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LATEST NEWS UPDATES | We dont have enough food to feed everyone! by Dipa Sinha

We dont have enough food to feed everyone! by Dipa Sinha

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published Published on Jan 17, 2011   modified Modified on Jan 17, 2011

The Rangarajan committee further dilutes the proposals for the food security bill
 
The Rangarajan committee set up by the Prime Minister to examine the recommendations of the NAC on the food security bill has submitted its report. It is not surprising to see that it has argued against even the minimalist framework of the NAC saying that expanding the PDS is impossible due to procurement and fiscal constraints. Although the full report has not yet been made public, from reports in the newspapers it is quite clear that the arguments of the committee are quite baseless.
 
The Rangarajan committee has recommended that the legal guarantee to PDS foodgrains be restricted only to the “Priority” group of the NAC, while those in the “General” category may be given foodgrains at prices equivalent to the MSP in quantities based on current availability. This basically means status quo, with increased prices for those not identified as being poor. The NAC’s priority category is nothing but BPL – as it is also pegged to the poverty line (as defined by the Tendulkar Committee’s report). This poverty line has already been accepted by the Food Ministry and in any case allocations were going to be made on this basis. Therefore, the intervention of the NAC or introducing a food security bill where PDS foodgrains are guaranteed only to this group does not cover a single extra household than that will already be included. The only difference is that the price paid by those identified to be “priority” will be less than the current “BPL” prices and the same as the current Antyodaya prices. Do we require an Act to do this?
 
Currently, in principle all households that are not identified as being BPL are entitled to an APL card and whatever rations the state government provides for the APL category. This varies from state to state, ranging from 10kgs per month to 35kgs per month. What is being proposed is exactly such a system, however with even higher prices (current APL prices are about 50% of the MSP) and no guarantee. Further, an exclusion of 10% of rural households and 50% of urban households, which does not exist now, is also being proposed. Therefore, while the proposed framework for the Act (by the Rangarajan committee) is decreasing prices for a small section of those who are identified as being poor (and are not currently in the AAY category); 25% of the population is completely excluded from the system (one can imagine how many errors there will be in identifying these excluded households) and the rest get foodgrains if there is a residual and that too at almost double the prices.
 
Many states across the country have recognised the problems with targeting and have expanded the PDS coverage by using their own methods of identification. In order to give a larger number of households foodgrains at BPL (or even lower) prices, the state governments lift their entire APL allocations and provide the additional subsidy. In case the allocations to state governments are made only on the basis of the “priority” households and some residue amount for the rest, the burden on the state governments will also increase, making it difficult for state governments to continue with expanded PDS.
 
The Rangarajan committee seems to have raised two more issues – one in relation to prices and the other for use of technology such as smart cards for the distribution of foodgrains. It has argued that if the government increases procurement, thereby procuring a large amount of foodgrains that come into the market, the prices in the open market will increase as result of the ‘shortage’ created. This, they argue will hurt the poor as even if they get 35kgs from the PDS, they still have to buy some foodgrains from the market. This is an absurd argument, being made only confuse the media and the general public. If all the grain that is procured is indeed distributed (isn’t that the purpose after all?) then there is no question of prices rising. In fact, when the government becomes a hoarder, as it is now, holding large stocks of foodgrain without distributing them, that’s when it contributes to food inflation. Or of course, if it has plans to export the entire grain it procures or just dump it in the Indian Ocean, even then prices will increase. But if the enhanced procurement is indeed for expanded distribution, this will have no effect or indeed can decrease market prices if even a substantial amount of the foodgrains is available at such low prices, universally.
 
This committee also seems to have recommended the use of smart cards in place of the existing ration cards which will eventually enable households to buy rations from “any” shop. This recommendation is probably the one that exposes the true intentions of the committee and a large section of the government. The idea of allowing any shop to sell PDS commodities and transferring the subsidy amount directly to the households, is the first step towards dismantling the PDS system. This would easily be followed by direct cash transfers to poor households, instead improving delivery structures.
 
While there is a case for direct cash transfers in some cases, such as maternity entitlements or old age pensions, replacing the PDS system with cash transfers can be disastrous. The PDS has a role to play in making available minimum foodgrains to all households at affordable prices, encourage foodgrain production through enhanced procurement, transfer foodgrains from surplus to deficit areas while maintaining prices and so on. In fact, what is required is a massive expansion of the PDS by universalising coverage and including other essential items such as pulses and oils.
 
The Rangarajan committee’s recommendation is a clear indication of the orientation of the present government. In spite of all the talk about “inclusive” growth, it is clear that the entire focus is only on making the rich comfortable while hoping that the poor will take care of themselves. While boasting of a 9% growth rate and how India is ‘emerging’, those in power continue to hide behind the excuse of lack of resources when it comes to spending for the poor. The bizarre projection (which surely is based on some sophisticated econometric model) that India will be capable of procuring the foodgrains required for the PDS, if it is expanded to meet the NAC’s framework, only in 2039 indicates how hopeless this government is! But this is probably the best that can be expected from a bunch of neo-liberal economists pretending to be apolitical.

Pragoti, 10 January, 2011, http://www.pragoti.org/node/4266

Tagged with: Right to Food



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