Lender of last resort

  • Saarc Food Bank must come into operation to tackle a potential food crisis triggered by the
Lender of last resort

Apr 30, 2015-

A school textbook in Nepal and Eastern India, while discussing the 1934 Nepal-Bihar earthquake mentions how lightbulbs came out of their holders in and around the Dharahara tower while the building remained intact. In the aftermath of Saturday’s Great Earthquake, dreaded happened. The ferocity of nature this time around did not spare this 203-feet tall prized heritage built in 1832.  

In the aftermath of the quake, Indian Prime Minister Narendra Modi proactively reached out to the affected regions and victims in Nepal, indicating India’s commitment to extending humanitarian assistance wherever it can. It also shows how India and other South Asian countries cannot escape the increasing wrath of trans-border environmental disasters, as demonstrated amply in the devastating floods in Koshi (2008) in Nepal, Kedarnath (2013) and Srinagar (2014) in India, and the Indus (2010) in Pakistan. This brings forth the critical need for collective regional action and strong trans-border institutional collaboration in order to manage such crises.

Food for the region

The devastating earthquake in Nepal has led to three immediate yet debilitating crises of food, sanitation, and shelter. Kathmandu-centric relief operations, in addition to inaccessibility to other very deeply-affected regions in Nepal, have posed a formidable challenge to regional and global institutions that are engaged in responding to this unprecedented tragedy.

At this juncture, a critical regional intervention is called for to thwart a possible food crisis in Nepal and resulting deaths from hunger. One could ask, Why doesn’t Saarc invoke the Saarc Food Bank? An agreement on establishing the Saarc Food Security Reserve was signed by Saarc leaders at its Kathmandu Summit in 1987. This agreement provides for a reserve of food grains to meet emergencies in member countries. It has been ratified by all members countries and came into force on August 12, 1988. The reserve stood at 241,580 tonnes in January 2002. A member country can draw the same in an event of an unexpected natural or manmade calamity and an inability to cope with such a state or condition by using the nation’s own reserves. A member country can even make use of this reserve if it is unable to procure the food grains it requires through normal trading transactions on account of balance of payments constrains.

The Saarc Food Security Reserve Board, comprising of representatives from all Saarc nations, meets once a year. The Board also undertakes a periodic review and assessment of the food situation and prospects in the region, taking into account factors like production, consumption, trade, prices, quality, and stocks of food grains. A special meeting of the Board (Kathmandu, April 2001) dwelt on the possibility of instituting more practical measures for facilitating the use of the Reserve during emergencies. In 2002, this Board identified institutions/organisations in member states to be contacted in case of emergency requirements for withdrawal from the Reserve.

Not operational

However, nothing seems to have worked. The reserves have not been used, despite very compelling and distressed situations like Cyclone Sidr in Bangladesh, floods in the Indus, earthquakes in Pakistan-occupied-Kashmir, and tsunamis in Sri Lanka, not to mention several such crises in India. Like other Saarc agreements, there is no timeframe, accountability clauses, and independent mechanisms to evaluate the implementation. There were questions across the subcontinent as to why this food reserve remained dormant and unused, even when a large number of people faced severe food insecurity during shattering natural calamities and other ruinous contingencies.

In order to give the entire initiative a more realistic shape, the Saarc Agriculture/Food Ministers Meeting in Islamabad in 2006 agreed to the creation of the Saarc Regional Food Bank. It was again after a full five years, at the 17th Summit held in the Maldives that regional leaders decided that the Saarc Food Bank would hold 486,000 metric tonnes of rice with contributions from all member states. India has the largest share, with 306,400 metric tonnes. This agreement also mentions the establishment of a permanent headquarters with dedicated staff.

Despite this agreement, signed by all the heads of state/government, this Food Bank remains totally notional. No one knows where it is physically located, how to draw food grains, and at what cost. The terms and conditions of operationalising the reserves viz prices, mode of payment, and conditions of payment have yet to be finalised.  More critically, no one has any idea about the institutions involved in its distribution and the transportation mechanisms. Why cannot Nepal, as the current Chair of Saarc, and India, as the largest contributor (63 percent), make use of the provision of the Food Bank in dealing with the unprecedented food insecurity and shattering crisis in Nepal today? Just five months back, at the 18th Summit of Saarc leaders in Kathmandu in November 2014, the leaders directed “to eliminate the threshold criteria from the Saarc Food Bank Agreement so as to enable the Member States to avail food grains, during both emergency and normal time food difficulty”.

A desperate solution

The only way to test the efficacy of this Food Bank is to expeditiously implement it in a real time situation like the crisis in Nepal today. This will put into test the entire design and mechanism of its implementation and the machineries of its operationalisation. Could India unilaterally invoke the provisions of this agreement and start supporting Nepal’s earthquake victims under the provisions of this regional Food Bank? This would in fact pave the way for the operationalisation of numerous other Saarc agreements, which have been a pressing regional need. This would also institutionalise the process of engaging in regional solidarity and nurture ‘region-ness’ in national and regional contingencies and exigencies that call for urgent humanitarian assistance.

A desperate situation calls for a desperate solution. Nepal, being a landlocked country that is recovering from a protracted spell of violence and instability, is deeply distressed today. It needs innovative, substantive, and far-reaching assistance. Such a response will also add a much larger regional dimension and trigger deeper confidence and trust in the neighbourhood.

Lama is Professor of South Asian Economies at Jawaharlal Nehru University and a former Member of the National Security Advisory Board, Government of India


Published: 01-05-2015 09:19

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