 Hello and welcome to NewsClick. Today we're going to discuss the government's controversial decision to process rice stocks it holds into ethanol. Raghu, this is something quite surprising because of course we have a large amount of food stocks in the go downs. But at a time when it should be available for distribution to the people that we should be converting it to ethanol, is there an urgent requirement for ethanol in the country that you see? I don't see that at all. I am in fact completely flabbergasted by this decision on two counts. One is normally if you are running short of ethanol and ethanol in our country we produce between 3000 to 3500 million liters a year and it is consumed roughly 50-50 between portable alcohol and non-potable alcohol used in pharmaceuticals, chemicals industry etc. Now for the last month and more the portable alcohol industry is completely shut. There's no portable alcohol being made or sold in the country. So all that stock of ethanol is still lying with the distilleries there. The chemical industry on the other hand is also mostly shut because of lockdown restrictions. So the stock of alcohol being held by the non-potable alcohol industries that's also shut. So I would think even the alcohol based industries are holding about one sixth to one eighth of the total stock of alcohol annually available in this country. More than enough to make I don't know how many kilo liters of sanitizers you need. That's number one. Let me interrupt for a minute. The question is here that anyway this consumption of alcohol that people have deferred due to the lockdown is not going to spring up and increase if you lift the lockdown. Number one. Number two this industrial slowdown is not for a short time. It's going to now continue for three to four months by all accounts. Absolutely. Therefore this talk is not going to be spent up rapidly even if the lockdown is lifted. And in fact the sugarcane crushing season and all our alcohol ethanol comes from the sugarcane molasses. The next crushing season of sugarcane is coming up in October November of this year when all these stocks are going to get replenished. And as you rightly said before October I don't see us using more than 25 to 30% of accumulated stocks either in the distilleries or in the chemical industries and you're going to come with fresh stocks in October November. So I don't see any shortage of alcohol in this country. That's one aspect. The second aspect is there's a lot of noise the government is making about making sanitizers but the real legal cover they are getting from this is from the biofuels policy under which you have a license in years of excess production to convert surplus rice stocks into bio ethanol used for dozing of petrol. Now petrol also is not being used in the country right now. There are no cars on the roads. There's no consumption of petrol. The trucks which are running run on diesel not on petrol and oil prices are at their historical lowest since the 1990. In fact people are now paying you exactly to lift their oil. So there is no shortage. India can make money by buying crude and converting it to ethanol. Exactly. So there is neither a demand side problem in terms of bio ethanol for petrol nor is there a supply side problem in terms of what you have in stock in terms of alcohol. So I just do not understand the rationale for this except for one thing is to dodge the repeated requests of civil society experts and many others demanding that the food stocks held by the government should be released for distribution to the poor. Anindu you have been following the economic issues quite closely and of course you have been carrying them on this click as well. Now question to you is is it because we are holding too much stock our amount of stock we have been the FCI go downs is already large. So in order to get now new stocks into the go downs instead of giving it to the poor one way of creating space is to give it to the alcohol industry or even actually produce it themselves because one of the things that the government should have done long back actually many people have said that and I had written in the beginning of March that sanitizers by leaders need to be distributed to slump because there's no water there right and as a government and just pointed out that you know a liter of sanitizer last two or probably a month or more so you really didn't need any of this. I think the logic my friend Srinivasan Jain of NDTV actually did a story a series of stories on the kind of stock that there is and at the same time people are going hungry in India and the government responded by saying no there's enough food being given to the poor and also after that they've announced that they'll be using it to make ethanol supposedly because there's excess rice more than what Indians consume and now the point is I think that if you let the poor consume more than what they currently consume which is I think about less than 500 availability is less than 500 grams per person per day around 485, 490. I don't exactly remember the number. They will get used to eating more now you know one of the things that Marx wrote in capital when he discusses the value of labor power and how do you how are wages created? There he says that in the chapter on national differences in wages and how labor power when it's reproduced requires different things dependent on the certain cultural and local aspects for instance he quotes a book from 1770 saying that in England which is a lament by the writer that in England there are too many luxuries that the workers use which is they need snuff they need beer and look at the Germans or the Belgians they're so good they live on very little. Now if you let the poor increase their consumption effectively you're for the long term increasing the basic real consumption of people which has not been done for ages so if you distribute food because there is absolutely no logic why successive governments do not give food to the poor the only logic there can be that you have to keep real consumption of the poor low absolutely at subsistence level and that is one of the reasons why you will not distribute rice and increase consumption even indirect consumption. So what you're saying Anindo is basically that you depress the consumption because you want their wages to be also held low that is also the other part of it I mean there is can you is there any logic I have never feeding the rats in the fci go down so we're getting quite fat and not feeding the people as you know Anindo as you know that if you hold stocks for too long you of course lose a part of your stocks to pests and all kinds of other insects all it deteriorates the other part of it is also that under the current conditions of a lockdown many other things are not available to the poor so in fact rice and wheat would be major elements in their food because as you know the argument has been that as the poor in India but also access to other foods they have stopped eating that much of rice or wheat as they used to do earlier so people who make this argument never tell us what excess amount of food I mean the availability of potatoes