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The Political Economy of Hunger in 21st Century India

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The Political Economy of Hunger in 21st Century India

  1. 1. PERSPECTIVES The all-India averages do not capture The Political Economy the wide variation across states and even within states. For example, the India State of Hunger in 21st Century India Hunger Index 2008 (brought out by the International Food Policy Research Insti- tute) shows very large differences across Jayati Ghosh 17 major states, ranging from 13.6 for Pun- jab to 30.9 for Madhya Pradesh. If these It is apparent that despite the uestions of food security and the states could be compared to countries in right to food have become urgent the Global Hunger Index rankings, somepersisting food insecurity of the Q political issues in India today. states in India have index scores at the bulk of the population and the This is not surprising, since rapid aggre- bottom: Bihar and Jharkhand rank lower near-emergency with respect to gate income growth over the past two dec- than Zimbabwe and Haiti, and Madhya the nutrition of children, women ades has not addressed the basic issue of Pradesh falls between Ethiopia and Chad. and other vulnerable groups, the the need to ensure food security of the Table 1 (p 34) gives some idea of the population. Instead, nutrition indicators variation among major states and also Government of India is still not have stagnated and per capita calorie con- shows how India is placed as a whole in re- taking the job of ensuring sumption has actually declined, suggest- lation to other Asian countries. It is evident universal food security with ing that the problem of pervasive hunger that India’s performance with respect to may have got worse rather than better. hunger is abysmal, particularly in relationsufficient seriousness. Its attitude to other large developing countries like towards meeting its 2009 election 1 Evidence of Food Insecurity China, but even in comparison to the rest promise of legislating a Consider the evidence on nutritional out- of south Asia, with only Bangladesh having comprehensive Food Security Act comes from the most recent National Fam- a higher value of the index. Indeed, India’s ily Health Survey (NFHS) conducted in index value is close to that of Zimbabwe, ais an example of this lack of 2005-06. According to this, 46% of chil- country which is in the throes of severe hy- seriousness. Political and social dren below three years are underweight; perinflation and collapse of d omestic food mobilisation around this issue, 33% of women and 28% of men have a markets. Within India, some of the suppos- to make it a resonant demand Body Mass Index (BMI) below normal; edly richest states with most rapid recent 79% of children aged 6-35 months have growth of GDP, such as Maharashtra, Kar-that cannot be ignored, is anaemia, as do 56% of ever married women nataka and Gujarat, perform very poorly therefore essential. aged 15-49 years and 24% of similar on the hunger index, clearly much worse men; and 58% of pregnant women. The than Kerala but even worse than Assam. national averages mask locational differ- West Bengal is close to the middle among ences: all these indicators are much worse the major states, and slightly below the na- in rural India. tional average in terms of the hunger Further, these indicators have scarcely in dex, which means that it is an important changed, or have changed very little, policy concern also within this state. since the previous NFHS in 1998-99. In The recent rise in food prices in India is terms of calorie consumption the picture likely to have made matters much worse, is even worse. According to the National and the effects of the global crisis on em- Sample Survey Organisation (NSSO) large ployment and livelihoods within the coun- survey of 2004-05, the average daily try are likely to cause a further deteriora- intake of calories of the rural population tion in people’s access to food. Clearly, has dropped by 106 kcal (4.9%) from therefore, food security is currently one of 2,153 kcal to 2,047 kcal from 1993-94 to the most important policy areas, and de- 2004-05 and by 51 kcal (2.5%) from 2,071 mands stressing a rights-based approach to This is an edited, condensed and updated to 2,020 kcal in urban areas. The average public food strategy have gained ground. version of the text of the Brajamohan Sarma daily intake of protein by the Indian Memorial Lecture delivered in Guwahati population decreased from 60.2 to 57 2 Global Food Crisis on 2 October 2010. grams in rural India between 1993-94 The most loose definition of food security Jayati Ghosh (jayatinu@gmail.com) is at the and 2004-05 and remained stable at is one in which the population does not Centre for Economic Studies and Planning, around 57 grams in the urban areas dur- live in hunger or fear of starvation. But Jawaharlal Nehru University, New Delhi. ing the same period. recent definitions have been more stringent. Economic & Political Weekly EPW october 30, 2010 vol xlv no 44 33
