Food security for dummies: it's about people, not Amartya Sen, and it works
The battle for the Food Security Bill should not be confined to the centre. Ultimately, it is the states where it will matter to people. States like Tamil Nadu and Chattisgarh prove that it works.
What exactly is the problem of the BJP and its proxies, including the Right wing economists, to the Food Security Bill that the UPA is trying to push through in the din of the Parliament?
The BJP doesn’t want to pass it because it first wants the UPA to eject two ministers who are facing allegations of corruption, while the proxies are against it because they think it’s rubbish and is a wasteful way of spending taxpayers’ money.
BJP’s argument and motive are perfectly understandable because they are political although its obstinacy in stalling every other business of the Parliament of 1.2 billion people is irresponsible. As the principal opposition, it could have found a middle path in the interest of the country and its democracy, particularly when it claims ownership of the idea of food security itself.
But the arguments of the proxies, firing from the shoulders of the BJP - with or without their support - have to be viewed with intense suspicion because it shrouds a clear ideology - the ideology of the market.
One of the voices against the Bill is that of Arvind Panagariya, who has been trying to tell the world for a few months that child malnourishment in India is a myth and that the exemplary Kerala model of human development is in fact the Gujarat model. According to him and others, instead of food security in kind, the government should just doll out cash to the beneficiaries.
The main arguments of the anti-Bill voices are centered around the cost, the possible pilferage by middleman and wastage because of a derelict supply chain and inefficient PDS (public distribution system).
Not that the UPA’s Bill is perfect (because it has the indelible exclusionist principle of the Planning Commission writ all over, and the possibilities of backdoor entry of cash transfer among several other defects) and there are reasons to oppose it so that it becomes more useful to the people of the country.
But the apparent purpose of the opposition to the Bill is to completely scrap it and not to improve it. Is it political, ideological or both?
Let’s look at three main arguments of the anti-Bill voices and address them.
Argument no 1: The cost at Rs100,000 crore per year is too steep.
Response: As right to food activists argue, it is just one per cent of the country’s GDP and only an addition of Rs 35,000 crore to the existing food subsidies of Rs. 65,000. And a substantial part of the cost will go towards the PDS. For an economy of India’s size, it isn’t much if one looks at the multidimensional impact ranging from nutrition, productivity of people to women’s empowerment.
Argument no 2: The PDS doesn’t work and at the present rates of diversion, (at least 40-50 per cent), wastage and inefficiency, the supplies will never reach the beneficiaries. Putting more money and food on the PDS will lead to more wastage and leakage. The Bill is politically motivated and will lead only to more corruption.
Response: The PDS in most parts of the country are defective and are plagued with pilferage and wastage. The supply chain is archaic and grains meant for people at Food Corporation godowns and warehouses of the state governments do get rotten and eaten by rats. But wherever the administration wants it to work, it works and is a lifeline for the poor. When more people use it and demand for better services, it works better.
The success stories from the BJP-ruled Chattisgarh and Tamil Nadu are brilliant examples of how the PDS system is central to the food security of common people. Interestingly, Chattisgarh follows a targeted approach, in which beneficiaries are pre-identified whereas in Tamil Nadu, it’s universal - means it’s open to all.
Both these models, although opposed to each other on the principle of targeting, debunk the theory that the PDS doesn’t work. Additionally, they also show that if the PDS doesn’t work, the way forward is not to junk them, but to reform them.
That is exactly what Chattisgarh government did. The chief minister Raman Singh who made this dramatic transformation has said that the most common complaint that he received from people as he toured the villages after assuming office was about PDS and how 50 per cent of the supplies never reached them. Singh, then unleashed a reforms programme that made people own and use the PDS system. Singh is also clear that the PDS and food security are at the heart of his pro-poor policies. Purely riding on a reformed PDS, he is today a best practice poster boy on food security.