in this country average which includes people like me who eat a lot of potatoes is what 25 kilos per person per year or maybe 30 kilos per person per year in a good that's the availability or consumption level and yet we have people tell us that's two kilos in a in a month on an average and we we hear people say oh there people are eating potatoes they're eating a lot of chicken that's why they've stopped eating rice that's the argument can you please tell us what are they eating per capita which has gone up nothing of course I think only eggs I think only eggs has gone up marginally in the last 15 years everything is everything else is lower than what it used to so there is absolutely no argument why we should not be distributing more food grains under the current conditions like let's say the government of India is giving sorry I'm interrupting but the government of India is giving five kilos of free rice of wheat to the to 80 crore supposedly 80 crore people under the Pradhan Mantri Garib Kalyan Yojana now therefore the government of India today effectively accepts that 80 crore Indians are poor because if it is Garib Kalyan surely 80 crore of them are poor that means that the poverty level in this country is 57 percent that means the government of India has accepted that along with that there was stock I don't know whether that has continued that three seven kilos per head will be given at three rupees per kilo per month for three months so you get a total of 12 kilos of rice of wheat at by paying just 21 rupees for rice and 14 rupees for wheat which again works out to 12 kilos by 30 is 400 grams per day now this is lower than what people were eating long ago I think more than a hundred years ago so and this is going to people who are going to be doing manual labor are used to doing manual labor and that is what they eat if you look at people who work in your home you see how much cereal they eat and that is what they eat so even if you tell them take more of this take what they're not used to it so neoliberal economists and columnists and all these people will tell you that oh the poor are eating eggs fish mutton and all that thing and therefore they're not consuming that this is all in five minutes stay in front there's all rubbish unless we use French as you say just two points I'd like to add to that for me the two points is one is the claim by the government that they are distributing this amount under the PM Gareeb Kalyan Yojana press reports all over including in news click reports have come that people are not getting this on one reason or another ration card you're uprooted from where you were so you don't have documents you can't access the pds system etc that is one state governments are doing what they can some governments are not at all in Gujarat for example 95 percent of migrant workers are not being given any food in the daily condition it may be 70 to 75 percent are being given that still leaves a huge chunk of people who are not getting any food and who are lining up for handouts by NGOs and voluntary organizations who are barely able to give them food once a day so that is one part of it the second part of it is the chairman of the food corporation of India who is responsible for the food grain stocks being held has just yesterday and the report has come out today in the newspapers has said look various people are demanding that food grain be released from the fci go downs to feed the poor I want to clarify that's what the fci chairman has said that we do not have any surplus of food grains we have only sufficient buffer stock till the next harvest comes in so we have no excess amount to feed to the poor now you don't have excess money grain to feed to the poor but you have excess grain to convert into alcohol this is completely ununderstandable I have a feeling this fellow is going to get sacked tomorrow to feed cars which are not running that's right yeah that's right that's the beauty of that's right that's right Adid this is an important question what figures we see is fci is holding almost twice the stocks if the buffer stock it requires at the moment that it's going out so how does this statement look it as I think comment Raghunandan said that it looks like it's a risky statement to have made if you want to keep the job that's what it looks like apart from that the all the figures we have for fci stocks it is much more than the buffer stock so what the one where is he speaking from again I think the point is that there's a bit of miscommunication there must be some someone must have told him that you must say that there's not not too much the media is saying why is the food not being distributed in the meantime someone else says there's a lot and we are going to convert it into so classic issue of the left hand of the government or left side of the mouth of the government not hearing what the right side of the government is saying yeah Praveen if we go by the figures strictly by numbers government is holding today something like 56 million tons 30 million tons roughly of rice and 25 26 million tons of wheat the buffer stock as on April 1 that they should be holding according to the norms is about 22 million tons yeah so about two and two and a half and that is precisely why activists and civil society organizations political parties have been demanding you are holding more than your reserve stock as prescribed release it to the poor you know and this is what and today's problem is the rice harvest is already in now for the next harvest you have to wait the wheat harvest has just come in now so there is a period of time during which you will be releasing money from this I mean grain from this stock that you're held over the next let's say four to five months to the pds system which will then bring your levels of food grain stock down so I think these are the numbers that the poor fci corporation chairman is playing with to say yeah well we have some surplus but it is not that much but it is surely sufficient for distribution now unless either you say yes we have this amount of surplus but we don't want to distribute it we want to make alcohol or you have to come out with it and say I don't have surplus which the figures itself contradict so all of this seems to be the government policy at the moment does not seem to be at least coordinated and of course there's a huge shall we say lack of regard for the conditions of the poor which has always been argued that this all the measures that the government has been taking and all the even the prime minister's speeches that he has been giving more for the middle class base rather than looking at it from the point of view of the poor and more importantly the central government does not really have the responsibilities of distribution of food for instance at the local level so at the at another level they don't really get that's not their headache that's not their problem so that is somehow the issue that we seem to get and do you think Anindo this is in some sense an indirect largest for the alcohol companies those who produce alcohol and currently are not able to do so the government gives them free rise in some