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.