Friday, March 29, 2024
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Govt’s logic upside down

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Food Security Bill
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

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