Food Security Bill A Discussion

Credit: Businessline

Food Security to vulnerable sections of society (In light of the Cabinet's approval for the Food Security Bill Ordinance)
This is a very important step: Around 25% people in India are classified as living in hunger. Their income levels have increased in the last 10 years. But data shows that they're spending the increased income on education, health, transport and fuel and  not on food. If we want to control malnutrition and hunger, we need to provide cheaper food grains to very large number of people those who are not only below the poverty line but also for people around the BPL.
How Far Are The Steps Taken By The Government Are Successful? :
Food procurement has gone up from 40m tonnes to 65million tonnes. Mainly because of raising Minimum Support Price (MSP) for wheat and rice (and not because of production). Govt is storing 70-80 million tonnes (mostly lying in open) instead of 20-30 million tonnes at any given point of time according to norms. We need to check  Many states have improved PDS, they've taken steps to improve PDS. With the coming of the DBT, equilibrium PDS would less and less.

Hunger: How will the bill contribute to make a difference in the conditions of the people?
Hunger is not just defined in terms of food and security but also in terms of malnutrition of children. This bill provides that not only the children below 6 years and those who are in schools but also pregnant women not only get free meal for about a year they'll also get Rs. 1000 as stipend or honorarium per month for 6 months during pregnancy. The effort is to see that the pregnant women eat well so that the child doesn't get malnutrition. At the same time, the number of families to be covered have been increased. The number of families subsidized just to 6.5crore households which will be increased to 18crores (almost 3 fold increase) households. 75% in rural area and 50% in urban areas will be covered under this bill and will get rice, millets at Rs. 2, 3 and 1 which is going to be very big step towards controlling hunger.

About Concerns/Apprehensions That Subsidy Will Go Up:
Subsidies bill will certainly go up. We can afford it. But we can also cut down the subsidies by slightly raising the price. The price of wheat and rice at Rs. 2 and Rs. 3 are so-2000. If we consider the open market prices which are at Rs. 20, there's no reason why we can give them at Rs. 5. people are more concerned about quality but not just at the price. Kerala, TN 50-60% of the requirement is met with the PDS.

Source Of Identification of Beneficiaries:
It still remains a concern. GOI is yet to adopt a correct methodology to identify the beneficiaries. It has been left to socio economic cost survey which involves going and asking questions. If there's no people participation,  chances are that the rich would misclassify the information or give wrong information is very high. We need to involve the people, panchayats and gramsabhas. 50% are in exclusion-inclusion errors at present. It's likely to continue if we don't act.

PDS Should Be Universalized?
Of the total 190mn tonnes that we produce, govt is procuring 1/3rd (about 60-65 million tonnes). With this amount if we're to give to everyone, we won't be able to give 35kgs to the Antyodaya families and 25kgs to the other priority group (which add up to 18cr households). It would be around 15kg (or 3kg per family). It would be better to give 5kg to poor and excluding the other, than to give 3kgs to everyone.

Response of the states:
Many states have taken good measures to optimize PDS. States like Rajasthan, Gujarat, HP etc. States will not be very unhappy like TN and Kerala. It's because of the fact that their quota could come down slightly. Because TN has 3.5% of India's poor people. But they will get about 7.5% of the total PDS. We will have to think on how to ensure their quota doesn't comedown.

We have to decide not to export. We're exporting 10 million tonnes inorder to contain the resentment from such states whose quota could be reduced.

Could It Lead to Higher Prices in the Open Market:
If we're restricting our procurement to 1/3rd and not forcing the farmers to produce more, it won't have any adverse impact on Open Market Price(OMP) since 2/3rd will go to OMP. OMP will be slightly contained because we're holding 70-80 million tonnes in government go downs and that will be released. Therefore when 2/3rd people are getting 50% of the requirement with this subsidized grains, then the OMP demand will come down and therefore the prices are likely to come down.

Concern that if the poor farmers get the food grains at subsidized cheap price of Rs.3, 2, 1 or so, then they may not opt to grow the crops?
Experience of states like TN and Chattisgarh where almost everyone get rice at about Rs.1/2 per kg or so, the production has gone up. Because when the farmers needs are met, they are able to work harder and invest more in fertilizers, manure or in water. Experience of both MP and Chattisgarh show that with the improvement in PDS not only procurement has gone up but also production has gone up. Particularly of rice in Chattisgarh and wheat in MP.


Logistical Issues: (Storage, Transport, delivery)
It is know that not all states procure. So there would be movement from food surplus states like Punjab and Haryana to food deficient states. However these are not new, these problems are even faced now.

Link with Direct Benefit Scheme:
Distinction between Direct Cash Transfer (DCT) and Direct Benefit Transfer (DBT): With DCT, once we procure from farmers (we're procuring 75mn tonnes), we can't throw it in the Arabian sea. PDS is an outlet for consuming and ensuring that these 75mn tonnes are consumed by the people. DBT is different. It means that the shopkeeper will get at Rs. 20. But if I'm a poor man, I will go with Rs. 3 and give him a card. The rest Rs. 17 will be transferred to his account from my card. That will improve the relations with the shopkeeper. Because now the shopkeeper has no incentive, he can't sell it in the open market. He will be after me saying, "please come and collect your grain". Hence it will be a game changer if implemented well.

How Have the States Prepared themselves For The Bill?
The GOI has not yet done their best. They've still not decided what is the basis for deciding inter-state allocations. It can't be 75% for all the states. Punjab could be less, Bihar could be more similarly Chandigarh can't be 50%. This inter-state allocations have been not decided.

This is a transcript of the discussion on AIR, broadcasted on 2nd July 2013. It can be accessed here:


  


From Hindu:

The ordinance will guarantee 5 kg of rice or wheat or millets a beneficiary a month at a discounted rate of Rs. 3, Rs. 2 and Re. 1 respectively. However, 2.43 crore Antyodaya Anna Yojna (poorest of the poor) beneficiaries will continue to get their legal entitlement of 35 kg a household a month. 

For More: PRSIndia‎

Current Affairs, on AIR, broadcasted on 5/7/13: