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Food Security Bill: The many ways of feeding Indians

The nub of the debate in such matters, whether MGNREGA or Food security, is the time period over which it is being provided. In other words, the policy prescription is different depending on whether one is looking alleviate short-term social distress as against building a long-term economic model.

Udit Misra
Published: 12, Jul 2013

I have been with Forbes India since late 2008 and currently work as Assistant Editor. In the past , I have reported for Mint newspaper and produced special shows for CNN-IBN news. In my spare time i follow sports, esp cricket, and enjoy reading/listening urdu poetry. You can reach me at udit.misra@network18online.com and follow me on twitter @misraudit

For a while now, readers have been peppered with diametrically opposite views on the Food Security Bill. I am attempting to explain why both sides appear so convincing when you read them.
Nobel Laureate Amartya Sen (Photo: Amit Verma)
Nobel Laureate Amartya Sen (Photo: Amit Verma)

On the `for' side are Nobel Prize winning economist Amartya Sen and his close collaborator, and an outstanding economist in his own right, Jean Dreze. They have not only been pushing for greater efforts to arrest hunger and malnutrition in the country but also pointing out how such efforts are both affordable for the government, and in fact, beneficial for the long term sustainability of the Indian economy.

At first look, they make a lot of sense. India's rapid growth hasn't had as much impact on reducing poverty and hunger as one would like. Our social development continues to lag behind even the sub-saharan countries. Dreze and Sen have just come out with their new book, "An Uncertain Glory" that details India's failure in this regard. It is reasonable to expect India cannot grow to be the superpower of the 21st century with a hungry and malnourished population.

Jean Dreze (Photo: Madhu Kapparaath for Forbes India)
Jean Dreze (Photo: Madhu Kapparaath for Forbes India)

 

Then one reads the views of economists and opinion makers who ridicule such subsidies. A summary of this view was carried by the Financial Express in a recent editorial. In short, these people question both the ideological desirability and the financial viability of such schemes - as in schemes like MGNREGA (which assures minimum employment for rural households) and Food security (which assures minimum food for the disadvantaged).

The argument is that such schemes actually make India unproductive since people, who otherwise have a big reason to improve their skill sets and participate in the market to earn a living, just lounge around and pocket the dole. One industry voice says that such schemes are making India "unambitious".

They also argue against the prohibitive costs of such measure. Surjit Bhalla's curiously titled column, No Proof Required, in Indian Express asserts how the proposed Food Security Bill will cost 3% of India's GDP. The basis of this argument is the inefficient manner in which India has historically run food related schemes like PDS (Public Distribution System). Although in part the 'prohibitive costs' argument is also based on a tacit acceptance that we have so many under-privileged people in India that any welfare scheme might appear prohibitive!

Anyways, that's material for another blog.

On the face of it, most people who are not already toeing an ideology, would find compelling reason in both the arguments.

While India grows at 9% and as a direct result more people become rich, the government is almost morally bound to also ensure that fewer people remain poor. That is to say, the inequality in the society comes down. That has to be one of the key mandates for any welfare state - if not the first one!

Yet, it is reasonable to ask why should we use a supposedly creaky instrument like PDS for such welfare schemes. Why cant we try some other method of removing poverty and hunger. For example, as Manish Sabharwal of TeamLease so peruasivley argues: imagine spending all the money that we have spent on MGNREGA till now (roughly Rs 1.5 lakh cr) on a scheme which incentivises people to develop skills and get a job. This will allow them to fish themselves instead of waiting for government's dole while the economy suffocates with a lack of skilled labour.

The nub of the debate in such matters, whether MGNREGA or Food security, is the time period over which it is being provided. In other words, the policy prescription is different depending on whether one is looking to alleviate short term social distress or building a long-term economic model.

So both sides would agree that there are needy people in this country who,in the SHORT TERM, need help - either through some job security or food security- just to tide over a phase before they can participate in the market.

There is also agreement that we cannot continue giving money or resources in perpetuity. So if you ask Dreze, he'd say that MGNREGA could be called a success if demand for it comes down. That is to say that India' economy picks up so well that nobody in the rural areas would even want to have a MGNREGA job - either because it is too arduous or because it pays too low.

The whole debate, as it plays out in the media, happens at two different levels - and that explains why people from both sides appear reasonable!

Those justifying MGNREGA and Food Security are thinking of government's responsibility to alleviate people's short term distress. This side also expects govt to run programs more efficiently and not give up on programs just because they have not been run efficiently in the past.