  2. 2. PERSPECTIVES According to the Food and Agriculture access to food by different social catego- Any programme of national food secu- Organisation (FAO), food security in a par- ries, and this too needs to be reckoned rity must be combined with a concentrat- ticular society exists “when all people, at with. Malnourishment is closely linked ed focus on improving foodgrain produc- all times, have access to sufficient, safe to poor sanitation and other unhealthy tion in the country, so that we are not de- and nutritious food to meet their dietary practices, so that the provision of clean pendent upon imports in a volatile global needs and food preferences for an active drinking water, sanitation and access market. This requires much more atten- and healthy life”. to other basic amenities as well as tion to the requirements of farmers, and knowledge about correct or speedy implementation of the many re- Table 1: State Hunger Index, 2007 State Prevalence Proportion ofUnder-Five Hunger Hunger desirable eating habits, are forms that have already been suggested by of Calorie Underweight Mortality Index Index all necessary. the Farmers’ Commission to improve the Undernourishment Children Rate (%) Score Rank (%) < 5 Years (%) To begin with, national productivity and financial viability of Punjab 11.1 24.6 5.2 13.63 1 food security requires in- farming, particularly of food crops. Kerala 28.6 22.7 1.6 17.63 2 creasing the domestic pro- To make this successful, it is also neces- Andhra Pradesh 19.6 32.7 6.3 19.53 3 duction of food, so that the sary to avoid instability in domestic prices Assam 14.6 36.4 8.5 19.83 4 country is not dependent of foodgrain and curb speculative tenden- Haryana 15.1 39.7 5.2 20.00 5 upon imports. This is not cies. This does not simply mean cracking Tamil Nadu 29.1 30.0 3.5 20.87 6 simply a matter of preferred down on hoarders, which is part of the Rajasthan 14.0 40.4 8.5 20.97 7 practice, but a policy impera- official publicity around any period of West Bengal 18.5 38.5 5.9 20.97 7 tive since it has huge strate- price rise. It also requires preventing spec- Uttar Pradesh 14.5 42.3 9.6 22.13 9 gic implications. India is a ulative activity in futures markets, whichMaharashtra 27.0 36.7 4.7 22.80 10 Karnataka 28.1 37.6 5.5 23.73 11 large country in most world means that there must be a ban on futures Orissa 21.4 40.9 9.1 23.80 12 food markets, in that its en- markets in all essential commodities. This Gujarat 23.3 44.7 6.1 24.70 13 try especially as an importer is especially important in the context of Chhattisgarh 23.3 47.6 9.0 26.63 14 can dramatically affect glo- the recent price volatility in world food Bihar 17.3 56.1 8.5 27.30 15 bal trade prices. (For exam- markets, which generated a global food Jharkhand 19.6 57.1 9.3 28.67 16 ple, India’s current produc- crisis in 2007-08, and which threatens the Madhya Pradesh 23.4 59.8 9.4 30.87 17 tion of rice is more than six world once again. India 20.0 42.5 7.4 23.30 times the total amount of It is also clear that the global food crisis China 7.1 rice traded in world mar- is not something that can be treated as Vietnam 12.6 kets.) Even the anticipation discrete and separate from the globalSri Lanka 15.0 of more imports by India can financial crisis. On the contrary it hasNepal 20.6 Pakistan 21.7 cause world trade prices to been intimately connected with it, partic- Bangladesh 25.2 rise. When this effect is com- ularly through the impact of financial Zimbabwe 23.8 bined with that of the specu- speculation on world trade prices of food. The calorie undernourishment indicator is based on a very low cut-off of 1,632 kcalslative forces described earlier, per person per day, to allow comparison with the Global Hunger Index. By contrast, the FAO assumes 1,800 kcal per person per day to be the minimum below whichthe result can be extremely Real Economy Factors there is moderate or severe undernourishment. Source: India State Hunger Index, IFPRI (2008). adverse. In any case, the This is not to deny the undoubted role of e xtreme volatility of global other real economy factors in affecting the It is evident that genuine food security food prices noted earlier makes it difficult global food situation. While demand-sup- among a population requires a wide range and undesirable to base a national food ply imbalances have been touted as rea- of features, all or many of which are asso- security policy on even partial import de- sons, this is largely unjustified given that ciated with the need for some public inter- pendence. Also, it is well known that there has been hardly any change in the vention. Ensuring adequate supplies of food can be used as a strategic weapon in world demand for food in the past three food requires increases in agricultural geopolitical terms. Therefore, the first