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Centre seeks States' views on Food Security Bill by K Balchand

Gearing for the challenge of implementing the proposed Food Security Bill, Union Minister of State for Food and Public Distribution K.V. Thomas has decided to hold a conference of Chief Ministers to seek their views and cooperation.

Mr. Thomas toldThe Hindu that he had made a presentation of the proposed Bill to Defence Minister A.K. Antony, Finance Minister Pranab Mukherjee, Agriculture Minister Sharad Pawar and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

He expected the number of beneficiaries — below-poverty-line (BPL) families — to go up to 8.02 crore from the current 6.52 crore, if 75 per cent of the BPL list is to be covered. Another change in the proposed Bill is that each person will be given 7 kg of food grains a month. While this will not be any different from the current arrangement of providing 35 kg per family, a standard unit comprising of five members, families with more than five members will stand to benefit, while those with fewer would suffer a reduction in the entitlement.

The foodgrains requirement is likely to increase by about 10 million tonnes from the present 55 million tonnes, and the cost is expected to rise from Rs.83000 crore to Rs.1 lakh crore.

Mr. Thomas is aiming at solidifying the shape of the Bill over the next fortnight so as to be prepared in case the government intended to introduce it during the monsoon session of Parliament. The other reason for speeding up the process is to have a clear understanding of the financial burden and food grains requirement so as to chalk out the necessary strategy.

Creating storage space

A new command has been set up under the Cabinet Secretary to ensure the timely movement of food grains by rail. Mr. Thomas is now concentrating on creating the necessary storage space, in light of the promising agricultural production.

He expects to add at least 150 lakh metric tonnes of space by 2012 under the Private Entrepreneur Guarantee Scheme to the existing storage capacity of 633.62 lakh metric tonnes.

Only after the Bill gets finalised will the Ministry be able to assess its food grains requirement and decide on the quantity to be procured, exported, and on the stock limits of traders.

Mr. Thomas was cautious on making the additional procurement of 10 million tonnes as that would have its impact on the open market prices. He felt the current procurement of 30 per cent of the agricultural production might suffice given that the offtake by the States was never up to the mark.

Moreover, the Ministry is likely to take a decision, sometime in September, on offering a bonus on rice, which too will impact prices.

The current thrust, though, is on releasing the strain arising from the storage problem and making space for the new arrivals. One way is to remove the restriction on the stock limits of rice and sugar. A decision is likely to be taken in the next EGoM.

Mr. Thomas said a decision would be taken only in November after Onam, Dussehra and Diwali festivities, despite a good inventory. State governments, cooperatives and the private sector are pressing for a quick decision as mills have been paying a high price for sugarcane.

Ruling out an expansion of the export of rice, Mr. Thomas said the need for executing the food security entitlement had to be assessed first. Only exports through the diplomatic channels to Bangladesh and Afghanistan have been allowed — 3 lakh tonnes of rice to the former and 2.5 lakh tonnes of wheat to the latter.

Under-utilisation

Mr. Thomas, however, expressed concern at the failure of State governments to fully utilise the allocation of food grains made under the Open Market Sale Scheme (OMSS) and help provide relief to the common people.

Ten lakh tonnes of rice and an equal quantity of wheat allocations at subsidised rates had, in December, been made to the States in a bid to help them cope with inflation.

In his letter to the Chief Ministers, Mr. Thomas hoped they would gear their machinery to fully utilise the opportunity and make some profit in the bargain. The scheme would be valid, he cautioned, only until September 2011.

He, however, directed that not more than Rs.200 per quintal was to be added to the end retail price as distribution cost.