Those criticizing are thinking of the negative impacts these measures have when they are run in perpetuity. This lot doesn't say much of what the government should do - they mostly stress on what government has failed to do in the past.

"Further, there is also a built-in tension between markets and democracy. Markets don’t work on a one-person-one-vote principle, as democracies do. What one can get out of the marketplace depends on one’s endowments, skills, purchasing power and the forces of demand and supply. Markets reward individual initiative and skill, and may also lift many from the bottom rungs of society, but some people never get the opportunity to develop skills that markets demand: they are simply too poor, too handicapped, too sick. Or, skill formation takes too long, while life, if poor, to paraphrase Thomas Hobbes, remains nasty and brutish in the short to medium run"
The fact is that we need both. We can't say that just MGNREGA and Food Security Bill will tide us over forever. Nor can we leave the distressed and hungry lot at the merciless altar of 'market forces' - hoping that the hungry will acquire skills on an empty stomach!So it is not so much about ideology as it is about choosing the right policy for the right time frame.Look forward to hearing from you.
  • Prof (Dr.) Ramakumar,V.

    FOOD COLLECTION AND PUBLIC DISTRIBUTION SYSTEM (PDS) Though agriculture is a state subject, central government has practically involved itself “whole hog”, in the collection and distribution of food (grain ONLY) As part of food security it has organised a chain of ration (PDS) shops which mainly distributes kerosene, rice/ wheat. It is now known through many empirical studies in 1986-87 based on NSS (national sample survey) data, that PDS purchases were not benefiting the poor. Pattern of the PDS’s distribution too does not seem to be related to level of poverty. Leakage, losses and diversion to free market are alleged and delivery in rural areas seem to be very poor (Venugopal, 1992*).  There is heavy incidental of FCI in spite of subsidised credit and freight preference from railways. Various studies show that 13 paise to 22 paise out of every rupee spent reaches the poor. Restructuring of PDS in 1990’s too did not provide any dramatic betterment. This calls for a close study (research) (Parikh, Kirit.S.: India Development report, 1997; Oxford Univ. Press). We have seen that (approx. 40.4 % of the production cost) shall have to be borne by end users or govt. and that Rs 2,07,000 crore is alleged to be siphoned off by middlemen. DIERECT TRANSFER OF MONEY: Direct Cash Transfer (DCT) An Economic Survey 2007-08 (Kapur et al, 2008), shows that about 27.5 percent of India’s roughly 1.13 billion people are below the poverty line (BPL), i.e., about 310 million people or 70 million households. If the Rs.1,80,000 crore spent on centrally sponsored schemes and food, fertilizer and fuel subsidies were distributed equally to all these 70 million households, it would mean a monthly transfer of over Rs.2,140 per household. If the government may give the amount @ Rs.500/ month to each household it would only be 40% food budget for BPL. Conditional Cash Transfer (CCT) Some 30 countries are experimenting with some form CCTs. ‘Progresa’ (later renamed as Oportunidades) introduced in Mexico in 1997. Brazil introduced ‘Bolsa Escola’ in 1995 and ‘Bolsa Familia’ in 2003. Countries like Honduras, Nicaragua, Ecuador, Dominican Republic, Panama, Peru and Jamaica have their own programs. Bangladesh and Philippines too have recently introduced CCT programs. A CCT known as ‘Opportunity NYC’, funded by the Rockefeller Foundation was launched in New York City in April 2007, shows that such programs exist in developed nations too. In most countries, money is directly handed to the poor families after a “social contract” that the beneficiary should send the children to school or bring them to health centres regularly. The cash is paid to the female family member. The exchequer is not heavy compared to the benefits accrued to the society. Food Stamp A food stamp or food coupon is direct income support to purchase of foodstuff from market is an alternative to putting grains in the PDS shops and can elimination of the black market and would eliminate new FPS and accept general stores. The shopkeeper collects the specially designed stamps on "secure paper" of a certain value. Recipients are free to decide what they want with the money. It can take the form of a coupon that would permit purchase of a short list of specified items at discounted prices with quantities also stipulated. (WE may think of credit card type device with specific options). Food stamp scheme was introduced in Andhra Pradesh in 2004. NOTE: freebees have their disadvantage; they curb people’s survival skill, discourage one’s motive to work and often pave way for drugs and anti-social activities in the absence of engagement. Substantial political, social and financial support (including R&D) for local (or at least regional) Production of food and energy of animal origin and staple food production appears to be the only way to achieve viable Food & nutrition security in an equitable manner. Next: POSSIBLE REMEDIES: PRIORITIZE ANIMAL RESOURCE DEVELOPMENT, local food/ staple food production, mixed farming, organic food production, BIODIVERSITY

    on Aug 18, 2013
  • Prof (Dr.) Ramakumar,V.

