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LATEST NEWS UPDATES | Whither the food security law?-Himanshu

Whither the food security law?-Himanshu

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published Published on May 10, 2013   modified Modified on May 10, 2013
-Live Mint


The failure of the UPA government to get the food security Bill passed has exposed its hypocrisy

With the budget session of Parliament coming to an early close amid a political logjam, the food security Bill has been stalled again. The blame for this important legislation not winning parliamentary passage in the last four years rests entirely on the Manmohan Singh government, despite its last-minute posturing.

The Bill, which was cleared by the National Advisory Council (NAC) after deliberations lasting more than two years, within and outside the government, has never been a priority for the government. While the Congress-led United Progressive Alliance (UPA) government was willing to jeopardize its survival for the sake of foreign direct investment (FDI) in multi-brand retail, it never showed any urgency in getting the food security Bill enacted. This despite the fact that unlike on retail FDI, there are no sharp divisions between political parties on this legislation. Some have passed similar Bills in states run by them, for example, in Chhattisgarh. In some cases they have gone beyond what the Bill proposes on reforms of the public distribution system (PDS). As of now, there are some 12 states where the issue price of foodgrain sold through PDS is either equal to the proposed prices in the food security Bill or even lower. This is also true in terms of coverage-many states cover a greater percentage of citizens than what has been proposed under the Bill.

The mismanagement of the food economy, which has gone from bad to worse in the last three years, has also exposed the hollowness of some of the criticisms that have been used to scuttle the Bill. For example, one criticism was that foodgrain requirements under the Bill were onerous and made it infeasible. This argument falls flat given the procurement record in the last two years. Last year, the government procured 67 million tonnes of rice and wheat-a quantity way above the requirements envisaged under the food security Bill, as projected by the food ministry. Similar concerns about the inability of our agricultural sector in increasing foodgrain output to keep pace with the rise in food demand have fallen flat. Foodgrain production has risen more than 2% every year in the last five years.

The problem does not lie with procurement or production, but with distribution, which is what the Bill seeks to reform. The inability to enact the Bill and implement it has meant that much of the foodgrain procured in recent years has remained unutilized in the warehouses of the Food Corp. of India (FCI). The scale of the problem can be gauged by the fact that actual food stocks with FCI have been more than double the buffer stock requirements in the last two years. As on 1 April, the stocks were 60 million tonnes, almost three times the buffer stock requirement of 21 million tonnes.

After the rabi, or winter crop, harvest is completed, these stocks are expected to rise further and perhaps even cross 85 million tonnes, slightly more than the stock of 82 million tonnes in June last year. This is sufficient to cover their requirements of the food security Bill for the next two years even with lower procurement. It also exposes the underbelly of a perverse food stocking policy. This is a big reason why cereal prices have inched up in the last three months although overall inflation is declining.

Unfortunately, while the government has been reluctant to expand the distribution network to get rid of the food stocks, it has allowed exports to deplete the stocks. The recent announcement to allow exports at a time when international wheat prices are cooling is a clear indication of the priorities of this government, which does not mind subsidizing exports but is reluctant to distribute foodgrain in the domestic market. The fact that India is exporting more than 10 million tonnes of foodgrain to international markets clearly exposes the myth that the proposed food security Act will lead to shortages in the domestic market.

The good news is that with the delay in its passage, for all practical purposes the food security Bill has become as good as infructuous. And that has happened because unlike the central government, state governments have continued to improve PDS along with a reduction in the prices of food items on offer under it. As many as seven states now have an issue price of Rs1 or less for 1kg of PDS rice, one-third of what is proposed under the food security Bill. With Chhattisgarh passing its own food security Bill, more states are expected to follow suit, rendering the central legislation, if it is ever passed, meaningless for all practical purposes.

As against the state governments pushing for improvements in PDS and making it accessible to a greater number of citizens, the central government has not only delayed PDS reforms and passage of the food security Bill, but has shown greater alacrity in pushing for direct cash transfers to beneficiaries of welfare programmes. Needless to say, the failure of the government to get this Bill passed may not make much of a difference on the ground, but it has exposed the hypocrisy of the government.

Live Mint, 9 May, 2013, http://www.livemint.com/Opinion/nSCToZNLsZK7QfsiLwU4zM/Whither-the-food-security-law.html


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