PRAGMATISTS

INTELLIGENTIA ON PROPOSED FOOD SECURTIY BILL

Gurcharan Das: Food Security bill would be corruption by other name UNICEF: Priority should be addressing malnutrition of children and women, not feeding people Bhartiya Kisan Sangh: Bill will make government the main buyer, reducing our options Food Minister: Purpose of bill is to correct delivery mechanism

Amartya Sen: Food security bill will ensure proper nutrition and human welfare for the country to go forward

KEY CHALLENGES
Challenge 1: The Nutritional Aspect By solely subsidizing wheat and rice, the draft bill is doesnt address the issue of malnutrition. India remains an importer of pulses and oilseeds in absence of input subsidies to reduce pulses production cost. Challenge 2: Black Market By excluding 33% of population from the bill, a differential pricing is introduced in the system which results in unfair practices like the hoarding, and consequentially a black market, fuelled by government subsidy

Challenge 3: Licensing With the current system, the private contractors are awarded licenses to provide food under the food security bill, through a less transparent process breeding corruption.

Challenge 1: The Nutritional Aspect

Per capita availability of pulses in India is low. Per capita production of pulses has decreased from 60 g/day in 1971 to 36 g/day by 2008 Implication : The government cant afford to include pulses in food security bill, for it will increase burden on imports that are entirely subsidized by the government. The main component of Indian cuisine is Dal-Roti or Dal-Rice. If food security bill becomes a law, the real income of farmers increases, and they begin demanding dal component of the diet to make it more nutritional. Since there is no incentive for farmers to produce bill in India, the additional pulses demand pushes more imports of pulses, which results in vicious cycle of increase of fiscal deficit.

Challenge 2: Black Marketing

Differential pricing is the main reason for black marketing.
Since the same products are priced differently across various markets, people exploit the arbitrage opportunities by black marketing.

Challenge 3: Licensing
Total value of corruption in existing PDS is 358 crore per year. (As per a 2005, Transparency International and Centre for Media Studies report) The License Raj in awarding contracts the licenses acquired through corrupt means leads to malpractices in distribution of food grains

The Proposal
Define poverty based on nutritional intake. Provide food security on complete food requirement rather than being cereal based.
We observe providing input subsidies are more effective than providing the minimum support price. The MSP distorts the market dynamics more towards the cereals. This creates huge deficit in pulses, oil seeds etc. A more transparent and effective system is required to solve this problem.

The Proposal
Provide food stamps or cash transfer to remove the differential pricing (Addresses Challenge # 2)

This would remove licensing system in the PDS system to prevent corruption. The food stamps would eliminate the existing parallel markets and the food products can be distributed directly through the open market. Repeal APMC (Addresses Challenge # 3)
Create the necessary marketing infrastructure for efficient distribution systems for the farmers.

The Proposal(..contd)
Link the disbursement of food stamps to aadhar using biometric validation.
Computerize the accounts management systems and all the transactions. Display the amount of food grains distributed every month in local panchayats. Create the customer complaint redress system to prevent leaving out of valid beneficiaries.

MECHANISM
When APMC is repealed and the concept of MSP is removed, the price of wheat and rice falls down (because its cost has artificially been kept high)

Over time, this will smoothen out by the action of market forces.
On the other hand, farmers, through input subsidies made available by the government, move to growing pulses This addresses challenge # 1

Addressing the remaining food requirements

Linking MNREGA with food security bill and provide food for work. Extension of benefits to Children: Taking care of nutritional requirements from childs birth to the age of 9 years, effective implementation of mid day meals. Extension of benefits to women: Provide nutritional input to pregnant and lactating women.

Thank You