The Mental Gymnastics of Malnutrition

Apparently the government of India is sitting on 6 million tons, or about $1.5 Billion worth of rotting grain. See if you can follow the twisted logic that stops them from taking action. 

1. The government of India guarantees grain farmers a fix buying price for grain nearly 50% higher than the market price. (Some people might call this a subsidy, but not them)
2. Farmers drop other crops in favor of grain which has a guaranteed return 50% greater than market price, leading to massive over production. 
3. Instead of simply having an open subsidy and paying the farmers the balance between market price and subsidized price, the Indian government literally buys the grain from the farmers - putting them simultaneously in the crops storage, crop distribution, and commodities speculation business. All things, I'm sure you would assume, they are expert at. Because the original subsidy to farmers was not acknowledged: This grain is carried on the books as an asset at the price they paid for it!
4. Because the original subsidy to farmers was not acknowledged, the government proceeds under the twisted logic that to sell the grain they just bough at 150% of market value for less than 150% of market value would be subsidy for the buyer!! Leading officials to actually say things like, "we can't sell the grain at market price to (insert country or people who need the grain and can pay for it). Why should the Indian government be in business of subsidizing them? " 
5. You might say, fine, lets at least give it to the poor! But remember - Because the original subsidy to farmers was not acknowledged: This grain is carried on the books as an asset at the price they paid for it! The budget is strained, so they can't just give the grain to the Poor, it would rec the balance sheet!
6. They can't sell it, it would be a subsidy! They can't give it away, its an asset! So grain does what grain does. Much of it over 5 years old now, it rots. It turns black with fungus, It serves as a cornucopia for rats. It's already so disgusting the Poor don't bother stealing it. When the local officials near the storage facilities do decide to hand some out, they have to mix it with fresh grain to trick the starvation line poor into eating it. 

We should all weep at the absurd tragedy of the government of a poor nation spending nearly $2.25 Billion to buy $1.5 billion worth of grain so that they can watch it rot next to the starving poor they bribed to elect them. We might also ask if the similar, much larger scale, but harder to see effects of corn subsidies a half a world away are any less tragic because the poor are further away. 

http://uk.reuters.com/article/2012/07/01/uk-india-wheat-idUKBRE8600KB20120701 

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