India is in paradox situation, despite high economic growth, it has failed to improve the food security with rise in number of undernourished. More than 1/3 of the world’s poor are living in India; it is viewed as an emerging economy but is ranked below than many of the African countries in Global Hunger Index and Human Development Index. Majority of the population living below poverty line in the country do not have sufficient income generating opportunities to access nutritive food. It is unfortunate that a large number of poor till today, cannot access food despite of mountains of food stocks. There are projections that soon after the wheat harvest, the buffer stock would touch 90 million tons; against the buffer stock norms of about 30 million tons.
To provide long term sustainable food and nutritional security to the poor, the government plans to bring the National Food Security Bill (NFSB), a flagship program. The bill intends to provide subsidized food to the poor with access of food and absorption for better nutrition. The bill proposes to deliver 25 kg rice and wheat per family every month. The prices will be kept as low as Rs 3 per kg for rice and Rs 2 kg for wheat through targeted public distribution system. It also has a provision of supporting nutrition to pregnant women, lactating mothers and children.
There are three key challenge in implementing the proposed bill: (i) identification of the poor and ensure that the subsidized food reaches to the real needy, poor and undernourished; (ii) huge subsidy burden at the cost of investment for generating employment through infrastructure and developmental programs; and (iii) sustainability of the scheme in a scenario of changing food basket and climate change. The bill seeks to cover about 67.5 per cent of India's 1.2 billion people; 46 per cent will be the rural beneficiaries and 28 per cent urban beneficiaries. The moot question is how to identify the poor, pregnant women and lactating mothers in remote and backward areas for including in this mega program. With no set definition to select the beneficiaries, it is difficult to eliminate the non-poor from the list. Without proper targeting, there are possibilities of significant leakages. It is widely known, the existing procurement, stocking and distribution matrix is an unsolved puzzle. Today, the network of public distribution system suffers from large leakages in supply chain. Planning Commission rough estimates states about 45-55 per cent leakages, i.e. the food grains does not reach the BPL families and are lost in the chain of supply. Higher level of buffer stock, carry the risk of high wastage of food grains, and high maintenance. With additional procurement, for NFSB would put additional pressure on the existing infrastructure which is already inadequate to handle the current requirement of storage and preservation of quality. Failing to target right beneficiaries and improved delivery mechanism, the intended benefits will not reach to the poor and lead to failure of the key objective of the program. Today, the effort calls for developing more efficient, transparent and inclusive system that enables poor and vulnerable to access food at subsidized prices.
Second challenge is related with the growing food subsidy bill. The estimates show that India’s food subsidy bill has grown more than 20 times during the last two decades. It is now more than one per cent of annual gross domestic product (GDP) and five per cent of the agricultural GDP, and nearly one-third of all subsidies given by the central government. It is anticipated that the food subsidy will grow continuously with ever rising minimum support prices thus adding additional burden to the government. The issue here is to keep a check on subsidy reaching to the targeted and vulnerable society to improve their food and nutritional security.
The third challenge is the sustainability of the scheme. As per the provisions of the bill, nearly 61 million tons of food grains will be required. Given the current trend in the productivity levels with growing pressure on water and land and with rising climate change threat such as erratic monsoon, would it be possible to procure such huge quantity of food grains to make the program sustainable in medium- and long-term? Another related concern is how highly subsidized rice and wheat will distort the market and affect the farmers who are unable to market their produce to the government at minimum support prices. Investment in technology, research and infrastructure is the need of an hour. High yielding variety, stress tolerant seeds, irrigation, credit, extension services and markets that connect farmers for better produce and prices needs to be in making to achieve the goal of NFSB.
Food grain will always remain the central point of the food basket despite rising income, change in taste and preference and growing population. To understand medium- and long-term feasibility of the proposed bill, it would be best that NFSB is piloted in selected locations, to learn and understand its effectiveness and reach. Lessons learnt from MNREGA should be incorporated to bring in transparency and governance in the system. Also lessons may also be learnt from the successful global best practices in accessing food by the poor and vulnerable population. The role of Food Corporation of India needs to be reworked with more investment in storage and distribution capacity. A well architected program with better understanding of the processes will only improve the food and nutritional security of poor and vulnerable population.
*The article has been written in conjunction with Vaishali Dassani, IFPRI.
(Dr. P.K.Joshi is Director for South Asia, International Food Policy Research Institute. His areas of research include technology policy, market, and institutional economics. )