The
promise made by UPA II that it will ensure food security
for Indians through legislation that guarantees the
Right to Food seems, in its view, to have been an
error. In a multi-stage process that reflects the
pulls and pressures within the policy-making elite,
the Food Security Bill has been diluted so much that
it marks a reversal rather than an advance compared
to the status quo.
Let us recall where the country stands in terms of
provision of access to food. In principle, even after
the implementation of the Targeted Public Distribution
System (TPDS), all sections of the population had
access to the PDS. They were of course split into
Below the Poverty Line (BPL) and Above the Poverty
Line (APL) households. But targeting essentially meant
that access to food of these two sections were at
different prices, both of which incorporated an element
of subsidy. Though the original intention was to provide
food to the BPL households at a subsidized price,
while APL households were expected to pay the full
economic cost, in practice, the central issue prices
were not raised on a regular basis. For example, having
been set at Rs. 415 and Rs. 610 a quintal for wheat
and Rs. 565 and Rs. 830 per quintal for wheat for
BPL and APL households respectively in July 2002,
they remained at that level, even as the minimum support
price (MSP) at which grain was procured rose. Everybody
was eligible for some subsidy relative to the economic
cost incurred by the FCI to procure, stock and deliver
the grain.
It is, of course, another matter that the inadequate
spread of the public distribution system, inadequate
allocations and other factors have ensured that not
everybody eligible has necessarily had access to supplies
at these prices. But as noted, in principle access
to food was assured for all, even if at differential
prices for BPL and APL families.
Given this background, improved management of the
food economy, requires four initiatives. The first
is the setting of the minimum support prices at levels
where the viability of cultivation is ensured and
food production made remunerative so that investments
in expanding supply in keeping with demands that would
emerge from a food secure society can be met domestically.
The second would be to ensure that the stocks procured
are reached to all those who want to buy them at prices
that are affordable. The subsidy provided should reach
the consumer and not be diverted to the FCI to cover
the costs of procurement and the carrying costs of
stocks that remain unsold, as has been occurring in
recent times. The third is to universalize access
to subsidized foodgrain since targeting tends to exclude
rather than include many needy consumers and is costly
to implement. And, finally, there is need to substantially
enhance public investment in rural infrastructure
and expenditure on extension services so as to improve
agricultural productivity. These ideas are not new.
Ever since the Green Revolution strategy was adopted
in India, the objectives have been to raise productivity
and production, ensure a remunerative price to farmers
and provide access at subsidised prices to consumers,
each of which was seen as a requisite for the realization
of the other two.
Rather than follow this track the UPA II government
decided to approach the issue anew, for which it handed
over the task of formulating the Food Security Bill
to the reconstituted National Advisory Council (NAC).
However, despite expectations created by the NAC’s
previous track record with respect to the Right to
Information and Employment Guarantee Acts, the NAC
seems to have turned cautious. Rather than blaze a
new trail it has ended up ''recognizing'' the supply
constraints that could hinder implementation of a
bill guaranteeing universal access to food through
a public distribution system.
Hence, to start with, while admitting the need for
a universal public distribution system, the NAC considered
recommending the staggered implementation of the proposal.
Some of its members reportedly argued that, since
there is not enough food to distribute, attempting
to offer every household 35 kgs of food at Rs 3 a
kg would take demands to levels where supply would
be short of demand. Hence, they argued, the shift
out of the system of targeted distribution to a universal
one should be initially restricted to 150 ''most disadvantaged
districts''.
Given the problems that are bound to accompany the
implementation of such a scheme of ''geographic targeting'',
this proposal had to be dropped. Instead, the NAC
decided to set a minimum to the degree and spread
of food access that should be provided, on the grounds
that, if supply and financial resources permitted
the government could exceed this minimum and even
opt for universalisation. There was no pressure of
course to rise above the floor.