Similarly, in Tamil Nadu, the centrality of PDS in the lives of common people has been a political priority for both the DMK and the AIADMK, which has won the appreciation of the Wadhwa committee despite its deficiencies. As the committee noted, they state government has undertaken extensive reforms of the system including deployment of modern technology, and the beneficiaries are happy. In addition to the central government subsidies, the state spends Rs 4,000 crore on PDS. Recently, Jayalalithaa said she would offload one lakh metric tonnes of rice in the open market to ensure that there is no price rice. This is over and above the supply through PDS.
As this BusinessLine article notes, universal PDS works better in terms of reducing pilferage and wastage and benefitting the poor. A PDS field survey in 11 states in 2011 clearly showed impressive revival of the PDS. The reforms needed were both on the “demand-side” and the “supply-side”. In fact, both the Chattisgarh and Tamil Nadu examples of reforms also pretty much narrate the same story.
Argument no. 3: Give cash instead of food. Let the people buy it from the market. Even while trying to pick holes in Amartya Sen’s argument for the Food Security Bill, Panagariya said on NDTV on Tuesday that with the same money each family can get Rs 6000 per month.
Response: Stopping food supplies in lieu of cash transfer will instantly dismantle the PDS system. Along with it, will also disappear the procurement by the government, the support prices and a whole lot of support mechanisms that keep farmers and farming alive.
Instead, it will be replaced by the market which will be too happy to buy cheap from the farmers and sell at double or triple the prices. It will be happy to have millions of people with cash to buy what they are willing to sell at the prices they like. The difference in support prices of the government for some essential commodities such as dal and the corresponding market prices is a clear indication of the hidden danger to both farmers and the poor in the country.
Secondly, when they get a fixed amount of money, instead of an assured quantity of food, who will protect them against food price inflation? Of course, the market and its proponents will like food price inflation because it helps make windfall profits.
This is where a regular assured supply of food, irrespective of the prices, makes sense. Money is no match for food security if it’s not automatically adjusted to inflation. People who argue for cash transfer are in fact arguing for market interests, not for the interests of the people. Moreover, for the sheer threat to the PDS and the attendant ecosystem, it has to be fiercely opposed.
Equally important is the fact that there is no guarantee that people will buy food with the cash they get. Can anybody ensure that the men don’t use it to buy liquor or the family doesn’t spend it on something else? How does cash ensure food security? Can people like Panagariya explain that?.
As economic John Dreze says, cash transfers are still imaginary where as the PDS is real. All that we have on cash transfers are some boutique examples pushed by organisations such as the World Bank and the UNDP, most of which don’t make any sense at scale. Does the UNDP have any expertise in running national or local governments? Does it know for sure what worked in pockets of Mexico or Brazil will work in a completely different (demographically, politically, administratively, culturally and socio-economically) India?
Interestingly, studies in several states of India clearly show that a stunning majority of people, particularly women, don’t want cash, but food supplies. There is clear tendency among the cash-for-food proponents, including the World Bank and UNDP, to obfuscate by conflating it with conditional cash transfers and other types of transfers such as pensions. Cash-for-food is fundamentally different from transfer of cash entitlements.
So, should one support the UPA’s Bill?
Should one oppose the Bill as well?
Yes, of course.
One should support the passage of a Bill even while opposing the shortcomings - both advertent and inadvertent. There should be unrelenting pressure on the government for PDS reforms - Chattisgarh and Tamil Nadu are great examples to start with - and improving the entire ecosystem, most importantly the supply chain.
The battle for the Food Security Bill should not be confined to the centre. Ultimately, it is the states where it will matter to people. It’s still a challenge to make leaders of the badly governed states accountable to people. Giving cash in those places, as the Food Security Bill hints, will only worsen the situation.
Food security should be a national, political and citizen’s movement which should outrightly reject the voices of imports speaking for the market. The UPA’s Bill is far from perfect, but is the beginning. That is precisely why Amartya Sen and John Dreze are supporting it.
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