Everyone loves a Good DROUGHT

Both home and world prices greeted the news of drought by moving up. Will the government rein in the profiteering market forces and 'relief bureaucracy' that loves every drought as a boon?
Kamal Nayan Kabra Delhi

Widespread droughts or emergency policy responses they evoke increase miseries and deprivation that push back millions of people by several years, if not decades. Surely, they are not new or a one-time episode. Their frequent recurrence is not simply a matter of the largely unpredictable nature of monsoon rains. Both market forces and public policy response contribute liberally to the mass misery and its persistent accentuation in India.

Huge outlays on various disaster schemes or programmes to insulate the economy from the ill effects of natural disasters do not seem to have reduced the repercussions. We are inundated with assertions that the government is fully geared up to fight the drought. With our past experience, huge food stocks, foreign exchange reserves and NREGA already in operation, no one will be allowed to die of hunger, we are told.

Yet, there are reports of starvation deaths from Bihar. Andhra Pradesh has confirmed suicides by 70 farmers unable to survive the drought close on the heels of an intense farm sector crisis. In Maharashtra, farmers are going for distress sale of cattle. From the Bundelkhand region, there is mass exodus of youths in search of jobs to cities. There are reports of acute water shortage forcing people to use contaminated water or trek for miles to fetch a bucket.

The government is busy putting its act together to fight the drought. They are estimating the likely fall in farm output and the overall rate of growth of the economy, likely quantum of imports and depletion of food security reserves. The government is waiting to see if they have to mount open market sales of food stocks. Stern warnings are being issued to traders to desist from hoarding and profiteering.

World markets have responded to the announcement by India of its intention to import by jacking up prices. It is apiece with the response of the markets to the prime minister's declaration that food prices are going to go up in coming days and has firmed up the inflationary expectations. The prices in the futures market went up by about 20 per cent within a few weeks and its turnover by almost 42 per cent in the last four months. Both home and world prices greeted the news of drought by moving up.

Grist to the speculative mill has been provided by the Economic Survey. According to the survey, inflation is not a matter of concern this fiscal and the unreal wholesale price index (WPI) is in the negative zone after over three decades!

The response to drought in terms of macro-level supply management and paltry relief programmes under the NREGS are contrary to the insights provided by scholars. For nearly a century, losses inflicted and problems caused by recurring drought are not gauged mainly in terms of the fall in farm output from the previous year's or the past peak. They are understood mainly in terms of loss of livelihoods (made worse owing to rising prices), imminent outbreak of hunger leading to avoidable deaths and suicides by the emaciated and malnutritioned poor, water and fodder scarcity, disappearing food stocks, premature increases in food prices, though the last harvest's food is available in the market.

The precarious economic condition of the poor is what the State has to respond to. It needs to rein in the wildly profiteering market forces and the 'relief bureaucracy' that loves every drought as a boon. Will it succeed this time?