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Food for all
For years, food production has been either stagnant or growing at snail’s pace. Productivity levels have been abysmally low. With fragmented land holdings, there has been little application of science, technology or management. The immediate need is to work towards agglomeration of land holdings.
The bill gives legal entitlement to two-thirds of the population for subsidised grains: 5 kg of rice or wheat or coarse cereals will be provided per month at Rs.3, Rs.2 and Re 1 a kg respectively.
UNLESS FOOD PRODUCTION achieves a big jump, providing food security will remain a pipe dream.

The National Food Security Bill was cleared by the Union Cabinet on 19 March and was slated to be tabled in the Lok Sabha later that week. Alas! disruptions denied this.

Considered the flagship programme of UPA II, the bill gives legal entitlement to two-thirds of the population (75 per cent rural and 50 per cent urban) for subsidised grains: 5 kg of rice or wheat or coarse cereals will be provided per month at Rs 3, Rs 2 and Re 1 a kg respectively. The beneficiaries will be identified by the states based on the parameters prescribed by the Union Government. 

The UPA government has been known for its initiatives in regard to enacting the Right to Information Act, Right to Education Act and its attempts at expanding healthcare. But the crowning piece promises to be this Right to Food.

Understandably, the right to food initiative will impact on the vast mass of people and promises major electoral gains for the party spearheading this.

TN provides the lead

Tamil Nadu has been known for its focus on welfare even at the cost of development. In the 1950s, Kamaraj as chief minister introduced a mid-day meal programme for school children. In the 1980s, M G R as chief minister vastly expanded the programme that benefited over 80 lakh school children and destitute women. The scheme received wide acclamation and was later adopted by the Centre and extended to all states. 

The DMK government came to power in 1967 broadly on the election promise of providing three measures (about 4.8 kg) of rice a rupee. While this was not practical, the DMK later offered rice at just Rs 2 per kg for the weaker sections. The AIADMK further expanded this and offers 20 kg of rice free for card holders and made it universal. There have been similar schemes of supply of rice at low prices by other states like Andhra Pradesh that introduced the measure nearly two decades ago. There has been widespread interest in other states adopting this strategy. P Chidambaram, campaigning together with DMK’s M Karunanidhi for the 2004 T N Assembly elections must have been impressed with the magic of DMK’s Rs.2 per kg rice election platform that proved such a great vote garner. And possibly persuaded the NAC headed by Sonia Gandhi to adopt this stratergy.

So, the Food Security Bill appears an extension of this popular measure which has wide electoral appeal. But implementing this massive programme bristles with numerous problems. 

How to procure such a large quantity?

First and foremost of these relates to the procurement of foodgrains needed in massive quantities. The expert committee on National Food Security Bill headed by Dr C Rangarajan estimated that the food requirement can go up to 74 MT. The highest procurement so far was 59 MT of wheat and rice in 2008-09. The average in recent years has been around 30 per cent of production. Since the peak production of the two cereals so far had been 188 MT, procurement at current levels can be in the region of 56 MT. So, procuring at much higher levels of 74 MT is fraught with issues relating to much higher efforts, funding and subsidies. The higher level of procurement could also lead to sucking surpluses in open market which in turn may lead to higher prices.

Farmers/traders oppose…

Farmers’ bodies and large sections of traders, apart from political parties, are bound to oppose the Food Security Bill. Sharad Joshi of the Shetkari Sanghatana and the Head of Bharatiya Kisan Union expressed concern over the bill that would “greatly distort the market mechanism and reduce the bargaining power of farmers.” They point to the vastly expanded procurement that would impact on the minimum support price necessitated by the low food grain price. Farmers’ groups also cautioned that grains offered at heavily subsidised rates “will take away the incentive for small and marginal farmers to grow food-grain.”

The middle class also expresses concern over prices of quality grains shooting up. Tamil Nadu provides the proof; even while the State has been offering rice free at the universal PDS, the price of good quality rice in the open market in Chennai is an unprecedented Rs 50/kg plus and this in a year when rice production in the country crossed 100 MT!

Heavy subsidy…

The second major issue relates to higher levels of subsidies. One estimate puts it at around Rs 120,000 crore. This can have serious implications on an already large deficit.

The third one relates to handling storage and distribution of such large quantities. Even at present the public distribution system suffers from several serious handicaps like wastages in storage and poor quality. Grains distributed through nearly five lakh fair price shops spread over the country is of low quality. Even in Tamil Nadu where there are claims on an efficient distribution mechanism, complaints of leakages, short deliveries, poor quality and diversion are rampant. The condition of thousands of fair price shops in Chennai and other places is extremely poor. Buildings are in dilapidated condition and lacks in hygiene. How a vastly stepped up volume is going to be handled under this background?

Can’t target the beneficiaries…

Four decades after setting up the PDS, the country has not found a solution to targeting the beneficiaries. In a country where a mere three per cent of the population are income tax assessees and where more than 90 per cent are self-employed with  no registration and no reliable data on their income levels, it is impossible to arrive at reliable income data of households. Tamil Nadu provides a classic instance of more number of colour TV sets claimed to have been distributed by the DMK government than the number of households! This is one of the reasons why the state opted for universal public distribution system and not one that targets the most deserving weaker sections.  Census data, Aadhaar scheme and others have not been as yet reliable base for targeting the beneficiaries. Vast numbers of traders, professionals including doctors, chartered accountants and lawyers routinely suppress their incomes. The attempts of Planning Commission on defining income levels below which the benefits should go have been shot down. This task is bound to defy solution.

Neglect of supply side…

IE has been pointing to the neglect of the supply side of this whole plan. For years, food production has been either stagnant or has been growing at a slow pace at an average of less than three per cent per annum. There have also been wild fluctuations. Productivity levels have been abysmally low. With fragmented land holdings, there has been little application of science, technology or management. The immediate need is to work towards agglomeration of land holdings. A certain minimum size of, say, 25 acres of contiguous land can lend for mechanisation and the adoption of modern scientific practices. This alone can help achieve quantum growth. Punjab and Rajasthan have amended their land acts that provide for leasing of land over 15 years and more without alienating ownership. Such change has to come about across the country within stipulated time. Thousands of agriculture graduates produced by the dozens of agriculture universities and colleges prefer to work as pen pushers at banks or government offices and rarely on farms. Unless this situation changes and food production achieves a quantum growth, attempts at providing food security cannot make much progress.

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IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
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