The corrupt journey of food transportation

Many moons ago, when I was in the vehicle hire purchase business, my regular beat included Siliguri in north Bengal, the gateway for all bulk commodities to the North-East. Foodgrain would be loaded onto trucks which would then travel through the narrow chicken’s neck corridor between Nepal and Bhutan on the north and Bangladesh on the south. Nondescript men sat in hole-in-the-wall offices in Siliguri’s main mandi, and controlled an endless flow of items—rice from West Bengal, wheat from Punjab, cashew and cardamom from the South—into seven states. All transactions were done on little chits of paper—indecipherable to the uninitiated, and it was more or less entirely a cash economy. When we insisted on post-dated cheques for EMIs against the loans we were extending the traders to buy trucks, there would often be difficulties. While their office safes overflowed with cash, most of these men were loath to keep more than a few thousand rupees in the bank.

add_main_imageIn fact, though very few of them were on the income-tax rolls, hardly any of them needed loans to buy trucks. They could easily buy one per week from the profits they made in cash, without feeling the pinch. They took the loans because the truck dealer couldn’t handle that much cash on a regular basis—after all, he had to show his accounts to the income-tax department and to his principal—and doubtlessly, the traders found ways to earn higher interest through their on-the-side cash lending operations than what they were paying the hire purchase company.

The fact that even today the price of an onion goes up by a factor of 12 on its journey from Maharashtra to Delhi indicates that not much has changed in our food transportation system.NextMAds

One of our regular truck loan customers—let us call him Agarwal—was Siliguri’s master of the game. Year after year, he got the Food Corporation of India (FCI) contract to carry foodgrains to its warehouses in the North-East by quoting such absurdly low sums that they would not even cover his diesel costs. Of course, there was no mystery to it. He would load 7 tonnes of wheat on to his truck, offload 4 tonnes on the way to Guwahati at his own godowns, and spread joy all over—the corrupt FCI and public distribution system (PDS) officials, the policemen at the checkpoints, and various black market intermediaries controlled by him. Rarely in my working life have I met a man with a happier outlook on life than the ever-smiling jovial Agarwal. The circle of joy extended to the truck dealer, the truck manufacturer, and to the hire purchase firm. He never defaulted on his repayments, and bought three to four trucks a year, the loans for which we sanctioned with zero fuss.

No one—including the Union government—seems to know how much the implementation of the food security Bill will cost per year— ₹ 25,000 crore? ₹ 100,000 crore? ₹ 200,000 crore? What every Indian with a double digit IQ, however, knows for a fact is that much of the grains sent off to the states will never reach their targeted consumers. Forget for a moment that the Bill totally ignores the most pressing food problem in India—that of malnutrition. Consider only how much government money will be wasted, as dishonest officials will make merry. As the lead editorial in Mint on Thursday (The Dawn of a Pernicious Legislation) mentions: “A lot has been made of the success of states such as Chhattisgarh and Tamil Nadu in plugging...leaks (in the PDS system). GPS-tracking of vehicles, increased surveillance of fair price shops and greater citizen awareness have been held as solutions.” But to rush through the food Bill nationally without putting any checks-and-balances systems in place is criminal.

Sure, one day, every truck will have a GPS system, every citizen will have an Aadhaar card and every ration shop would be part of a vast nationwide computer network that will keep track of inventory, logistics, Aadhaar card holders who are buying from the ration shops, and their bank accounts from where the money moves directly to the ration shop’s account. One day, all that will happen.

But till then, what we will have is a vast leakage of public funds. Just as the right to education has hardly spread actual and meaningful education in any significant sense. Just as the jobs-guarantee programme has hardly made a big dent in rural poverty. Let us forget the politics behind all these moves, and consider only the moral foundations on which these are based. Yes, it’s very difficult to argue with these policies and schemes on a moral basis. But with no systems in place, with no accountability in whatever systems we have, with collusive profiteering rampant from the top to the bottom of the chain, what value do those moral foundations have?

Out there in Siliguri, Agarwal has just become a much happier man. He is ordering more trucks.