Built up painstakingly over the last three decades is an incredible structure for the maintenance of national food security. It rests on three pillars: a reasonable price paid to farmers so that production levels of cereals are kept up; the Food Corporation of India (FCI) system for large scale, efficient procurement, storage and transportation and a public distribution system (PDS) for transfer of subsidised grain to the poor. Operating on two presumptions, both wrong, the High Level Committee on Long Term Grain Policy has made recommendations which appear in favour of the poor in the short term but which are against them in the long run. The first presumption is that surplus stocks in the FCI godowns are an indicator of excess procurement. The second is that the food subsidy standing at 1 per cent of GDP must be reduced to 0.2 per cent. Accordingly, it recommends that procurement be discouraged by cutting minimum support price (MSP) to farmers thereby reducing procurement by 12 million tonnes. Then it suggests that there be a uniform PDS price virtually at acquisition cost, thus allowing BPL prices to shoot upwards. The poor, indeed, have reason to be alarmed. Procurement every year is 40 million tonnes (MT). Offtake (excluding food for work) is 30 MT. Assuming that the food for work (FFW) programme will remain at its present low levels, the Committee concludes that procurement must be reduced. This is a fatal error. The food for work programmes during British rule were governed by Famine Codes. These provided an extensive code of conduct for officials to recognise the onset of famines, the immediate starting of FFW programmes available to all irrespective of income, and the payment of subsistence amounts to those who cannot work. Studies show that the British were able to control deaths by starvation by the effective implementation of these Codes. Governments today, in contrast, appear to be worse than the British. Over time, these Codes came to be disregarded. As is usual in every Red Fort address to the nation, prime ministers announce schemes. The Employment Assurance Scheme (EAY) promised 100 days of FFW in a year to all. Prime Minister Vajpayee then announced a new Sampoorna Gramin Rozgar Yojana (SGRY). Everyone assumed it was an improvement on EAY. With the facts came the shock. It would provide an average of 10 days’ employment! Rs 5,000 crore and 5 MT grain was all government could spare. Chandrababu Naidu demonstrated that 5 MT was a pitiable amount for the country when he managed to grab 3 MT for Andhra Pradesh alone. Extrapolating from this, a genuine FFW implemented nation-wide can easily absorb a minimum of 20 MT more. The piling up of stocks is therefore not because procurement is too high but because there is a deliberate decision not to feed the poor. Once the decision is taken for an effective FFW programme, the gap between procurement and disbursement will disappear. As the grain component of SGRY rises from 5 MT to, say, 20 MT, so too will the cash component. But this can be kept in check by enforcing the labour/capital ratio on public works to 70/30 and by paying almost the entire wage in grain. Additional funds could be raised by the states through the imposition of a levy as Maharashtra has done in the case of the Employment Guarantee Act. All it needs is the will to act. The PDS was sabotaged in five ways. By targeting through increasing the APL (above poverty line) and BPL (below poverty line) prices to such an extent that APL offtake collapsed and BPL offtake declined; by relaxing Fair Average Quality Norms so that people were disgusted with the grain they received; by rendering uneconomical the running of ration shops save by blackmarketeering in grain and, finally, when the APL prices were marginally reduced, by not communicating this to the public. According to M.S. Swaminathan, when targeting was introduced in India in 1997 the experiences of Mexico, Zambia, Jamaica, Tunisia and Sri Lanka were well known. The targeted food stamps in Mexico were aimed at cutting the food subsidy and led to an 80 per cent decline of those receiving subsidised food. Sri Lanka’s effective universal PDS was converted to one based on income in order to pander to the IMF direction to cut food subsidies. There was a 50 per cent fall in participating households and a significant number of low income groups were excluded from the food stamps programme. The heart of the matter is money. India’s food subsidy of 1 per cent of GDP is not high by international standards. Moreover, 66 per cent of this is worthless as it is storage cost. The hidden agenda of the committee is to reduce this food subsidy to 0.2 per cent. To disguise this with an offer of price index-linked coupons for the poor and cash transfers to the state in lieu of price subsidies is laughable. State governments that cannot pay the salary of their employees will put this cash into the general account. Coupons have failed worldwide. In India, counterfeiting will be a problem. With the largest population of malnourished people in the world, the ‘business as usual’ approach won’t do. India must dedicate a part of its GDP towards subsidising food for the poor. The subsidy must go up, not down. In recommending that BPL and APL prices be increased close to acquisition cost (which is higher than the APL level) the Committee goes over the top. It must understand that the current BPL/APL rates are too high for the poor to purchase grain. The BPL rate ought to be fixed at the Antyodaya rate level, and the APL rate brought down to the BPL level for there to be any significant increase in offtake. Starvation is caused by high PDS prices. A pro-poor policy would entail a reasonable minimum support price, additional procurement and distribution of grain at low prices. Such a policy would be essential to maintain self-sufficiency. The devious policies of rich countries and the volatile nature of international cereal prices makes the import of cereals a dangerous policy. Surplus production of a few advanced countries accounts for 4/5th of the global trade in cereals. The US farm subsidy is expected to be about 50 billion dollars a year. Once the US grain exporters get a monopoly in India on the basis of highly subsidised grain exports, prices will be pushed up leading to a grave crisis.The writer is an advocate practicing in the Supreme Court. He is arguing the right to food PIL filed by the PUCL in the Supreme Court
