Karnataka pays the price with rice

Do not lose out on the prime minister’s blessings by voting BJP out of power in Karnataka”—that was the stark warning sent out by BJP president J.P. Nadda while addressing an election rally in Karnataka’s Haveri on 19 April. His words have proved prophetic. The BJP soundly lost the election and the retribution has been swift in coming.

One of the poll promises made by the Congress was that under the Anna Bhagya scheme 2.0, each person living below the poverty line (BPL) would get 10 kg of rice per person every month. The new chief minister Siddaramaiah had announced that the scheme would be rolled out on 1 July.

But on 13 June, the Union government ordered the Food Corporation of India (FCI) to discontinue the sale of rice to the states. With the prime minister apparently having withdrawn his ashirwad (blessings) from the state, the scheme was at risk of being deferred indefinitely.

As if on cue, BJP leaders in Karnataka have served an ultimatum to the Congress government: roll out the scheme or be prepared for protests and dharnas, warned former chief ministers B.S. Yediyurappa and Basavaraj Bommai.

However, a defiant chief minister Siddaramaiah has reiterated his resolve to implement the scheme. The state government will have to call for tenders to supply the rice from the open market, which will take time —a minimum of two months, he rued. “We have called for quotations from central government agencies like NCCF, NAFED and Kendriya Bhandar,” he added. There is no guarantee, of course, that they will oblige.

Siddaramaiah and his food and civil supplies minister K.H. Muniyappa have also canvassed the rice-surplus states of Telangana, Punjab, Chhattisgarh, West Bengal and Andhra Pradesh. The chief minister in fact called on Union home minister Amit Shah on 22 June in New Delhi in a bid to break the stalemate. But the mission failed.

Procuring rice from other states would also prove to be more expensive, due to transportation costs. “From Andhra Pradesh, it will cost Rs 42 per kg. Telangana said only paddy is available, not rice. Chhattisgarh has told me they are in a position to supply one lakh metric tonne of rice but only for a month, while the Punjab [chief minister] has said he would discuss with his officials and get back,” Siddaramaih informed the media.

How much rice is required? Karnataka now needs 4.45 lakh metric tonnes of rice to fulfil the Congress promise. The state is, however, entitled to only 2.17 lakh metric tonnes under the National Food Security Act. The state government planned to buy the remainder from the FCI.

The Karnataka government estimates the total number of individual beneficiaries for the scheme to be 4.42 crore, which is nearly 39 lakh more than the number benefitting from the central government’s public distribution scheme (PDS), according to Muniyappa. The estimated expenditure for executing the scheme is Rs 890 crore per month, or Rs 10,092 crore per year.

According to a statement from the Union food ministry, the decision to stop sale of rice to states through the OMSS (D) was taken at a meeting of the inter-ministerial committee on June 8. ‘As there is need to maintain sufficient stocks for market intervention (to) control prices of wheat and rice through OMSS (D), the sale of wheat and rice under OMSS (D) for state governments may be discontinued,’ it said, exempting the north-eastern states, hilly states and states facing law and order crises or natural calamities.

After assuming power, Siddaramaiah had written to the FCI seeking to purchase 2.28 lakh metric tonnes of rice, at a price of Rs 36.60 per kg, which included Rs 2.60 per kg towards transportation. The FCI’s regional office in Bengaluru, in a letter on June 12, did agree to sell 2.08 lakh metric tonnes of rice; but a day later, rescinded on its promise, citing the central government’s decision to not sell rice under the OMSS (D) except to ‘select and specified’ states.

By way of explanation for the volte face, the FCI stated, ‘As per the policy announced on 26 January 2023, which was in vogue at the time of issue of orders by the GM Karnataka [the FCI official in the state], state governments were allowed to purchase rice from FCI at Rs 3,400 per quintal. However, on receipt of the new orders from GoI, the earlier letter was withdrawn by GM Karnataka on June 14.”