years. In particular, the claim that productivity, possibly changes in cropping priority of a national food policy must be foodgrain prices have soared because of patterns and certainly the sustained via- to increase domestic food production more demand from China and India as bility of cultivation, all of which would be through improved agricultural produc- their GDP increases, is completely invalid, necessary at both local and national levels. tivity. This requires making cultivation since both aggregate and per capita con- Making sure that food can be accessed by financially viable as well as more pro- sumption of grain have actually fallen in all the people requires that they have the ductive, through a range of measures both countries. Supply factors have been purchasing power to buy the necessary such as those described earlier. A policy - and are likely to continue to be - more food, which, in turn, means that employ- of providing minimum support prices significant. These include the short-run ment, remuneration and livelihood issues that reach all farmers is an essential effects of diversion of both acreage and are important. Social discrimination and part of this, and should be part of a food crop output for biofuel production, as exclusion still play, unfortunately, large voluntary rather than forced system of well as more medium-term factors such as roles in determining both livelihood and public procurement. rising costs of inputs, falling productivity 34 october 30, 2010 vol xlv no 44 EPW Economic & Political Weekly
  3. 3. PERSPECTIVES because of soil depletion, inadequate pub- input dealers. As a result, prices for seeds, wheat and rice. Once again, official policy lic investment in agricultural research fertilisers and pesticides have increased has been tardy in considering such prob- and extension, and the impact of climate quite sharply. There have also been lems, much less in addressing them. change that has affected harvests in dif- attempts in most developing countries to The lack of attention to relevant agri- ferent ways. reduce subsidies to farmers in the form of cultural research and extension by public Two policy factors affecting global food lower power and water prices, thus adding bodies has denied farmers access to neces- supply require special note. The first is the to cultivation costs. Costs of cultivation sary knowledge. It has also been associated biofuel factor: the impact of both oil prices have been further increased in most de- with other problems such as the excessive and government policies in the United veloping countries by the growing diffi- use of groundwater in cultivation, in- States (US), Europe, Brazil and elsewhere culties that farmers have in accessing in- adequate attention to preserving or regen- that have promoted biofuels as an alterna- stitutional credit, because financial liber- erating land and soil quality, and the over- tive to petroleum. This has led to significant alisation has moved away from policies of use of chemical inputs that have long-run shifts in acreage to the cultivation of crops directed credit and provided other more implications for both safety and produc- that can produce biofuels, and diversion of profitable (if less productive) opportuni- tivity. Similarly, the ecological implica- such output to fuel production. For example, ties for financial investment. So many tions of both pollution and climate in 2007 the US diverted more than 30% of farmers are forced to opt for much more change, including desertification and loss its maize production, Brazil used half of expensive informal credit networks that of cultivable land, are issues that have its sugar cane production and the Europe- have added to their costs. been highlighted by analysts but largely an Union (EU) used the greater part of its In addition, there is the impact of recent ignored by policymakers in most coun- vegetable oil seeds production as well as climate change, which has caused poor tries. Reversing these processes is possi- imported vegetable oils to make biofuel. In harvests in different ways ranging from ble, and of course essential. But it will addition to diverting corn o utput into non- droughts in Canada and Australia to ex- take time, and will also require not only food use, this has also r educed acreage for cessive rain in parts of the US. Scientists substantial public investment but also ma- other crops and has naturally reduced the are projecting that warmer and earlier jor changes in the orientation and under- land available for producing food. growing seasons will increase crop sus- standing of policymakers. ceptibility to pests and viruses, which are All this means that the number of hun- Neglect of Agriculture expected to proliferate as a direct result of gry people actually increased for the The second factor is the policy neglect of rising temperatures. Some more arid re- world as a whole, and particularly for cer- agriculture