UPA II brought a legislature on the food security, fulfilling an election manifesto
promise, a gesture seen rarely in democratic India. But key questions are raised
almost on every provision of the bill, be it the out sized amount of finances involved,
its serious fiscal implications, population identification or distribution mechanisms
and its large scale food grain procurement except on its noble intentions and utmost
necessity. Let’s try to understand the legislation and find answers to draw a clear
picture.
NFSB (National Food Security Bill): The bill aims to cover close to 64% of our total
population. It proposes an imaginary division of population in general and priority
households, covering nearly 75% of rural and 50% of urban population under its
ambit with at least 46% in rural and 28% in urban areas under priority households
and promises them the right to 7kg of food grains per person per month at subsidized
rates. General category would get at least 3 kg of grains at a rate not exceeding 50 per
cent of the minimum support price. What are these unheard divisions? The division
will be based on findings of socio-economic caste census carried out by the respective
State Government with the financial and technical support of the Government of
India, which will be used to separate out priority household from the general. Doing
as promised will require 61 million tons of food grains thus an escalation in food
procurement, translating into total food subsidies to Rs.1 Lakh crore. It also gives
Central government usurps all powers to decide the number of people belonging
to priority households and imposes a substantial level of expenditure on the State
governments. In words the bill sounds simple, doesn't it? Then why has the bill
triggered slurry of criticisms? Let’s answer to the questions floating in the criticisms
and see which part of the chain of food security are missing i.e. the production of
food, its distribution and its absorption by the poor and hungry.Where will the food come from? - Current average food grain procurement is 52
million tons which has peaked in the last 3 years owing to good rainfall. But if we
see back, we were producing much less thus average procurement was much lower
between 2002-2008. Since Indian agriculture is largely dependent on monsoons we
may have years of bad monsoon and the average production will is less, then the
remaining food grain to meet the legally mandated demand will have to be imported
which could climb the global prices up. The way out is to make India self-sufficient
for its requirement for which we need to invest in agricultural growth, scientific
irrigation, in rural roads that provide vital physical linkage to markets, in scientific
storage and efficient transport logistics, in developing as close a link as possible
between the farmer and the first stage of food processing, in short we need second
green revolution or a evergreen revolution sooner. Ideally, we need to have all the
agro reforms in place before embarking on such an exercise or else the scheme will be
a non-starter or a simple failure.
How the food will be distributed? - The distribution mechanism is centralized
and raises question whether such massive exercise can be handled by FCI(food
corporation of India), and can this system deliver? The food ministry earlier revealed
that it costs Rs.134 per quintal to procure wheat while it costs them Rs.289 to
distribute it. These enormous costs are the result of our failure to move towards a
decentralized system. The way towards an efficient and financially viable distribution
mechanism calls for localized innovations in productivity, to procure food at
panchayat levels and involve these institutions where delivery can be ensured and
fastened, which will also give way to new economic activities. The only logical way
to tackle hunger is to try different methods and see which one works best and extend
the model nationally. This is how the mid-day meal scheme introduced in Tamil Nadu
in was adopted nationally in 2001.
Who will be given the food? - The bill proposes to give food to priority and general
households but no clear division mechanism and is the biggest downside of the
legislation which will not only divide people within same community, the criteria
used will leave out many deserving households and this division of household is
counter reproductive to the inclusive PDS approach in states like TN and AP. Only
feasible exit is to either give everyone the same entitlement or the entitlements above
poverty line be completely vanished and poorest households can continue to get
special support. This bill is not India’s first crack at hunger. In the past we have had
the food-for-work programme (a variant of NREGA), the Antyodaya scheme (targeted
at the ultra-poor), the mid-day meal scheme for children, and the anganwadi schemes
for mother and child. Above it all, we have public distribution system (PDS) which
works well in some states
What are the fiscal implications? - Even though the bill will burden the state
exchequer a large amount it is unlikely that bill come into force in the entire country
in one go and the subsidy will materialize right away. What is at stake, therefore, is
not an immediate financial blow, but the ability of the Indian economy and public
finances to accommodate this Bill over a period of time. We definitely need food
security and the amount involved cannot be the reason for not doing it.
Is it another ‘common-man’ stunt? - Since the economic growth model is not
inclusive, rising inflation and chronic global economic fluctuations are bound to make
India’s war on poverty difficult. So the fact is that the country’s poor need subsidized
food to be able to spend their earning on their important needs, like health care and
children’s education. The government, on the other hand, by its very nature, has to
balance contradictions in society and hence has an obligation to providing the poor
with a minimum sense of existence. Based on this thought, the Food Security Bill
should be welcomed. Hence, the administration of food security is a challenge beyond
budgetary numbers, which seems to have caught everyone’s attention!
