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The Food Security Bill Boosting Cartelisation

Updated: January 7, 2012 3:32 pm

Food security is a necessity not only for the poor people but also to ensure that sovereignty is never compromised. Does it require a law to ensure that? 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, stop child labour, employment through MNREGA. In all these cases and many more 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 100 days employment to the needy.

The food bill is an attempt to divert the attention of the people from the crises that have engulfed this country. It is just not food. The rising prices of medicines and health care are hitting not only the poor but everybody badly. The ambit of price control has shrunk. Of the 74 bulk drugs that were placed in the 1995 National List of Essential Medicines (NLEM) only 47 are produced now and only 34 are on the price control list.

The Food Security Bill, even if enacted as law, it is doubtful could ensure food—cereals—to 78 crore people—65 per cent of the population. This is so when the granaries would have stocks, procurement targets are met and have an effective Public Distribution System (PDS).

Is that possible? The country had been having excess food stocks. A large percentage of it has also been rotting. In the post-1996 scenario, the PDS is either restricted to the below poverty level beneficiaries or has become dysfunctional in many states. The new bill would have to take recourse to the PDS once again to make available the food grains.

The Centre can make a political capital as PDS is managed by the states and they could be blamed for malfunctioning of the system. In some cases, where the states have developed an effective system the political gains would be pocketed by the regime there. This too could lead to a rift. Since the food grains would be distributed by the Centre, it could delay the supplies and create problems for the state governments.

That would be a game of a political football.

This apart there is a practical problem. As per today’s population, the country would have to acquire 61 million tonnes of food grains every year. It is no more an easy task. Some years back procurement was state monopoly. Now it has been opened up to private players—mostly large corporates. They can play the spoilsport. In many cases, they are doing so. Some aver that recent spurt in prices is due to cartelisation by such companies and a trade mafia.

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). If the agencies like Food Corporation of India do not procure, the farmers even do not get the MSP.

This is so when the government does not have a legal commitment to anyone. Once this becomes a legal entitlement, it might face severe market conditions. Normal procurement at MSP would become difficult—that would be ensured by the cartels. The government would be left with two options. The first would be not to procure and renege on its legal promise. The second seems more plausible—to fulfil its promise and make a political capital, it would procure at a higher price from the cartel.

This 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.

This would be in years of normal harvest. If food production falls short of 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 SEZs, proposed manufacturing hubs, roads, expressways and building projects or new townships.

Since neither the Food Bill nor the Land Acquisition Act has provisions for land bank, it is apprehended that the cheapest land belonging to farmers would be lost for purposes other than agriculture. 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 would the government get the promised supplies?

The Planning Commission’s estimate of almost 65 per cent people in the below poverty level (BPL) category—78 crore—is equal to the population of the country in 1986. Could any government ensure that kind of a massive support to the population?

It has also a social cost. The MNREGA in many areas has created shortage of labour. It does not add to assets or wealth. All the same it has created a breed of parasites. The new food bill might spread that culture far and wide.

It is a common knowledge that food security cannot be assured through such politically-motivated legislations.

The bill is a confession of inability to contain high food prices, which has increased by over 30 per cent during the last three years. Affordable prices alone can ensure food for all. The nation is failing on this score.

It is an admission that people do not have access to food despite continuous production of over 230 million tonne food grain for the last over three years. It is also strange that despite no shortage of food items, even onion, prices remain uncontrolled. If prices are made affordable, this bill would become redundant.

It has come at a time when another crash of confidence looks at the nation in the crash of the rupee that has touched the low of Rs 54 to a dollar.

The bill that takes the high moral ground of providing food to the “deprived” is a pointer to governance deficit and lack of vision. It is evident in its approach for cereal-based food security as it was at the initiation of the Green Revolution in 1970s. The country has remained morphed for all these years. The progress seems euphemism.

The food is a necessity for all. Even the slightly better off are finding it difficult to have it. Home budgets are crashing all over the country as food of all sorts is going beyond the reach of the average Indian, who may not be classified as below the poverty line but most of them, even many from the middle class, would be just on its edge.

High food prices and illogical tax rates are impoverishing many Indians. It has caused a spurt in the cost of maintaining the minimum living standards. Their failure to afford most of the necessary goods has led to a crash of industrial production. Growth is turning negative.

Despite repeated cries of inability to contain the prices by the finance minister because he does not have a magic wand, even the minimum administrative and legal steps (under Essential Commodities Act) were not taken to check the rising prices of food items—food grain, pulses, sugar, vegetables, onions, milk or fruits. Price of sugar has more than doubled and the prices of wheat, dal, vegetables have increased three times.

The bill overlooks the fact the country does not have the capacity to pay Rs 90,000 crore each year to pay for a dream that would not become a reality. In fact, if the states’ share is included the figure reaches Rs 1.5 lakh crore a year.Yes, the food bill for the “deprived” is a cash cow of the future for the corporate. This is how many of these corporate have pocketed huge farm subsidies in the US and Europe while their governments were pauperised.

Economic advisors of the government say high inflation points towards people eating healthier food and better lifestyles. They cite this as the main reason for increase in the prices of vegetable, eggs, fish and dairy items. “High prices are the worst form of taxation on the poorest of the poor”, says Ashok Gulati, Asia Director of the International Food Policy Research Institute.

Corruption is not limited to Anna Hazare’s list. It has subtly been spread to make many of these legalised. The dilution of the Land Acquisition Act to deprive the farmer of his rights is a blatant example how the government works under the pressures of the corporate. The corporate have their lobbyists in the government in bureaucrats. The decisions are not being taken by political wizards but bureaucrats have become the policy makers with an eye on post-retirement political career.

As farm lands shrink it would not be long when food grain production, which is stagnating, would start falling. To fulfil a legalised entitlement, the governments would have to increase subsidy payments benefiting suppliers, who in the days to come would be from the corporate world.

The bill signifies that India’s leadership is stuck in indecision and ideological confusion. Economic survey of 2009-10 notes that consumption by the bottom 50 per cent of the population is declining. There is no attempt to address these. Many children cannot go to school because their parents do not have jobs. They cannot consume so malnutrition is on the rise. Most of these problems have links with high unaffordable prices.

But controlling prices by the ruling combine is an unwarranted proposition. It might reduce their party kitties as donations would shrink.

If the government is so keen on ensuring food for all, it does not need a law to splatter it on its show window. It needs 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 food front, it should give it directly to producer farmer. It cannot be hippocratic on cutting subsidies and then giving it to the powerful lobbies.

Of late, health, education and employment has become rights. But the functioning of the government has led to denials. The state is failing on health, education and employment. It had its consequences. More it failed the more was a clamour to “privatise”.

The solution to every problem was privatisation. If the state cannot provide security, have your own security guard; if it does not generate power, have your captive power plant, if government hospitals do not work, go to a private expensive unaffordable one; if state schools do not work, go to expensive private schools.

The Food Security Bill aims at putting a coloured glass on all to divert the attention from these failures. It is not a solution as it does not have the mechanism to deliver. It may pave the way for pilfering government funds in a “legalised official manner”.

The bill must not be passed by Parliament as it would never ensure any food security. The rulers must be told to check prices and desist from petty politicking.

By Shivaji Sarkar


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