Economic Highlights
New
Delhi, 23 December 2011
Food Security Bill
GOVT’S LOGIC UPSIDE DOWN
By Shivaji Sarkar
Food security is a necessity, not for the poor alone but
to ensure that sovereignty is never compromised. Does it require a law to
ensure this? And, can a law enacted by Parliament ensure food to all or at
least the needy?
The country is not bereft of laws. There are laws to
ensure right to education, no child labour, employment through MNREGA, minimum
wages, no domestic violence and many more. In all these cases and others the
laws could never fulfil the stated objectives. Vast majority of children do not
have access to schools, child labour is a reality and MNREGA has not been able
to ensure the stated 100 days employment to the needy.
Evidently, the food Bill is an attempt to divert the
attention of the people from the crises that have engulfed the nation. It is not
just food. The rising price of medicines and health care is hitting hard not just
the poor but everyone. The ambit of price control has shrunk. Of the 74 bulk
drugs that were placed in the 1995 National List of Essential Medicines only 47
are produced now and only 34 are in the price control list.
It is doubtful that even if the Food Security Bill is
enacted as law, it would ensure food to 78 crore people i.e. 65 per cent of the
population, which is equivalent to the population of 1986. This is so only when
the granaries would have stocks, procurement targets are met and have an
effective public distribution system (PDS). A universalised PDS is required as
a market interventionist agency to maintain prices. But the new Bill would not
be able to create it. Only an administrative will is required and not a law.
There is the practical problem. As per today’s
population, the country would have to acquire 61 million tonnes of food grain
every year. It is no easy task. Some years ago procurement was State monopoly.
Now it has been opened up to private players, mostly large corporate, who can easily
play spoilsport. In many cases, they are doing it. Some aver that the recent
spurt in prices is due to cartelisation by such companies and a trade mafia.
Thus, they have created problems for the Government
in procuring food grains. If the Government agencies reach the market, they
together increase the prices – much above the minimum support price (MSP). And,
if the agencies such as Food Corporation of India do not procure, the farmers don’t
even get the MSP.
This is happening when the Government has no legal
binding. Once this becomes a legal entitlement, it would face severe market
conditions. Normal procurement at MSP would become difficult as the cartels
would ensure it. Hence, the Government would be left with two options: One, not
to procure and simply renege on its legal promise. Two, to fulfil its promise
and make political capital it would procure at a higher price from the cartel.
The second option would upset the Government’s
budgetary projections and make the cartels richer. No wonder the Rs 1.5 lakh
crore subsidies, including the States’ share would be pocketed by them. As in
the West, the Government would be pauperised and rich corporate cartels would
become richer. And this would be in the years of normal harvest. If food
production falls short of the target, the Government may have to shell out much
more.
The way the situation is developing, it seems that in
the coming years food production may fall. The arable land is shrinking as
fertile land is being diverted for SEZ, proposed manufacturing hubs, roads,
expressways and building projects or new townships.
In 1973, Late Prime Minister Indira Gandhi had
decided to nationalise wholesale trade in wheat during the peak of her Garibi Hatao days. It caused a sharp
rise in food prices. Then again, farm loan waiver by another Prime Minister VP
Singh in 1989 led to immense budgetary strain and paved the road to 1990
financial crisis, wherein India
had to pawn its gold to the Bank of England.
The present slowdown, high inflation and the collapse
of investment could be traced to the unwarranted fiscal expansion in 2008. That
was the original sin and food guarantee may be the last straw. Food grain
availability in the coming years might become critical as the population would
continue to increase and there would be more pressure on the PDS. Where then would
the Government get the promised supplies?
Additionally, it has a social cost. The MNREGA in
many areas has created shortage of labour. It does not add to assets or wealth,
but has created a breed of parasites. The new food Bill might spread this culture
far and wide.
Indeed, the Bill is a confession of the Government’s inability
to contain high food prices, which have increased by over 30 per cent during
the past three years. Affordable prices alone can ensure food for all. The
nation is sadly failing on this score. People do not have access to food
despite continuous production of over 230 million tonne food grain for the past
over three years. It is also strange that despite no shortage of food items, prices
remain uncontrolled--sugar has more than doubled and that of wheat, lentils,
vegetables have increased three times. If prices are made affordable, this Bill
would become redundant.
The touted low food inflation at 1.81 per cent is
based on the crash of potato and onion prices. Even this low rise is over the
highest prices in the same week last year. Prices of all other commodities and
particularly meat, eggs and milk have increased over 9 per cent. But
controlling prices by the ruling combine is an unwarranted proposition. It
might reduce the political parties’ kitties as donations would shrink.
Hence, if the Government is keen on ensuring food for
all, it doesn’t need a law to splatter it on its show window. It needs only to
show its fangs to the offender trading corporate and other organised mafia. It
has to bring down the prices. If it is keen on giving subsidies on the food
front, it should give it directly to the producer farmer. It cannot be a hypocrite
on cutting subsidies and then giving it to the powerful lobbies.
The Food Security Bill thus is by no standards a
solution as it does not have the mechanism to deliver. It may only pave the way
for pilfering Government funds in a “legalised official manner”. The Bill must
not be passed by Parliament. The rulers must be told to check prices and desist
from petty politicking. ---INFA
(Copyright,
India News and Feature Alliance)
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