MILLIONS of people go to bed hungry every night. Already thousands have died of endemic hunger and malnutrition in states like Rajasthan, Orissa, etc. Even in some pockets of the Kaveri irrigated belt, popularly known as 'Rice Bowl' of Tamil Nadu, there are reports of people eating rats as they cannot get any staple diet. Children and women are being sold. The worst tragedy is that the people starve while the FCI godowns, a few kilometres away, are overflowing with food stocks. 300 to 400 million Rupees are being spent daily to stock food of which 35% is rotting. In some cases, food grains are rotting because of want of storage space. The Supreme Court had to intervene and direct the state governments to ensure the right to life enshrined in the constitution. Both peasants and millions of poor are paying the price for globalisation in terms of their very lives — either through malnutrition, hunger and starvation, or through suicides. According to one estimate, more than 10,000 people have died out of hunger and malnutrition since mid 1980s.

Crores of rupees are claimed to have been sunk in to uplift the starvation death prone Kalahandi-Bolangir-Koraput (KBK) region of Orissa. Yet, no improvement is evident on the ground. Even now, Rs.200 crores is allotted for the year 2003-2004. A Long Term Action Plan for the development of KBK region was put in place in early 1990s when P.V.Narasimha Raowasthe Prime Minister. Subsequently, the UF government reduced the fund allocation for this plan. Then, with the NDA at the center and the Navin Patnaik government assuming power in the state, the fund allocation was again regularized and it was claimed to be a personal victory for Navin Patnaik. But, the very same Chief Minister had to face the wrath of people when he tried to visit the starvation victims' families. People threw mango kernels on him on his visit to the region as they were highly agitated by his cynical statement that attributed unhygienic food habits for deaths and terming mango kernel as a most desired diet of tribals.

Of late, recurrent starvation deaths have been reported from Rajasthan. The starvation deaths in Baran were brought to light by the activists of PUCL and the Supreme Court invoked provisions of Article 21, ordered that no person should go hungry because of lack of food and fixed the responsibility with the central and state governments in this regard.

Starvation and related deaths are the stark reality of our system. Ever growing unemployment, fall in rural income and the complete collapse of the Public Distribution System (PDS) are major reasons for starvation. Starvation deaths are a critique of the kulak-led development strategy advocated by the government. Thousands of crores of rupees spent for the KBK region only helped the loot and plunder by the unholy alliance of contractors, government officials and local powers. Starving tribals had to mortgage their ration cards. Foodgrains distributed to ration shops to feed the starved are finding their way back to FCI godowns, of course after filling the pockets of vested interests. The starved continue to starve and die. Yet, the cause cannot be located in bad implementation. The policies of liberalization that perpetuate inequality; that abolish the distribution system; that aggravate lack of access to food; that eliminate food security are the chief sources of the tragedy. Imperialists and their domestic agents are the chief culprits responsible for starvation deaths.

India is faced with the paradox of falling agricultural prices and rising prices of essential commodities. Even as agricultural prices are falling, retail prices of food and essential commodities are rising. Theoretically speaking, overproduction could be the cause of falling prices and scarcity could be the cause of rising prices of essential commodities. But we neither have the problem of overproduction nor scarcity. This is the direct outcome of World Bank and WTO dictated economic policies and trade liberalization policies that have removed price controls. In fact, production has actually declined. Yet, the godowns are overflowing because of government policies of allowing heavily subsidized cheaper imports to compete with domestic produce, which often does not even have a minimum support. In the absence of effective marketing avenues, the procured grains rot in godowns. The dreams of export marketing are already shattered because of liberalization policies that removed all the controls on import. FCI godowns are bursting with mountain of foodgrains, not because we have produced more than the need, not because we have become self-sufficient in foodgrain production but because of lack of purchasing power among millions of people.

