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Posts Tagged ‘National Food Security Bill

A hasty and stunted legislation for food security in India

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The United Progressive Alliance in India, the ruling political coalition at whose centre is the Congress party, has called it “a historic initiative for ensuring food and nutritional security to the people”. By this is meant The National Food Security Bill, which was passed by the Lok Sabha on 26 August 2013.

In recent weeks, criticisms of the provisions of the bill and suggestions for its amendment gathered quickly, from political parties, from state governments, from civil society and NGOs and academics, and from citizens who have followed the twists and turns of the draft legislation since 2010. How many of these have been incorporated into the bill as passed by the Lok Sabha is still unclear, but a government press release stated that ten amendments were approved. I don’t know which ten but these would be small in number compared with the scores of amendments, corrections, modifications and re-draftings suggested by groups and coalitions that have long worked for food security in India and its states.

Sifting through news reports for relevant information, I find that:

(1) The government has said that the word ‘meal’ as used in the approved bill means hot cooked or pre-cooked and heated food and not the packaged food, which was a definition that provoked many when it was spotted in the draft. This is an important amendment as it has an impact on the enormous mid-day meals (for schoolchildren in government schools) and the integrated child development services (ICDS) programmes, which reach tens of millions. The fear was that packaged food would supplant, to the detriment of the children, hot and fresh cooked meals.

(2) As far as I can make out, another approved amendment gives states a year to implement the bill instead of six months. Earlier, under the ordinance (whose passage was roundly condemned), the central government was to determine the number of eligible beneficiaries in each state. Not only was this centrist in nature, it required the process by which beneficiary households were to be identified to be completed within 180 days, even though the guidelines for such identification are yet to be issued by the central government. Moreover, there has been no consultation with the states on this aspect.

(3) There is some reference made to the states determining their approach and measures towards implementing the bill, which will be (or may be) governed by “rules” that are to be drawn up in consultation with the state governments. This is important for, in the text of the Food Security Ordinance the central government reserved the right to introduce cash schemes instead of food in the Rules of the proposed legislation. This had signalled quite clearly its longer-term agenda of dismantling the system of procurement of grain from farmers at notified minimum support prices.

The reportage of the passing of the bill has touched upon a variety of issues and concerns, and here is a selection:

Lok Sabha passes Food Security Bill
Sonia Gandhi’s ambitious food bill gets Lok Sabha nod; UPA gets its ‘game-changer’
The Food Security Bill will cost a lot more than projected
Food security bill: Is it right or fight to food?
Long due, Food Security Bill meets mixed reaction
Food Bill will not raise fiscal deficit: Chidambaram
‘Not against Food Security Bill, but want certain changes’: BJP
Food Security a ‘historic opportunity’ or mere ‘vote security’?
Food security Bill gets Lok Sabha nod as Sonia lauds ’empowerment revolution’

The government has said that the Bill will cover 75% of the rural population and 50% percent of the urban population in all states, coming to an average of 67% for the total national population. This however will use (we await a full reading of the approved amendments that will clarify this matter) the methodology of the Planning Commission for poverty estimates which is to provide the basis for dividing the population between below and above the poverty line. This is the same methodology and ratios that have been soundly discredited.

The point that has been made forcefully by the Communist Party of India Marxist (CPIM) is that these caps on population compromise utterly the right of state governments to decide criteria as contained in the bill. The caps are set by Planning Commission methods, not by state governments themselves. That is why the guidelines that are to be drafted – via consultation, the central government has said – by the state governments must ensure the maximum inclusion, and not the limited inclusion decided by the Planning Commission.

Moreover, the All India Kisan Sabha at its 33rd All India Conference (24-27 July 2013 in Cuddalore, Tamil Nadu) had in a resolution of food security described the policy canvas against which this food security bill has now been passed:

“India has become more food-insecure over the last decade in terms of all three dimensions of food security: availability, access and absorption. Availability has been undermined by policies reducing productivity growth and making grain cultivation unremunerative. Access has been weakened by jobless growth and massive inflation destroying people’s purchasing power. Absorption has been undermined by the failure to invest in safe drinking water and sanitation. All three consequences are directly traceable to neoliberal policies. Yet, the UPA government hypocritically talks of food security and has promulgated a so-called Food Security Ordinance in an attempt to gain political mileage while flouting all norms of parliamentary democracy.”

