How to ensure food security and control inflation has emerged as a major challenge for the government in the New Year. The hangover of food inflation from 2010 cannot be ignored as it is still in double digits. Timely food supply management and imports can help ease inflation in the short term but focus will have to be on increasing domestic food production. This year somehow the burden on the common man has to be lessened because for many months there has been an unabated rise in food prices.
It is not the average middle-income persons who are suffering the most, but the poor and very poor who cannot afford to buy food in the open market anymore and are dependent on subsidised food. Their nutritional needs have to be addressed even though it may mean more public expenditure. The government in its efforts to reduce the fiscal deficit this year is looking for various ways to cut expenditure, including the food subsidy bill which takes up 1 per cent of the GDP (Rs 72,234.98 crore in 2009-10). But can a country like India, which is one of the emerging economies of the world, afford to have so many people going hungry?
According to a survey of the Indian states by the International Food Policy Research Institute (IFPRI), 12 states fall into the 'alarming' category with Madhya Pradesh having an extremely alarming level of hunger. Even Punjab falls below 33 other developing countries ranked by the Global Hunger Index (GHI). India has dropped two ranks to the 67th position among 84 developing countries in the IFPRI's annual GHI for 2010. Sudan, North Korea and Pakistan rank higher than India. The GHI
is based on the proportion of the undernourished in the population, the prevalence of underweight in children and the mortality rate of children. All would agree that with 1.2 billion mouths to feed, India needs to have a good food security system. The poor and the undernourished have been legally promised the 'right to food' by 2014, but they are voiceless against corruption in the public distribution system. Revamping it, making it stronger and plugging all the leakages have been the endeavour of every government in the last 20 years. Yet none have succeeded.
The proposed Food Security Bill (drafted in October 2010) by the National Advisory Council (NAC) headed by Mrs Sonia Gandhi is to be placed before Parliament this year. It intends to legally guarantee food security in two stages. In the first phase, it would be extended to 85 per cent of the rural population and 40 per cent of the urban population. According to the NAC's definition, 46 per cent of the rural households and 28 per cent of the urban households will qualify as 'priority' households, and 44 per cent rural households and 22 per cent urban households will be designated as 'general' households. Who are the 'priority' and 'general' poor? Shouldn't all the poor qualify for subsidised food, especially when huge quantities of foodgrains can be seen rotting in the open after the harvest?
Basically the BPL (below poverty line) category has been called 'priority' and APL or above poverty line 'general' households. The rural 'priority' group or 46 per cent of the rural population would get 35 kg of foodgrains at Rs 3 a kg for rice and Rs 2 a kg for wheat and Rs1 a kg for millets per month. The urban 'priority' group comprising 28 per cent of urban population would get 35 kg of foodgrains at Rs 3 a kg for rice and Rs 2 a kg for wheat and Re 1 for millets per month. The 'general' group comprising 44 per cent of the rural population will get 20 kg foodgrains per month at a price not exceeding 50 per cent of the MSP (minimum support price) and the urban general group comprising 22 per cent of the urban population will be given 20 kg of subsidized foodgrains at a price not exceeding 50 per cent of the MSP. Thus, the proposed Food Security Bill by the NAC excludes 10 per cent of the rural population and 50 per cent of the urban population.
In a surprise move, the Prime Minister's Economic Advisory Council has recently rejected the recommendations of the NAC on grounds that the government cannot afford to feed so many poor as food production is not likely to be sufficient to provide for both 'priority' and 'general' groups. It favours legal entitlement only for the 'priority' group, covering the rest with varying quanta depending on the availability of foodgrains and through an executive order. It clearly does not favour legal entitlements for 75 per cent of the population, leave alone food security for all.
In the watered down version of the Prime Minister's Advisory Council, the 'general' category would get only 10 kg of foodgrains per family per month — half of what the NAC recommended. The Council points out that the government may not be able to keep its promise in accordance with the NAC recommendations of delivering foodgrains in the case of two successive years of drought as it would have to rely on imports. Massive imports are not a feasible option. It also points out that even the 'priority' sector households will have to buy from the open market at least 25 to 30 per cent of their requirements because 35 kg per household would not be enough.
If the government enters the market with large procurement orders because of its obligation of giving large amounts of subsidized grains to the poor, it would distort open market prices which would adversely impact the 'priority' category households. It points out that not only will the subsidy cost escalate to Rs 85,584 crore in the first phase and to Rs 92,060 crore in the second phase, the other costs due to scaled-up operations of food procurement, including warehousing and supply chain operations, will also go up. It would also mean higher support prices. Clearly, the Prime Minister's Advisory Council is not in favour of the scheme for the not-so-poor ( APL) 'general' category and seems to be more concerned about reducing the fiscal burden of the government.
Why cut corners when the problem of food security and undernourishment is so severe in the country and runs across the entire poor population that includes both the 'priority' and the 'general' categories? Let us not forget that India is home to 42 per cent of underweight children under the age of five in the world. Why have food security for a few? What the final version of the Food Security Bill will take is not clear at all.
Courtesy: The Tribune
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