    An Economic Survey 2007-08 (Kapur et al, 2008), shows that about 27.5 percent of India’s roughly 1.13 billion people are below the poverty line (BPL), i.e., about 310 million people or 70 million households. If the Rs.1,80,000 crore spent on centrally sponsored schemes and food, fertilizer and fuel subsidies were distributed equally to all these 70 million households, it would mean a monthly transfer of over Rs.2,140 per household. If the government may give the amount @ Rs.500/ month to each household it would only be 40% food budget for BPL. In grain production, most favorable factors of the past growth can no more be tapped  Intensive agriculture increased quantity, but quality of crops suffered with grains becoming deficient in mineral nutrients over the years.  Soil residues affect the health and fertility of livestock affecting small holders’ daily earning.  Over the years mineral loss (micro-nutrient) is one of the reasons of shift in human life from high mortality-high fertility to low mortality-low fertility.  GDP share of Agriculture declined from 50% in 1950/51 to 27.6% in 1996/97 (25.94% as derived from National Account Statistics, 1996)  Despite subsidies and support price cost of food grains (251 M Tons of food) increased beyond buying power of 35% who are below poverty line (BPL).  During Durban summit in South Africa (2011) a report revealed that US, India & China together, produce more than half the Green House gases (GHG).  Nearly 42% (or 47%?) of our children remain under-nourished; the focus must shift from hunger to malnutrition (ie. from belly filling to good food).  Empowering the masses specially the poorest who rears live-stock on common property and crop residue is significant for both food and nutritional security (pl. see the table on plan outlay again)  Staple food crops of a locality typically adapt the growth conditions of the local areas ie. tolerant to drought, pests or soil nutrients. Local plants, (like local grass, local mango, jack fruit, vegetables, grains etc.) ensure a micro-recycling among the plant, animals and man in that locality.  The focus of food security plan has to be through regional strategies for high productive zone, low productivity-high potential zone, low productivity zone and ecologically fragile zone NOTE: freebees have their disadvantages; they curb people’s survival skill, discourage one’s motive to work and often pave way for drugs and anti-social activities in the absence of engagement. Substantial political, social and financial support (including R&D) for local (or at least regional) Production of food and energy of animal origin and staple food production appears to be the only way to achieve viable Food & nutrition security in an equitable manner. POSSIBLE REMEDIES: PRIORITIZE ANIMAL RESOURCE DEVELOPMENT, local food/ staple food production, mixed farming, organic food production, BIODIVERSITY

    on Aug 2, 2013
  • Alen Agaronov

    India may wish to take a look at the U.S. Farm Bill before moving ahead with the current National Food Security Bill.

    on Jul 26, 2013
    • Prof (Dr.) Ramakumar,V.

      India would also look at the impact of mono culture on environment ) It is alleged that six times or more grain is required for factory farming to produce 1lb. meat. Stall feeding of animals (in thousands) in one place and feeding them on food grains can produce Green house Gases as large volumes of methane are released from their belching. Use of growth hormones and antibiotics in large quantity to maximize production (not optimize) is a point raised against factory farming of animals. (E) It is also alleged that Americans throw away as much as 30 percent of their food, approximately worth $ 48.3 billion, each year. The wastage of food is not uncommon in India, especially during social functions and in food outlets (mismanagement). (F) US, India & China are the biggest emitters, accounting for half of all the global CO2 emission.

      on Aug 2, 2013
  • Alen Agaronov

    Given India's (and China's) recent incidences regarding food safety, I'm hoping that India takes equal measures to ensure that food safety is added into their equation for food security. The surplus of food, if not regulated to ensure safery, can have negative consequences, especially for the very low income population.

    on Jul 25, 2013
  • Emani Venkatesh

    A nice and balanced article putting both sides of the debate in the proper perspective, without exihibiting the hysterics of the urban, middle-class and well-to-do constituency, nor proffering the apologetic defense of the well-meaning and conscientious bleeding-hearts. Looking forward to more of the same. God bless you.

    on Jul 15, 2013
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