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Resource centre on India's rural distress
 
 

Rushing it through
-The Business Standard


Time to question the assumptions behind the food Bill

In the midst of all the politicking as to how and when the draft food security Bill will become law, one thing at least is clear: the United Progressive Alliance (UPA) intends to push forward with the much-criticised legislation. UPA-II has little to show for four years in power, and perhaps it imagines that the Bill will somehow alter the public perception of its poor performance so far. Many have pointed out that passing an expensive Bill at a time when the government is straining every sinew to contain the fiscal deficit seems unwise; by some estimates, it will increase the food subsidy bill from Rs 90,000 crore in 2012-13 to Rs 1.3 lakh crore. That being said, it is possible that the government can claim that this is a sufficient priority that money will be saved elsewhere in order to pay for the Bill.

Indeed, the fiscal impact is not the main problem with the Bill. The problem is the current draft's narrow focus on nutrition through foodgrain. Rice will be available at Rs 3 a kilogramme, wheat at Rs 2 a kg, and coarse grains at Rs 1 a kg. Procurement might be stepped up - but it will, by many reliable estimates, remain around the 63.3 million tonnes of grain bought by the government anyway in 2011-12. Yet, if promulgated, this Bill will write into law the distortion of India's agriculture sector to serve only foodgrain. The drivers of inflation in recent years have been vegetables and high-protein foods; agriculture should be allowed to respond to these price signals. There are some signs that it is doing so; but not enough to make a sufficient difference to the price rise. This is because the government continually sets up incentives for farmers to produce more and more foodgrain. Meanwhile, states are taking advantage of central procurement to levy charges on the sale of grain in their mandis - in other words, central funds are causing states to compete in the distortion of their agricultural markets.

For too long the debate over the food security Bill has been cast as a question of hungry people versus basic fiscal responsibility. Actually, that's a false divide. The question should be how those who can't afford food receive it and not whether India can pay for their grain. Indeed, some of the basic assumptions of the need for the Bill deserve to be questioned. For example, are people as deprived of basic nutrition as some of the advocates of the Bill worry? The malnutrition figures for India, which the prime minister has described as a national shame, certainly indicate so. Indian children are more malnourished than those in sub-Saharan Africa, for example - one well-publicised report last year said 40 per cent of them exhibit symptoms associated with malnourishment. Some have persuasively argued that other evidence simply suggests that using international and ethnicity-blind indicators for height and weight to estimate malnourishment is causing a massive error in the numbers. Others have pointed out that symptoms of malnourishment can be due to reasons other than lack of food intake - poor sanitation, for example, can account for a vast proportion of the problem. The intent behind the food Bill is laudable. But it does not appear to be the best solution to the perceived problem.