sense and then buys the sanitizers as a kind of largest it could be that but I have a slightly different perspective on this government's attitude towards the poor I think that if you look at it this government has hasn't I just looked at some of the data on income and consumption but that is available we know that the government of India has held back the latest consumption data that came true but one of the things even in that consumption data was that came out was that the poorest 10 percent of people in rural India their consumption went down by one percent in five years but the top 20 percent their consumption went down by or top 10 percent their consumption went down by 11 percent if you look at the poorest 30 percent in urban India their consumption actually went up by 10 percent so I actually have a slightly different view on what this government wants if I look at the last you know the NABAR financial inclusion survey then we know that in 2017 30 percent of the rural population 30 percent of the rural population had a household income less than 3558 now we convert that into today's 2020 money keeping in mind inflation although we know that in rural India actually wages have not kept pace with inflation but despite that I just take a general inflation rate it comes to a slightly less than about 4000 rupees so let's take that as 4000 rupees so we can easily say about five and a half crore households in India more all of them in rural India have an household income of less than four thousand rupees when they work when they're not working this government is giving them an advance of two thousand rupees which was supposed to come in June you get it in April it's going to about 8.6 8.7 crore farmers out of which and we know last year they didn't spend the entire money so all of it hasn't gone because some states haven't sent the list 19.6 crore jandan accounts for women they're giving 500 rupees from our perspective it looks like absolutely poultry amounts and how will people survive on that but if you're used to surviving on less than four thousand rupees per month entire household five and a half crore families then four thousand rupees or even getting two thousand then another two five hundred rupees installments a free LPG some rice without working is actually not bad at all so this government is very clear keep people at subsistence level and let them be completely dependent on handouts no jobs no work they should be beholden to various Pradhanu Mantri Kalyan Yojana so if you go and ask them what is your condition they'd say we are not bad I guess my former colleague Ravish Kumar actually he collected a lot of information from migrant workers and some of it I've used in my shows in news click and I've also written about it and he has he also got a lot of messages from them on whatsapp which he forwarded to me and I've gone through them most of them these messages that have come say that Modi ji ne humare liye bahut kiya payise mil gaye main in many places there people have been migrant workers who are in urban areas have been told by the village punch that come back to the village because money is being distributed so people are used to living at absolutely pauperized level it's the reverse of what mark said it's like the belgian or the german worker of the 18th century who was living on absolute pauperized level and that pauperized level is where this government keeps it and I do not think it's doing anything for the middle the only thing it does for the Indian middle class is that it has an anti-muslim rhetoric which the middle class is laughing up thanks to the national media and and they love it they they're living with that then they're happy with that because the number of people number of small businesses in India who are who have no revenue flow no cash flow right now and they're unable to pay back loans they're unable people small traders unable to pay back pay their EMI's many places where people have factories with workers four staff will work for 20 years they are sacking everyone else but still playing these people because there is a certain amount of you know a non-market connection that you develop and they're taking loans to do that so I think that the Indian middle class is in a deep deep kind of funk they're in deep trouble and it'll we'll have to come out of it we'll have to do the discussion another day yeah because this was nothing to do really with ethanol and you know so what what I'm saying is that the the objective of the government the reason why even when it distributes food doesn't yet it doesn't want to distribute the excess amount that's lying I can only think of keeping real wages low because if people learn to eat more they'll demand more so they will actually to keep people at the lowest subsistence level is the objective of the government so make them dependent make them live at the subsistence subsistence level don't do anything by which actually they are standard of living and even food which also subsistence increases and that would explain why instead of giving rice you give it to the alcohol companies and this is a this is an old thing and 2009 we did a story on NDTV India the Hindi channel where our reporter went and took footage of monkeys and FCI go down eating and the food wasn't being distributed there was a surplus I mean nine or ten and the government of we I think IMD ministry sent us a notice for spreading fake news at that time and we remember what Monti Singh Alualia and the finance you know the planning commission had said at that time that 13 rupees I think is enough per day for people to survive because that's what they're taken as a ground so even at that time there was excess this is a continuous process we have seen throughout the liberalization years and the Modi government has probably only made it worse in a lot of ways so only thing is as the who says this sort of stands out if nothing else at the level of stupidity you are talking at this time of feeding cars and not feeding people from your rice stock so that that seems to be the crux of the issue today and on top of it when people are actually paying money for you to lift oil stocks if you actually there's a what is the price of all minus 37 dollars which means that people are paying if you lifted their oil from them so this is on one hand the condition oil prices really have collapsed the cars are not running but you're giving rice to make ethanol for the cars so by no logic forget normal conditions today's condition there's absolutely no logic whatsoever not to do this and the only reason I can think of is to make some space in the go downs for the news rice stock which is to arrive and of course help the alcohol industry which must be suffering from the lockdown because alcohol is not considered essential goods so therefore it is not it's factories are unlikely to open soon still thank you very much Anindu and Rahu for being with us and we will continue to have this this and other discussions with you as we follow through what happens during and after the lockdown this is all the time we have the news click today do keep watching news click and other discussions