promise, a gesture seen rarely in democratic India. But key questions are raised
almost on every provision of the bill, be it the out sized amount of finances involved,
its serious fiscal implications, population identification or distribution mechanisms
and its large scale food grain procurement except on its noble intentions and utmost
necessity. Let’s try to understand the legislation and find answers to draw a clear
picture.
population. It proposes an imaginary division of population in general and priority
households, covering nearly 75% of rural and 50% of urban population under its
ambit with at least 46% in rural and 28% in urban areas under priority households
and promises them the right to 7kg of food grains per person per month at subsidized
rates. General category would get at least 3 kg of grains at a rate not exceeding 50 per
cent of the minimum support price. What are these unheard divisions? The division
will be based on findings of socio-economic caste census carried out by the respective
State Government with the financial and technical support of the Government of
India, which will be used to separate out priority household from the general. Doing
as promised will require 61 million tons of food grains thus an escalation in food
procurement, translating into total food subsidies to Rs.1 Lakh crore. It also gives
Central government usurps all powers to decide the number of people belonging
to priority households and imposes a substantial level of expenditure on the State
governments. In words the bill sounds simple, doesn't it? Then why has the bill
triggered slurry of criticisms? Let’s answer to the questions floating in the criticisms
and see which part of the chain of food security are missing i.e. the production of
food, its distribution and its absorption by the poor and hungry.
million tons which has peaked in the last 3 years owing to good rainfall. But if we
see back, we were producing much less thus average procurement was much lower
between 2002-2008. Since Indian agriculture is largely dependent on monsoons we
may have years of bad monsoon and the average production will is less, then the
remaining food grain to meet the legally mandated demand will have to be imported
which could climb the global prices up. The way out is to make India self-sufficient
for its requirement for which we need to invest in agricultural growth, scientific
irrigation, in rural roads that provide vital physical linkage to markets, in scientific
storage and efficient transport logistics, in developing as close a link as possible
between the farmer and the first stage of food processing, in short we need second
green revolution or a evergreen revolution sooner. Ideally, we need to have all the
agro reforms in place before embarking on such an exercise or else the scheme will be
a non-starter or a simple failure.
How the food will be distributed? - The distribution mechanism is centralized
and raises question whether such massive exercise can be handled by FCI(food
corporation of India), and can this system deliver? The food ministry earlier revealed
that it costs Rs.134 per quintal to procure wheat while it costs them Rs.289 to
distribute it. These enormous costs are the result of our failure to move towards a
decentralized system. The way towards an efficient and financially viable distribution
mechanism calls for localized innovations in productivity, to procure food at
panchayat levels and involve these institutions where delivery can be ensured and
fastened, which will also give way to new economic activities. The only logical way
to tackle hunger is to try different methods and see which one works best and extend
the model nationally. This is how the mid-day meal scheme introduced in Tamil Nadu
in was adopted nationally in 2001.
Who will be given the food? - The bill proposes to give food to priority and general
households but no clear division mechanism and is the biggest downside of the
legislation which will not only divide people within same community, the criteria
used will leave out many deserving households and this division of household is
counter reproductive to the inclusive PDS approach in states like TN and AP. Only
feasible exit is to either give everyone the same entitlement or the entitlements above
poverty line be completely vanished and poorest households can continue to get
special support. This bill is not India’s first crack at hunger. In the past we have had
the food-for-work programme (a variant of NREGA), the Antyodaya scheme (targeted
at the ultra-poor), the mid-day meal scheme for children, and the anganwadi schemes
for mother and child. Above it all, we have public distribution system (PDS) which
works well in some states
What are the fiscal implications? - Even though the bill will burden the state
exchequer a large amount it is unlikely that bill come into force in the entire country
in one go and the subsidy will materialize right away. What is at stake, therefore, is
not an immediate financial blow, but the ability of the Indian economy and public
finances to accommodate this Bill over a period of time. We definitely need food
security and the amount involved cannot be the reason for not doing it.
inclusive, rising inflation and chronic global economic fluctuations are bound to make
India’s war on poverty difficult. So the fact is that the country’s poor need subsidized
food to be able to spend their earning on their important needs, like health care and
children’s education. The government, on the other hand, by its very nature, has to
balance contradictions in society and hence has an obligation to providing the poor
with a minimum sense of existence. Based on this thought, the Food Security Bill
should be welcomed. Hence, the administration of food security is a challenge beyond
budgetary numbers, which seems to have caught everyone’s attention!
The truth is that food security comes from ensuring three things: creating jobs and
income, ensuring higher food output by raising productivity, and creating a safety net
to feed those who can’t do so themselves in distress situations. The proposed subsidies
can help the efforts but it cannot eliminate the problem. And the food security bill is
just one approach to the problem and is certainly a flawed one!
income, ensuring higher food output by raising productivity, and creating a safety net
to feed those who can’t do so themselves in distress situations. The proposed subsidies
can help the efforts but it cannot eliminate the problem. And the food security bill is
just one approach to the problem and is certainly a flawed one!
Written by
Ashish Gupta
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