Battle against hunger

NAC miffed at Central Government trimming its version of the Food Security Bill

With no possibility of an early end to the onslaught by the opposition, if the Congress has something to bank on to sail through next year’s polls in key States like Punjab, Uttar Pradesh, Uttarakhand and Himachal Pradesh and to turn the tide again in favour of itself ahead of the 2014 Lok Sabha polls, it is undoubtedly the National Food Security Bill (NFSB).

An Empowered Group of Ministers cleared the draft of the NFSB this month and Food and Consumer Affairs Minister K V Thomas said that the Government would introduce it in Parliament during the winter session in December. The Government was earlier keen to introduce it during the monsoon session, which is set to commence on Monday.

The process, however, got delayed and the proposed legislation is now being vetted by the Ministry of Law and Justice. Thomas said that his Ministry would hold consultations with Chief Ministers of the States, before sending the Bill to the Union Cabinet for approval.

The Bill, as of now, seeks to legally entitle 75 per cent of rural households and 50 per cent of urban households to highly subsidised foodgrains. It seeks to guarantee seven kilograms of foodgrains per person per month to priority households and three kilograms of foodgrains per person per month to general households. For the priority households, the price of rice, wheat and coarse grains should not be more than Rs Three, Two and One per kg respectively. The Bill also says that the general households should get rice at derived minimum support price and wheat and coarse grains at rates that would not be more than 50 per cent of the minimum support price.

The Congress hopes that the proposed Food Security Act will do for it in the coming elections what the landmark Mahatma Gandhi National Rural Employment Guarantee Act had done in 2009.

No wonder, food security has been an issue very close to the heart of Congress president and UPA chairperson Sonia Gandhi since March 24, 2009, the day she released her party’s poll manifesto, which included the promise for legal entitlement to foodgrains.

The National Advisory Council (NAC) headed by her started working on the Food Security Bill, soon after it was reconstituted in March 2010. After intense deliberations and a public spat with a panel headed by chief of Prime Minister Manmohan Singh’s Economic Advisory Council C Rangarajan, the NAC – the UPA’s interface with civil society – on June 3 last came out with a draft NFSB and sent it to the Government.

There are however differences between the NAC’s draft and the one cleared by the EGoM. And the civil society activists in the NAC are not happy about it. For, they believe that the EGoM diluted the recommendations of the NAC, which wanted the proposed legislation to legally guarantee cheap foodgrain to 90 per cent of the rural households and 50 per cent of urban households.

The NAC also wanted the entitlement for general category households to be four kilograms of foodgrains per person per month. The EGoM accepted the NAC’s recommendation on categorisation of the priority households – 46 per cent of rural and 28 per cent of the urban population. But it either diluted or dropped Gandhi-led panel’s several other suggestions, including the ones on grievance redress mechanism and on the extent of powers of the National Food Security Commission and State Food Security Commissions to be set up to oversee implementation of the proposed Act.

Harsh Mander, convenor of the NAC’s working group on food security, said that the dilution by the EGoM had in fact negated the very purpose of the Food Security Bill. Though the NAC was yet to take a stand on the EGoM’s draft, Mander said that civil society activists would continue to protest moves to dilute the provisions of the Bill.

What apparently irked the NAC members and other civil society activists most was the provision for cash transfer inserted by the Government. The Bill says that the concerned State Government would have to pay the targeted households a Food Security Allowance in case it fails to supply the entitled quantities of foodgrains to them.

PDS revival?
A gradual shift to cash transfer has been in discussion for quite sometime, particularly as a prescription for the leaking Public Distribution System. The World Bank in a recent report titled “Social Protection in Changing India” argued in favour of keeping a provision of shifting to cash transfer in the NFSB.

Even Agriculture Minister Sharad Pawar is understood to be in favour of direct cash transfer to target groups instead of providing them with foodgrains. Pawar, who leads the Congress’ ally Nationalist Congress Party, wrote to Prime Minister Manmohan Singh, suggesting that a shift to cash transfer would help avoid the heavy burden on state agencies, which otherwise would have to be involved in procurement, storage, movement and distribution of foodgrains to implement the proposed Act.

Eminent economist Jean Dreze strongly argued against such a move. He too wrote a letter to the Prime Minister recently, urging him to block any immediate move to cash transfer. Citing a survey, he claimed that the Public Distribution System was witnessing an “impressive revival” across the country.

“The days when up to half of the PDS grain was diverted to the open market are gone. We urge you to ensure that the National Food Security Act includes the strongest possible safeguards against a hasty transition from food entitlements to cash transfers,” wrote Dreze, who was till recently a member of the NAC and played a key role in formulating its version of the NFSB.

As the debate on cash transfer goes on, the Ministry of Food and Consumer Affairs said that the proposed National Food Security Act would also be used to broader systemic reforms in the PDS.

The Government is also emphasising on augmenting the storage capacity and removing transport bottlenecks. Thomas said that additional storage capacity for 15 million tonnes of foodgrain and silos for two million tonnes would be added over the next three years. He also allayed concerns that implementation of the NFSB would raise food inflation.
Cost, tonnage to rise

Once Parliament passes the NFSB, the Government’s food subsidy bill is expected to rise to around Rs 94,987 crore, requiring an additional outgo of almost Rs 13,000 crore annually. The proposed food security net will cover about 68 per cent of the total population in the country. The Government will have to procure about 61 million tonnes of foodgrains in a year to cover the targeted beneficiaries. To sustain the programme, the country will require about 280 million tonnes of foodgrain by 2020-21 and agricultural production will have to grow by two per cent annually.

Pawar is believed to have pointed out in the EGoM’s meeting that the sustained implementation of the proposed Food Security Act would require an investment of about Rs 25,000 crore to boost agricultural production.

He flagged his concerns over erratic monsoon and its consequence on agricultural production and implementation of the proposed Food Security Act.

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