Sunday, 2 June 2013

National Food Bill: A short review of the critiques

Picture from Forbes India
What? The National Food Security Bill aims to  provide food to 67% of India's 1.2 billion people by distributing heavily subsidized food grain (5kg of grain @ Rs.1/kg). First introduced in 2011, the bill has invited heated debate, caused parliamentary disruptions and is yet to be passed. 

Why the criticism?  
  • Where will the money to finance the scheme come from? Gurcharan Das argues that the key problem is "70% of the people will get food at 10% of the cost when only 1% should be targeted. The rest is a waste." The government plans to source some money for grain by reducing fertiliser subsidy but this will have implications for agricultural productivity and farmer input costs. Scheme touted as well-intentioned but fiscally irresponsible.
  • Targeting vs universalisation: Who do we target? The statistics are contradictory and one must be careful when defining and counting people who are 'hungry' vs 'malnourished' vs 'starving'. Regarding identifying beneficiaries, is is more prudent to identify the rich and exclude? Or identify the poor and include. Experts say the former may be easier because it is highly onerous for the poor to prove through paperwork that they are 'poor enough' to be eligible for benefits.
  • Only focuses on carbohydrates (through grain), what of malnutrition, chiefly due to protein deficiency? This is particularly alarming when considering the argument that  food security is necessary but not sufficient for nutrition security. NGOs have also flagged the issue of child malnutrition not being adequately addressed by the bill.
  • What of the system? How does one plug leakages and avoid bypasses (hoarding, black markets). Surjit Bhalla quotes statistics to show the PDS is "a massively corrupt, wasteful system" and argues against propagating a similar system without addressing systemic problems. 
  • Repercussions on food production: Will cause significant decrease in food production because a farmer who can buy grain at Rs. 1 per kg will have no incentive to grow grain it.  Also, will this result in India's forced integration into global agricultural markets because of increases in agricultural  imports?
  • The government hopes to reduce intermediaries and sources of leakages by  cash-for-food transfers into bank accounts, routing the transfers through Aadhaar numbers. However, the Aadhaar card is still a voluntary biometric social identity system. 


Way forward? Can the Chattisgarh model be upscaled? Chattisgarh  enacted the Chhattisgarh Food Security Act (CFSA) which has universal coverage. It's strengths are based on (a) full computerisation of PDS, (b) ensuring greater transparency by allowing for public scrutiny of all records, and (c) creating accountability by giving Gram Panchayats (local governance institutions) priority in running ration outlets strengthening accountability. One needs to question. How do we want to alleviate poverty? Is it by just giving food or empowering people to be able to grow/buy their own food and thereby enhancing capabilities? Gurcharan Das maintains that by giving virtually free assets, the state undermines its social contract with the public and "reinforces the present malaise over poor governance and corruption, and widens the gap between people’s aspirations and government’s performance". MNREGA has spawned a similar public expectation of right to work without strengthening livelihood securitySwaminathan Aiyer says that growth will lead to a food secure nation, not bills that distribute food to the poor.


References are linked within the text. Further reading:
  1. Khera, Ritika, 2012. The Revival of the PDS the National Food Security Bill and the Question of Cash Transfers [Video
  2. India-Seminar, June 2012 issue (#634) on 'Ending Hunger: a symposium on the proposed national food security bill' [Link]

2 comments:

  1. Most critical arguments of the food debate summarised very well.

    Another point that came up in my work in Bihar was that several families benefiting from the government's low cost grain schemes deemed the grain supplied to them as 'inferior'. So, they ended up selling these grains in the open market to buy 'superior' grains for their consumption. If the right to food proceeds with the PDS scheme, similar practices may continue. However, direct cash transfer would empower these families to directly buy the 'superior' grains from the market, although the scheme may itself have several lacunae.

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    1. That's very interesting. I didn't find it in the area I was working in becuase the households were very poor. Wonder what is the additional transaction cost of collecting inferior grain and then exchanging it in the market. Direct cash transfers would enable some households to buy 'superior' grains. But what of those who are excluded from the system because they aren't BPL or don't have an Aadhaar card? I am concerned that the original problem (of targeting) may not be solved adequately through DCT.

      "The biggest limitation of the cash transfer project, critics say, is that it won't solve the most fundamental problems in India's targeting of welfare subsidies. Biometric screening ensures that people trying to get benefits are who they say they are—and eliminates duplicate subsidies. But if a person is being excluded from benefits now because they aren't classified as below the poverty line, or is wrongly classified as eligible for benefits, nothing in the cash transfer program will detect that or change it.

      Meanwhile, there are limits to the program's ability to stamp out corruption. There is no reason a micro-ATM operator can't ask for a kickback when giving people their money, just as a postal worker might, the critics say. "If you're getting arm-twisted today, you'll get arm-twisted tomorrow," said Reetika Khera, a development specialist at the Indian Institute of Technology in Delhi."

      From an old, but relevant article: http://online.wsj.com/article/SB10001424127887324660404578202573452668586.html

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