The minimalist proposal, which was openly criticized
by NAC member Jean Dreze, not only went back on universal
provision but also avoided the simplicity (of the
kind that universal provision implies) that is a prerequisite
for successful implementation. The NACs proposals
restrict guaranteed access to 75 per cent of the population,
consisting of 90 per cent of the rural population
and 50 per cent of the urban population. Further,
this segment of the population is to be divided further
into a set of ''priority'' households amounting to
46 per cent of the rural population and 28 percent
of the urban population, and a set of ''general''
households consisting of 44 per cent and 22 per cent
of the identified rural and urban populations. Priority
consumers will be eligible for 35 kg of foodgrain
at the rate of Rs1/kg for millets, Rs2/kg for wheat
and Rs3/kg for rice. General consumers are to be eligible
for 20kg per household at half the minimum support
price for the grains. Moreover, the NAC has not given
up on phased implementation since the UPA II is expected
to reach in the current phase only 85 per cent of
the rural population and 40 per cent of the urban
population.
It should be obvious that this complicated scheme,
which would suffer from all the weaknesses of a system
of targeting, will if implemented successfully help
achieve one goal. It would allow the government to
manage with less supply since earlier both BPL and
APL populations were eligible for 35 kg. It would
also limit the subsidy relative to a situation where
the government guarantees universal access at a uniform
price.
Further, many states are already providing more and
cheaper access to food than the NAC recommends. In
Andhra Pradesh, Chhattisgarh and Tamil Nadu, access
to 35 kgs is being offered to a much larger share
of the population than in BPL households. In addition,
rice is being delivered through the PDS at Rs. 2 per
kg in a number of states and at Rs. 1 per kg in Tamil
Nadu. If the Centre implements the far more fiscally
conservative proposals of the NAC, the states involved
will have to find substantially more resources to
sustain the programmes they are already implementing,
raising the danger of a fiscal crisis in at least
some of them.
Interestingly, when a confused policy of targeting
is being proposed on the grounds that stocks adequate
to support a universal PDS do not exist, the actual
picture on the supply side seems to be one of excess
stockholding by the government. Not only is the size
of the government’s food grain stock much higher than
the buffer stocking norm, but the judiciary, parliament
and the media seems to be obsessed with the problem
of inadequate storage leading to the rotting of food
when the poor go hungry. With covered storage limited,
a substantial part of these stocks has to be stored
in the open, leading to losses. Unless the NAC believes
that its minimalist proposals are actually going to
increase demand for food substantially, this problem
of foodgrain rot in a country with hunger is likely
to persist. Moreover the subsidy bill could turn out
to be much larger than anticipated, since the FCI’s
costs would have to be covered.
Dissenting member Jean Dreze was clear. His dissenting
note stated that ''an opportunity [had] been missed
to initiate a radical departure in this field.'' In
his view: ''The NAC proposals [are] a great victory
for the government — they allow it to appear to be
doing something radical for food security, but it
is actually more of the same.
But this is not the end of the story. Once the NAC
had succumbed to the limited supplies argument, its
proposals could be easily attacked based on its own
premises. In a surprising development, the ostensibly
all-powerful NAC’s proposals were referred to another
committee, headed by C. Rangarajan, whose conservatism
on matters fiscal are well known. As was to be expected
the Rangarajan committee has reportedly declared even
the NAC’s diluted proposals infeasible on completely
spurious grounds.
According to newspaper reports, the committee has
recommended that a legal entitlement to a given quantity
of food at a fixed and subsidized price should only
be granted to the ''priority households''. The reasoning
as expected was that that the government does not
have assured access to foodgrain stocks to guarantee
even the NAC’s minimalist food security principles
for the ''general households.'' The argument seems
to be that while we should talk about food security,
we must reduce the actual reach of the PDS.
In a country where malnourishment is rampant, when
a government chooses to guarantee food security, and
that too through legislation that binds, it is adopting
a proactive position. It is in essence declaring that
given the scale of a particular problem (in this case
inadequate access to food), the government plans to
adopt a range of measures that would help it deliver
on issues that matter.
If having set itself on that trajectory and making
it an issue in the elections, it chooses to dilute
the programme on the ground that prevailing circumstances
limit its ability to deliver on its promise, it is
clearly being duplicitous. But this should not surprise
us. It has been an abiding characteristic of the Congress
that it does not implement in practice what it preaches
in its rhetoric. Unfortunately that ideology has served
it a bit too well.
