All over the world, there is a tendency to substitute fossil fuels by ethanol which is supposed to be “cleaner”, and a larger proportion of grains is being diverted for ethanol production than before. In the US, maize is being used for ethanol production; but this matters little for the US since it does not have to worry about mass hunger and does not figure in the world hunger index.But the Modi government, not to be outdone, has also announced an ambitious plan for shifting to ethanol: it would-be promoting a mix of gasoline and ethanol with the proportion of the latter being 20 per cent, and for this purpose using rice and sugarcane. A senior government official is quoted as saying that this would pose no problems for India’s food security, since “the government has enoughstockpiles of grains at warehouses of the State-run Food Corporation of India”.The official’s remark betrays the same ignorance of basic economics as most other statements of the government.Excess stocks of foodgrains, instead of being seen as the outcome of the prices in the market and the state of purchasing power of the people, are adduced as proof of plenitude. By this reasoning, even if there is a famine in the country, that fact would not be acknowledged at all as long as there are plenty of foodgrain stocks in FCI godowns. It is not just the diversion of grains for ethanol production that must be opposed by all right-thinking persons in the country. The available grains should instead be getting distributed among the people by putting purchasing power in their hands so that their hunger is allayed. But even the use of sugarcane for ethanol production, insofar as it leads to a diversion of land away from foodgrains, will lead to a still greater decline in per capita foodgrain availability than has been the case till now. In fact, even when there is such a decline in per capita foodgrain availability, there would still be surplus foodgrain stocks in the economy. This is because the very modus operandi of a neo-liberal economic regime is to generate a perpetual surplus of foodgrain stocks, no matter how low the per capita foodgrain availability. The reason is simple. Whenever there is a fall in foodgrain stocks below the “norm”, there is a fear of inflation. Hence, finance capital, worried about the loss through inflation of the real value of financial assets, immediately puts pressure on the government to counter such inflation by cutting back its spending and by inducing the imposition of a tight monetary policy.But no such countervailing efforts are made in the opposite case, when foodgrain stocks are excessive. Falls in foodstock levels in short are quickly eliminated but not excesses in foodstock levels; and because of this asymmetry there is always, in general, a state of “surplus” foodstocks. Alongside this asymmetry, there is a second asymmetry. There are two ways to eliminate any shortfall in foodgrain stocks below the accepted “norms”. One is through an increase in production and hence supplies, and the other through a reduction in demand, such as through cuts in public spending and a tighter monetary policy (which basically reduce purchasing power with the people).Of the two, the much easier way for the government is the latter, both because it takes less time to show its effects, and also because when public spending is being cut, the required government investments, for increasing foodgrain output, would scarcely be forthcoming.Hence, the tendency over time is for the purchasing power with the people to keep getting restricted while per capita foodgrain output, and hence per capita foodgrain availability keeps falling, which means anincrease in the magnitude of hunger. This is exactly what has been happening in India.
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