over the past two decades, the gions are already more drought-prone and tain developing regions. Far from halving impact of which is finally being felt. The in danger of desertification. The rapid or even decreasing, the number of mal- prolonged agrarian crisis in many parts of melting of glaciers in Asia is of huge con- nourished people globally increased by the developing world has been largely a sequence to China and India, where im- more than 50 million between the early policy-determined crisis. Inappropriate portant rivers such as the Yangtze, Yellow 1990s and mid-2000s (Chart 1). policies have several aspects, but they all and Ganges are fed by such glaciers. This This was entirely because of increasing result from the basic neoliberal open market- will deprive the hinterland of much-needed hunger in the developing world, as the oriented framework that has governed irrigation water for wheat and rice crops numbers declined in developed countries. economic policymaking in most countries during dry seasons. This is of global sig- East and south-east Asia also showed over the past two decades. One major ele- nificance since China and India together good performance in terms of falling ment has been the lack of public invest- produce more than half of the world’s numbers of malnourished people, but ment in agriculture and in agricultural re- Chart 1: Number of Undernourished People (millions) search. This has been associated with low Latin America and Caribbe an to poor yield increases, especially in tropi- North Africacal agriculture, and falling productivity of land. Greater trade openness and market Sub-Saharan Africa 2004-06 1990-92 orientation of farmers have led to shifts in West Asia acreage from traditional food crops that CIS Asia were typically better suited to the ecologi- cal conditions and the knowledge and re- South-east Asia sources of farmers, to cash crops that have East Asia increasingly relied on purchased inputs. South Asia But at the same time, both public provi- Developing sion of different inputs for cultivation and Countries government regulation of private input Developed Countries provision have been progressively re- World duced, leaving farmers to the mercy of 0 200 400 600 800 1000 large seed and fertiliser companies andSource: Report on State of Food Insecurity in the World 2009, FAO. Economic & Political Weekly EPW october 30, 2010 vol xlv no 44 35
  4. 4. PERSPECTIVES such numbers increased quite sharply in boost to the entry of new financial players others. In addition, it turns out that the south Asia (by 50 million) and sub-Saharan into the commodity exchanges. Unlike pass-through of global prices was ex- Africa (by 44 million). The surprise is producers and consumers who use such tremely high in developing c ountries in that the growing prevalence of hunger markets for hedging purposes, financial the phase of rising prices, in that domestic and food insecurity was associated with firms and other speculators increasingly food prices tended to rise as global prices relatively high GDP growth in several entered the market in order to profit from increased, even if not to the same extent r egions, such as India and countries in short-term changes in price. There was a (Chart 2). However, the reverse tendency Latin America. The contrast with east and consequent emergence of commodity in- has not been evident in the subsequent south-east Asia is a stark one, and points dex funds that were essentially “index phase as global trade prices have fallen. to the role of public policy in ensuring that traders” who focus on returns from chang- So both cultivators and food consumers aggregate income growth translates into es in the index of a commodity, by periodi- appear to have lost in this phase of ex- better provision of basic needs such as cally rolling over commodity futures treme price instability, with the only gain- food for the general population. c ontracts prior to their maturity date and ers from this process therefore being the financial intermediaries who were able to Chart 2: Index of World Oil and Food Prices 250 profit from rapidly changing prices. In many developing countries, includ-Oil price index ing India, food prices remained high and 200 even continued to increase during the pe- riod of falling global prices, and once Food price index again have risen with the increase in 150 world trade prices. As noted by FAO (2008) “In countries where prices have declined the reductions have been modest com- 100 pared to those in export markets and, gen- erally, national cereal prices remain above their levels of a year earlier. Persistent 50 high food prices in the developing world continue to affect access to food of large numbers of vulnerable population in both 0 2006M012006M07 2007M01 2007M07 2008M01 2008M07 2009M01 2009M07 2010M01 2010M07 urban and rural areas.” Therefore many Source: IMF Commodity price data online. developing countries in which