months. The association of SHGs in a village then prepares a consolidated village intent for the SHGs participating in the programme. The association’s procurement committee then conducts a market scan, negotiates prices, and places an order. When rice is available in the ration shops, the association also purchases in bulk from the ration shop.

The distribution committee packs rice into individual packages and distributes the rice to SHG members. The members pay a portion of the price of rice when they receive the rice, and the remaining amount in instalments over one to six months. When some members are unable to make the payments within the specified period, SHGs provide them small loans to do so and then collect it back along with their other loans.

To finance the initial purchase, the village association of SHGs obtains a line of credit from mandal samkhyas , the mandal association of SHGs. Mandals are revenue units in Andhra Pradesh comprising a population of around 80,000. The mandal samkhyas have a corpus created by project grants and profits generated by using the grants as a general loan fund.

During the period from March 2005 to April 2006, the SHG associations purchased and distributed 300,000 tonnes of rice costing around Rs 370 crore. The programme meets all its costs by charging a margin over purchase costs and generates a surplus. Yet, it is able to make rice available at a cheaper price than that available from the local store. An impact assessment also found that the programme enabled most participants become food-secure for the full year, increase uptake from PDS, and increase household rice consumption by 25 per cent. Some SHG associations have expanded the programme to include more commodities: pulses, oil and condiments.

The programme is evolving from being a rice credit line to a food security credit line. Seeing the financial viability of the programme, commercial banks such as the Andhra Bank and the State Bank of India have provided lines of credit to some village associations.

The Andhra Pradesh experience demonstrates the potential of market power gained when poor people aggregate their buying power and have an institutional mechanism to use this power. On a much smaller scale, some other states are attempting to use SHGs as PDS franchises. In Tamil Nadu, nearly 500 SHGs retail PDS commodities serving over 215,000 households.

In Orissa, PDS kerosene retailing is now done exclusively by SHGs. Over 5,600 SHGs are involved in retailing of kerosene. Quality of access in both these cases is also reported to be much better than that under the mainstream PDS.

The emergence of well-functioning SHGs and their associations in many parts of the country presents an opportunity for governments to involve these organisations in improving the effectiveness of PDS and in developing additional food security mechanisms. Policymakers need to look at the Andhra Pradesh, Tamil Nadu and Orissa examples to see how these initiatives can be adapted, scaled up, and replicated to achieve the national objective of ensuring food security for every citizen.

Hopefully we Arunachali can emulate it and .... we certainly need to reckon...



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