National Food Security Bill: Do we really need it ?

As the debate rages over the National Food Security Bill (NFSB), much is being written about the pros and cons of it on social media. The question of giving subsidy remains the moot question. At a time when the economy seems to be going through one of its worst phases, does the UPA doling out such an expensive scheme make any sense ?

Let’s go through the basic features of UPA-II’s most ambitious project. The Bill aims to provide 25 kg subsidized food grain per month to 75% of rural poor and 50% of urban poor. However, the poorest of the poor will get their 35 kg of food grain per household every month under the Antyodaya  Anna  Yojana (AAY). This scheme will target approximately 80 out of the 120 crore population in our country, and will require 60 million tonnes of foodgrain every year. While the proposed coverage and entitlement is likely to cost the Government about Rs 1,247,247 crores in 2013-14 while other implication will cost approximately Rs 23,800 crores per year.

The UPA-II is confident that this scheme will fetch them electoral results as General elections loom large next year. This of course comes under the garb of UPA  being committed to its pro poor image. Congress party managers have realized that if they are to do well in the 2014 elections, they have to focus on rural India.

Narendra Modi and his army are in the process of taking over the BJP dominantly. His talk of Gujarat as a development model along with overtones of aggressive Hindutva is slowly gaining ground. And Congress knows that it will not be able to stop the Modi wave in urban centres. Hence the National Food Security Bill becomes all the more important.

It’s a bit ironic when people complain about the Government spending so much money to feed our poor. They never seem to notice the heavy bill that Government foots to subsidize petrol, diesel, kerosene oil and cooking gas amongst the other things for ordinary citizens like any of us. The fuel subsidy figure for 2011-12 stood at R1,38,541 crore in FY12 and R1,61,029 crore in FY13.

While no one is against giving subsidized food grain to the poor, the question remains whether this is the only way to feed them. Did UPA-II have no other option or did it take the easy way out. Everyone in the system prefers temporary and convenient solutions rather than permanent ones. Because doing that is not just an uphill task, but will also expose the babu-politician nexus that has led to these loopholes getting way too big for any Government to fix.   

The first glaring issue that comes to mind is “do we really need to procure so much food grain”. And even if we do, where will we store it.  On an average, India wastes food grains and farm produce Rs. 54, 000 crores annually. If we go by the claims of Indian Oilseeds and Produce Export Promotion Council (IOPEPC), our country loses close to 21 million tonnes of wheat alone every year. This amount is as much as a continent like Australia produces. And the reason for this wastage is lack of storage and distribution facilities.

This is corroborated  by Tariq Anwar, Minister of State for Agriculture and Food Processing Industries. In his reply to a question in Lok Sabha, Anwar admitted that losses of agricultural produce are worth nearly Rs 50,000 crores every year.  This includes 30% of our total fruits and vegetables produce, which are lost due to lack of cold storage facilities. The same for food grains, 30% is lost through our Public Distribution System because of storage constraints. Anwar also added that as of July, 2012, India’s total storage capacity was around 70.5 million tonnes. But the Government procured food grains amounting to 80.5 million tonnes. The minister admitting to 10 million tonnes of food grain being wasted on record.

India’s premier warehousing agency, Food Corporation of India itself admits India lost 79 million tonnes, or nine percent of total wheat produced over a four-year period from 2009 to 2013. And that’s 13% of our Gross Domestic Product (GDP) being wasted due to limitations of our storage and supply chains.  According to a study by United Nations Environment Programme (UNEP) in 2009, India also loses 21 million tonnes of vegetables and 12 million tonnes of fruits every year. Reason, lack of cold storage facilities.

If we talk about storage facilities in India, our estimated infrastructure can hold upto 29.7 million tonnes in various cold storages across the country. But we have a cold storage requirement that’s twice the present number at 61.1 million tonnes. Realizing the need for urgent attention, a National Centre for Cold Chain Development has also been created to promote and develop cold chains for perishable items like fruits and vegetables. Private partnership is being encouraged through Private Entrepreneurs Guarantee (PEG) scheme.

If our Government focuses more on creating infrastructure for storage of the hard work of our farmers, we can aim to feed millions without actually putting so much pressure on the Government exchequer. The 21 million tonnes of food grains that are wasted every year can feed one-third of the people proposed to be covered under the National Food Security Bill (NFSB). 

A report on India’s Public Distribution System (PDS) claimed that in 2005, 58% of the food grains from Central stock did not reach the end consumer. Mainly due to non transparency and unethical practices that gives the PDS a bad name. That explains Union Food Minister's helplessness at the PDS way back in 2009, when he said he was not happy with the way this system is being handled. If we can spend just a fraction of the money proposed under the Bill on plugging the loopholes in our PDS. It will ensure that we can feed another one-third of the remaining population under the scheme.  We all know it’s easier said than done, but someone has to bell the cat.  This will go a long way in exposing the corrupt in our system. Bring in people from various walks of life like the Government did with UID and revamp the system.

That would leave the last one-third of the people left, bringing down the budget of this scheme to somewhere near Rs. 4,15,000 crores. Also the required procurement of food grains will go down to approximately 20 million tonnes. The Government is making efforts to curb misuse of PDS. Digitization of  this scheme is to be done in 12^th Five year plan 2012-17. States and UT’s like Tamil Nadu,  Andhra Pradesh, Karnataka, Kerala, Puducherry, Chandigarh and Delhi have already completed this work while rest are working towards it.

What we also need to do is to create simple yet effective methods to ensure we make the most of our produce that just goes waste. We need to educate our farmers and encourage the well off ones. The leaders of our agrarian society need to take charge and help build storage facilities with the help of state governments. The Non Renewable Energy ministry can be roped in to provide subsidy and practical schemes to help our villages use solar power for longevity of their produce.  Local entrepreneurs need to be given that confidence and help to create small manufacturing units. Where the local farmer can sell his produce, and the local businessmen can create packed products like powder, paste, oils, perfumers and cosmetics etc. which gives a longer shelf life to the same goods.

Industry needs to be encouraged to be a part of this storage revolution. It has to be an all inclusive package pushed by the Government, where all resources are harnessed in the best manner possible. Farmer gets good rates and full payment of his agricultural produce. Local entrepreneurs can value add to it by creating goods and products for middle/urban class and make a name for themselves in cities.  The big industry names need to tap these local brands and create their national chain across the country. Industry needs to be convinced that the only way forward is when they walk hand in hand with our farming community. 

I recall Hitler’s famous lines. “Give the people what they need and not what they want”. The people need food in their bellies, but it should be done in a sustainable manner. The proposed NFSB may be a noble thought by UPA-II. But it’s just adding to the many problems being faced by our economy like inflation, taxes and lack of political will to bring a balance between industry and agriculture. Unfortunately, the current dispensation riddled with corruption and credibility issues, seems to think that giving in to the wants of an election year will fulfill the needs of our country’s poor.