Documents for reference:

The National Food Security Bill, 2013
The National Food Security Bill, 2011
The National Food Security Ordinance, 2013
Report of the expert committee on the national food security bill
Lok Sabha Standing Committee report on National Food Security Bill
Food subsidy and its utilisation
NRAA – Challenges of food security

Food Prices, Health and Nutrition: Red-flag indicators for India’s 12th Plan

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Macroscan, the website is maintained by Economic Research Foundation, professional economists seeking to provide an alternative to conservative and mainstream positions, has posted an article I have written on ‘Food Prices, Health and Nutrition: Red-flag indicators for the 12th Plan’. Here is the opening section.

India rice price trends

The long-term impacts of food inflation on the rural and urban poor are yielding worrying indicators in the nutrition and health sectors. The debate over the provision of the National Food Security Bill and over the reform of procurement for the public distribution system has helped a great deal to bring to the foreground persistent inequities in food access and quality. What remains are the health and nutrition dimensions that are also determined by access to food, the prices at which food items are available and the extent to which food inflation determines nutritional choices for citizens in low income categories. Some of these linkages are brought out by reading together new data from the National Sample Survey Organisation’s 66th Round, and recent trends in retail food prices.

Retail prices of the separate elements of a common food basket are recorded by the Ministry of Food and Consumer Affairs (FCA), Department of Consumer Affairs, for 49 cities. This is a new series of 22 items, compared to the 16 items the FCA had maintained until early 2011. For rice and wheat there is a curious pattern to the price rise. The price band for the 49 cities moves up over time, but it also expands over that time. This can be seen in Chart 1.

With Bharat Nirman-centric infrastructure programmes deepening the connectivity between food supplying districts and consuming regions and with growing investment in agri-logistics and in food retail chains, in fact the reverse ought to happen. That is, food basket staples should be displaying greater homogeneity in retail prices. However, there are a variety of other factors influencing the price band (for the FCA’s 49 cities as much as for district kirana shops) and some of these are external factors such as energy costs, new demand centres arising in fast-urbanising towns which skew distribution costs and corner investment, and the offtake by the food processing industry which is growing at an annual rate of 14%-15%.

India rice and wholesale price index

While a number of factors are at work behind the divergences over time between states and between rural and urban consumption centres, these are not reflected by the movement of the Wholesale Price Index. However, it can convincingly show the variance between types of measurements. The Office of the Economic Adviser maintains the Wholesale Price Index (WPI). After indexing the upward movement in WPI (new series 2004-05) for rice from January 2006 and also indexing the minimum and maximum prices per kilo of the 49 cities’ price trendline, Chart 2 is the result.

As pointed out in a number of articles and commentaries on MacroScan by Jayati Ghosh and C P Chandrasekhar, there is a gap between the rate of increase of CPI for food items and the WPI for those items. This we can see in Chart 2. What we also see is that from October 2008 to January 2010 the rise in WPI accompanied, more or less, the rise in the lower limit of the rice price trendline. From January 2010 onwards, the difference in the growth rates of the WPI for rice and of the rice trendline is significant. This is the ‘fair average quality’ of rice. Yet the gap between the lower price trendline and the WPI is now greater than it has been at any time during 2007-08, when the global food price shocks took place.

How have these price trends hurt households in the lower deciles of consumption in both rural and urban areas? One of the early results of the 66th Round of the NSSO, ‘Key Indicators of Household Consumer Expenditure in India, 2009-10’, provides an answer. The state- and decile-grouped summary data tables show that for 16 major states, the rate of increase in monthly per capita expenditure (MPCE) on food has been faster than the rate of increase of the total MPCE. What has been the impact in the states? For example, with both food and total MPCEs indexed to the levels found in each state by the NSSO in 2003,  the food MPCE rose by 87% in 2009-10 in rural Maharashtra whereas the total MPCE rose by 65%. In 2005-06, food MPCE in rural Maharashtra had risen 14% and the total MPCE had risen 19%.

[Macroscan, the alternative economics website, has the full article.] [pdf only is here.]