widespread While this was the state before the reinvesting the proceeds in new contracts. and persistent hunger was already a prob- global economic crisis, the crisis obviously Such commodity funds dealt only in for- lem, such as India, have experienced sig- made matters much worse. The intensity ward positions with no physical owner- nificant increases in the prices of staple of the food crisis that hit many developing ship of the commodities involved. foods in the past two years, and domestic countries from 2008 was particularly on Thus international commodity markets food prices have not declined even after account of the very sharp global volatility increasingly began to develop many of the global trade prices started falling. in food prices. Globally, the prices of many features of financial markets; they became basic food commodities had not risen faster prone to information asymmetries and as- Legislation for the Right to Food for more than three decades. In fact, even sociated tendencies to be led by a small It is clearly important for the government in recent years, food prices internationally number of large players. Far from being to be aware of the need for a multi- had shown only a modest increase until “efficient markets” in the sense hoped for pronged approach to the problem that has early 2007. But thereafter they zoomed by mainstream theory, they allowed for to extend beyond a legal promise if it is to up, with an increase of around 40% in inherently “wrong” signalling devices to be successful. Even so, a legal commitment world food prices over 2007. This trend become very effective in determining and to public food distribution can also play a accelerated in the first few months of manipulating market behaviour. The result role in extending and improving public 2008, but then from mid-2008 prices fell was the excessive volatility displayed by food delivery so that it reaches all the peo- sharply and only started to rise again from important commodities over 2008 - not ple. Public procurement has to be com- early 2009. only the foodgrains and crops mentioned bined with public distribution. A law that Such wild swings in prices cannot be here, but also minerals and oil. Such vola- ensures universal food access and assigns explained by seasonal supply and demand tility had very adverse effects on both culti- responsibility and culpability would force factors or any other “real economy” vators and consumers of food. This was governments at both central and state lev- tendencies. Instead, they are clearly the not only because it sent out confusing, mis- els to take up the entire gamut of issues, result of speculative activity in these mar- leading and often completely wrong price which relate not just to actual food distri- kets. Financial deregulation in the early signals to farmers that caused over-sowing bution but also to its production and pat- part of the current decade gave a major in some phases and under-cultivation in terns of consumption, so as to eventually 36 october 30, 2010 vol xlv no 44 EPW Economic & Political Weekly
  5. 5. PERSPECTIVES ensure genuine food security. The key majority of the population from the ambit per month, that would come to around 90 point here is that such a law must guaran- of public provision. To deal with food million tonnes. At current levels of sub sidy tee universal access. insecurity in an effective manner, it is this would cost around Rs 1,20,000 crore. Yet the versions of the proposed “Right counter productive to base public food pro- This may seem like a lot, but the current to Food” bill that have been circulated, vision on a predefined group of the “poor”, food subsidy already amounts to around first by the central government to the which would deprive a large number of Rs 50,000 crore, so this is an additional states, and then by the National Advisory others who are also food-insecure. Rs 70,000 crore - or around 1.5% of GDP. Council (NAC) are travesties of the origi- Part of the reason for this relates to the Surely this is not too much to allocate to nal promise and negations of the spirit of third problem, the absence of any notion ensure that no one goes hungry in what ensuring genuine food security. of dynamics in a rigid law that defines should be a civilised society. In any case, There are many reasons why targeted “poor” and “vulnerable” households in a compare the amount of Rs 70,000 with schemes for the below the poverty line static sense and changes the group only at the huge amounts (nearly Rs 3,00,000 (BPL) population, and this one in parti- infrequent intervals. Households - and crore) that have been given away as tax cular, are unlikely to work. Most signi- people within them - can fall in or out of benefits and other concessions to corpo- ficant of all, there are the well known poverty, however defined, because of rates over the past year, and it becomes a errors i nherent in targeting, of unjustified