The government has now started liquidating the system of state procurement citing reasons of surplus storage and huge subsidies. But, this has served no purpose other than effectively nullifying the public distribution system and making people starve. With steady decline in the PDS off take, from PDS, the food grains procured only add to mounting food stocks and escalating storage costs. Storage costs alone account for about Rs. 12000 crores, which is a sizeable amount of the total food subsidy bill. In fact, this is larger than the Central Government's combined plan and non-plan expenditure on agriculture, rural development and irrigation and flood control in 2001. So, rather than reducing the overall food subsidy bill, the government’s strategy of reduction of subsidies to the PDS has only resulted in the increase of PDS prices and made it unaffordable to the poor.

Then, why don’t they distribute the surplus to the starving millions at an affordable price without making distinctions like Above Poverty Line, Below Poverty Line and other such criteria? The government is determined not to distribute the food grains to the people even if it comes to the point of sinking it in the sea in order to reduce the storage cost. There is a design. If TNCs and domestic corporate houses are to take over the vast food grain market in the country, they have only one challenge to overcome i.e., public procurement through FCI. If this system is done away with, they have the large market open to them and they can exploit peasants as they wish. The mammoth surplus in America produced by their 2% agrarian population with 100% subsidy can be dumped in India by ruining 70% of the population dependent on agriculture who do not have any state support. The precondition for the cjntry of MNCs into our country is to get rid of the system of centralized, public procurement. That is why this paradox, the paradox of godowns overflowing while millions are starving. So, it is in the interests of big economic powers, both national and international, that the procurement system is being systematically shelved.

Alongside the procurement system, the public distribution system is also being truncated in a methodical manner. Some Lakhadawala formula was invented and around 10% people suddenly rose above the poverty line overnight. A distinction was made between people above and below the poverty line. Dual pricing system was adopted in the PDS system. PDS prices were brought close to market prices. Most of the people belonging to APL category moved over to the open market and the PDS off-take decreased dramatically. Those who were unable to purchase anything from PDS were called Below Poerty Line and th.ey could never turn to the public distribution system at all. A situation of less off-take from PDS ration shops was created and people were blamed for not opting for PDS. Off-take from PDS is halved since the introduction of the dual pricing system. What an excellent plot to get rid of the PDS system! This is the real story of the poverty amidst the so-called ‘plenty’.

Self-Help Groups

The micro-credit movement in the form of Self-Help Groups (SHGs) has neither empowered the women nor helped them to accumulate wealth. It has only mobilized poor people’s money and helped get it transferred through the institutional banking system to big industrial houses and other big borrowers with free access to the institutional credit mechanism. Despite the phenomenal growth of micro-credit in many states, average savings per member of the group is very low.

Most commercial banks, under instructions from the National Bank for Agriculture & Rural Development (NABARD), charge an annual interest rate of 13 per cent on each loan. To make profit and to cover the operational costs, the SHGs in turn levy an interest rate of 24 per cent. Groups with exceptional entrepreneurial skills do make profit but a large majority of groups only manage to repay the loans by making small savings at home.

Far from generating wealth, the repayment pressure dries the household’s existing savings as well. In cases where women lack productive work, micro-credit loans bring the households under debt-trap. SHGs have neither acted as safety nets under adverse conditions like drought nor have they transformed the economic status of women.

The micro-credit movement also comes in handy to corpo­rate houses as a vast, readymade and captive network for marketing purposes. Hindustan Lever Ltd. successfully exploited the large presence of SHGs in many states to market its consumer products. While the corporate sector aims to expand its marketing network on the firm foundation of self-help groups, political parties gain corporate patronage in the bargain. There are also talks of experimenting with such models even for extending institutional credit to agriculture. The state is moving in the direction of making such groups part of the so-called social security mechanism, which is otherwise a fundamental task of the state.

In the era of globalisation, the state is rapidly withdrawing from many of its erstwhile responsibilities. In this context, the SHGs often enable the formal banking system to get away from its responsibility of extending credit to the rural poor.