Congress spokesperson and Rajya Sabha MP Jairam Ramesh said, “[This is the] most recent chronology of Modi’s anti-poor and vendetta politics. Once the Congress government was formed in Karnataka, as threatened by Nadda, the PM’s ‘ashirwad’ has been withdrawn at breakneck speed. Karnataka was willing to pay [the] FCI Rs 3,400 per quintal. But that window was closed. But [the] FCI continues to sell rice at Rs 2,000 per quintal for ethanol production.”

Ramesh pointed out that from 1 January 2023 to 24 May 2023, the BJP-led state government in Karnataka alone lifted more than 95 per cent of the rice procured by all state governments under the OMSS(D)—presumably with “Modiji’s ashirwad”.

The dwindling rice bowl. A brainchild of Siddaramaiah, the Anna Bhagya scheme was first launched on 10 July 2013 when the Congress was in power, to supply 30 kg of rice at Re 1 per kg to nearly 10 million BPL families across the state. The scheme then cost the government Rs 4,400 crore annually. Announced in the poll manifesto during the 2013 Assembly elections, it stipulated that a family with only one member would receive 10 kg, a two-member family 20 kg and families with three members and above a maximum of 30 kg per month.

In 2018, the then chief minister H.D. Kumaraswamy, heading a coalition government, scaled down the supply of rice to 5 kg, saying it was a cost-cutting measure to pay for the farm loan waiver promised by his own party, the JD(S).

When B.S. Yediyurappa of the BJP became the chief minister in 2019, he scrapped the Anna Bhagya scheme in May 2021 and merged it with the Pradhan Mantri Garib Kalyan Yojana (PMGKY). There was no separate allocation for the Anna Bhagya scheme and all food procurement was under the Centre’s PDS. From 30 kg per head, the rice supply dropped to 2 kg in 2021.

Of the 5 kg of food grains provided under the PMGKY, 2 kg of rice and 3 kg of ragi were given to beneficiaries in South Karnataka, with jowar instead of ragi in North Karnataka; the 13 districts of Kalyan Karnataka (Mumbai–Karnataka) and the coastal districts continued to get 5 kg of rice, as ragi and jowar are not consumed there.

The Karnataka Congress is determined to ensure the revival of the scheme. The state government has brainstormed an interim solution. In a cabinet meeting on 28 June, the government decided to pay beneficiaries in cash, at the rate of Rs 34 per kg (the FCI rate), for the additional 5 kg of foodgrain (over and above the 5 kg from the Centre’s BPL and Antyodaya schemes) promised under Anna Bhagya.

A one-person BPL ration card thus merits Rs 170 a month, a two-person card Rs 340, and a five-member allotment is Rs 850. The money will be transferred directly to the beneficiaries’ bank accounts.

Disbursement start from July 1, said Muniyappa. A promise is a promise, as the Congress high command have said before.

Chronology of the case

• Karnataka wants to buy an additional 2.28 lakh metric tonnes of rice per annum for distribution of 10 kg each to the poor

• The FCI inventory of rice on 15 June 2023 was 265 lakh metric tonnes, against the required minimum buffer stock of 135 lakh metric tonnes

• From 1 January 2023 till 24 May 2023, Karnataka alone was allowed to lift 95 per cent of the rice lifted by all states together under the domestic open market sale scheme, the OMSS (D)—obviously in view of the assembly elections

• The FCI responded positively to the newly-elected Congress government initially, and on 12 June 2023 communicated its readiness to sell rice under the OMSS (D) scheme

• The very next day, on 13 June, the central government issued directions to stop sale of rice to the states; the FCI promptly withdrew its consent to Karnataka’s request

• On 23 June, the FCI chairman and managing director told the media at a press conference that while FCI will continue to sell rice to private traders, they would have to agree to the condition that they would not sell the rice to state governments in turn

• Interestingly,, the FCI has allocated 1.5 lakh metric tonnes of rice for the production of ethanol to be blended with petrol