changing material circumstances. Simi- trivial amount. exclusion of the genuinely poor and un- larly they can also go from being food- warranted inclusion of the non-poor. secure to food-insecure in a short time. Right to Food Proposals These are not simply mistakes that can The reasons can vary: crop failures, sharp This approach also leads to implementa- occur in any a dministrative scheme, rises in the price of food, employment col- tion requirements which are so inconsist- they are inbuilt into systems that try to lapses, health issues that divert house- ent as to be laughable. Thus one Concept provide scarce goods to one section of hold spending, the accumulation of debt, Note of the government declares that “it any population. In hierarchical and dis- and so on. Monitoring each and every shall be the responsibility of the state gov- criminatory societies like India, where household on a regular basis to check ernments to identify without inclusion or social and economic power is unequally whether any of these or other features exclusion errors (emphasis added) as per distributed, it requires no imagination to has caused it to become food-insecure is the number fixed by the...Government of realise that making a scarce good (cheap not just administratively difficult, it is India.” But this is impossible since not food) supposedly available only to the actually impossible. only are Planning Commission estimates poor is one of the easiest ways to reduce This is why all successful programmes survey-based and therefore technically their access. of public food distribution, across socie- random numbers, these are based on the The second problem relates to the dis- ties, have been those that have gone in for dimension of household consumption, tinction between food insecurity and pov- universal or near universal access. This which can vary considerably for the same erty as currently defined. It is evident provides economies of scale; it reduces the household from one day to another. So from NSSO and NFHS surveys that the transaction costs and administrative has- these estimates cannot be used as a defini- proportion of the population that is sles involved in ascertaining the target tive guide to the exact number of the poor nutritionally deprived is significantly group and making sure it reaches them; it on any subsequent day, and so to expect larger than the “poor” population, and in allows for better public provision because there to be no errors of either exclusion or many states they are not completely over- even the better off groups with more po- inclusion would be statistically impos- lapping categories either. For example, litical voice have a stake in making sure it sible. Further, if the state government the Planning Commission estimate of works well; it generates greater stability finds that its own estimates of poverty are rural income poverty based on the in government plans for ensuring food higher than those determined by the National Sample Survey 2004-05 was production and procurement. Even among central government, how can it possibly 28%, but the same survey indicated calo- the states of India, those that have a better avoid errors of unfair exclusion? And rie deficiency (at less than 2,200 kcal per record of public food distribution are who is supposed to be l egally culpable if day) among 70% of the rural population, those that have gone in for near- universal there are indeed found to be such errors more than double the poverty estimate! access. Kerala, Tamil Nadu and Andhra of exclusion? Other estimates from the NFHS point to Pradesh all have defined BPL in such an Given the continuing possibility, indeed widespread anaemia and low BMI among inclusive way that the vast majority of the likelihood, of substantial exclusion of the a majority of the population, especially population is included, which makes their hungry from the access given to BPL women and children. schemes close to universal. households, the lack of any real provision Therefore equating poverty and hunger The notion that a universal scheme that for the above poverty line (APL) popula- is fallacious: there may be a significant provides subsidised food to all households tion is especially worrying. There is a cur- overlap, but solving the problem of wide- is too expensive is not tenable either. Con- sory mention of such households, that spread hunger and undernutrition re- sider the maximal possible estimate of “For APL families in food-deficit states (em- quires a more comprehensive and inclu- such spending. If all households in the phasis added) depending upon the availa- sive approach that does not remove the country are provided 35 kg of foodgrain bility in the central pool, the central Economic & Political Weekly EPW october 30, 2010 vol xlv no 44 37
  6. 6. PERSPECTIVES Ministry of Food and Public Distribution poorest in the Antyodaya and Annapurna Commission’s 2004-05 poverty estimates. The general households (44% in ruralmay make some allocations of foodgrains schemes; the lack of any specification of areas and 22% in urban areas) should at issue prices, which will not be lower the price at which such foodgrain is to be have a monthly entitlement of 20 kgs than the cost of acquisition.” This ex- made available; and so on) seem to be (equivalent to 4 kgs per person) at a price tremely restricted and parsimonious minor, troubling though they are. That is not exceeding 50% of the current Minimum allocation from the centre would inflict because the kind of legislation described Support Price for millets, wheat and rice (NAC, “Gist of Decisions of Meeting ofsevere damage on those states that have in this document is so far off-track as to be 23 October 2010”). managed to develop functioning and the very opposite of a genuine right to near-universal systems of public food dis- food legislation. It is not difficult to imagine the fate of tribution, such as Kerala and Tamil Nadu, In conclusion, therefore, it is apparent such an extraordinarily complicated and make it far more difficult for other that despite the persisting food insecurity scheme with varying entitlements, prices states to follow suit to improve basic food of the bulk of the population and the near- and coverage. Indeed, quite apart from access for all. emergency with respect to the nutrition of problems of leakage, diversion and misap- In any case, the central pool of food- children, women and other vulnerable propriation (which it is absurd to believe grains in a system such as that proposed groups, the government is still not taking that schemes like UID and using “smart by this document would tend to be ex- the job of ensuring universal food security cards” can solve), the sheer administrative tremely small and may not even exist, be- with sufficient seriousness. Political and costs of such an elaborate system are cause the purported bill allows state gov- social mobilisation around this issue, to likely to outweigh the supposed gains ernments to replace physical provision make this a resonant demand that cannot resulting from differential prices. In the with a system of cash transfers to those be ignored, is therefore essential. current context, it would probably be far identified as poor. “Depending upon more sensible to provide universal access choice of State Governments, instead of Postscript to foodgrains at a common price, even if allocating foodgrains under TPDS, the The decision by and recommendations of it is slightly higher, rather than such a Ministry of Food and Public Distribution the NAC last week make the proposals for convoluted system. may transfer equivalent subsidy as cash food entitlement even more complicated grant to such State Governments. ...The than the targeted schemes that have References State Governments may distribute the already been seen to be impracticable. FAO (2008): Crop Prices and Food Situation, Food and Agriculture Organisation, Rome, http://www.fao. equivalent food subsidy in cash to identi- Thus, the NAC recommends that org/docrep/011/ai476e/ai476e01.htm, accessed on fied BPL families.” The priority households (46% in rural areas 26 March 2009. and 28% in urban areas) should have a Ministry of Consumer Affairs, Food and PublicIt is absurd to imagine that the systems monthly entitlement of 35 kgs (equivalent Distribution: “Concept Note on the Proposed of power, discrimination and corruption National Food Security Act”, circulated to state to 7 kgs per person) at a subsidised price that operate to prevent the poor from gov ernments in February 2010. of Re 1 per kg for millets, Rs 2 for wheat NAC: “National Food Security Bill: Proposal to NAC access to public foodgrains would not and Rs 3 for rice. Rural coverage can be on 30 August 2010 on Behalf of NAC Working operate at all when the strategy is straight- adjusted state-wise based on the Planning Group”, 30 August 2010. forward cash transfer. Indeed, the likeli- hood of large-scale diversion and denial to the deserving is even greater. In any case it is not clear if the amount of the cash transfer would actually compensate for the denial of actual foodgrains. Most of all, the basic purpose of the public procurement and distribution system, of providing an incentive price to farmers for foodgrain production and ensuring the distribution of such food to deficit areas, would be completely lost in a system of cash transfers, which amounts to an effective destruction of the PDS rather than a genuine attempt at reform and strengthening. Compared to these massive flaws, the other problems in the purported draft bill (such as the reduction of the amount of foodgrains to be provided from 35 kg per month per household to 25 kg; the elimination of special provision to the 38 october 30, 2010 vol xlv no 44 EPW Economic & Political Weekly
  7. 7. PERSPECTIVES Ministry of Food and Public Distribution poorest in the Antyodaya and Annapurna Commission’s 2004-05 poverty estimates. The general households (44% in ruralmay make some allocations of foodgrains schemes; the lack of any specification of areas and 22% in urban areas) should at issue prices, which will not be lower the price at which such foodgrain is to be have a monthly entitlement of 20 kgs than the cost of acquisition.” This ex- made available; and so on) seem to be (equivalent to 4 kgs per person) at a price tremely restricted and parsimonious minor, troubling though they are. That is not exceeding 50% of the current Minimum allocation from the centre would inflict because the kind of legislation described Support Price for millets, wheat and rice (NAC, “Gist of Decisions of Meeting ofsevere damage on those states that have in this document is so far off-track as to be 23 October 2010”). managed to develop functioning and the very opposite of a genuine right to near-universal systems of public food dis- food legislation. It is not difficult to imagine the fate of tribution, such as Kerala and Tamil Nadu, In conclusion, therefore, it is apparent such an extraordinarily complicated and make it far more difficult for other that despite the persisting food insecurity scheme with varying entitlements, prices states to follow suit to improve basic food of the bulk of the population and the near- and coverage. Indeed, quite apart from access for all. emergency with respect to the nutrition of problems of leakage, diversion and misap- In any case, the central pool of food- children, women and other vulnerable propriation (which it is absurd to believe grains in a system such as that proposed groups, the government is still not taking that schemes like UID and using “smart by this document would tend to be ex- the job of ensuring universal food security cards” can solve), the sheer administrative tremely small and may not even exist, be- with sufficient seriousness. Political and costs of such an elaborate system are cause the purported bill allows state gov- social mobilisation around this issue, to likely to outweigh the supposed gains ernments to replace physical provision make this a resonant demand that cannot resulting from differential prices. In the with a system of cash transfers to those be ignored, is therefore essential. current context, it would probably be far identified as poor. “Depending upon more sensible to provide universal access choice of State Governments, instead of Postscript to foodgrains at a common price, even if allocating foodgrains under TPDS, the The decision by and recommendations of it is slightly higher, rather than such a Ministry of Food and Public Distribution the NAC last week make the proposals for convoluted system. may transfer equivalent subsidy as cash food entitlement even more complicated grant to such State Governments. ...The than the targeted schemes that have References State Governments may distribute the already been seen to be impracticable. FAO (2008): Crop Prices and Food Situation, Food and Agriculture Organisation, Rome, http://www.fao. equivalent food subsidy in cash to identi- Thus, the NAC recommends that org/docrep/011/ai476e/ai476e01.htm, accessed on fied BPL families.” The priority households (46% in rural areas 26 March 2009. and 28% in urban areas) should have a Ministry of Consumer Affairs, Food and PublicIt is absurd to imagine that the systems monthly entitlement of 35 kgs (equivalent Distribution: “Concept Note on the Proposed of power, discrimination and corruption National Food Security Act”, circulated to state to 7 kgs per person) at a subsidised price that operate to prevent the poor from gov ernments in February 2010. of Re 1 per kg for millets, Rs 2 for wheat NAC: “National Food Security Bill: Proposal to NAC access to public foodgrains would not and Rs 3 for rice. Rural coverage can be on 30 August 2010 on Behalf of NAC Working operate at all when the strategy is straight- adjusted state-wise based on the Planning Group”, 30 August 2010. forward cash transfer. Indeed, the likeli- hood of large-scale diversion and denial to the deserving is even greater. In any case it is not clear if the amount of the cash transfer would actually compensate for the denial of actual foodgrains. Most of all, the basic purpose of the public procurement and distribution system, of providing an incentive price to farmers for foodgrain production and ensuring the distribution of such food to deficit areas, would be completely lost in a system of cash transfers, which amounts to an effective destruction of the PDS rather than a genuine attempt at reform and strengthening. Compared to these massive flaws, the other problems in the purported draft bill (such as the reduction of the amount of foodgrains to be provided from 35 kg per month per household to 25 kg; the elimination of special provision to the 38 october 30, 2010 vol xlv no 44 EPW Economic & Political Weekly

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