A question of food security
The country’s food security is seriously compromised by the report of the high level committee headed by former food and civil supplies minister Shanta Kumar. The timing of the constitution of the committee and release of its report are crucial. The WTO summit at Bali mandated the governments to stay off the market. The terms of reference were tuned to the mandate of WTO Bali summit, argues Veeraiah Konduri
The Narendra Modi government appears committed to removing any state intervention which hinders the free play of market forces. This is clear from its policy pronouncements, be it FDI in insurance, defense, railways, or privatization of Navaratna companies by incremental sale of shares. It also seems set to destroy all the protective systems which are kept in place in country’s endeavor of economic development.
Enough evidence comes from the High Level Committee appointed by the Prime Minister under the chairmanship of Shanta Kumar, former union minister for Food and Civil Supplies.
Constituted on 20th August 2014, the committee in its report made a scathing attack on the basis that brought FCI into existence. Thus the report is eyewash to re-route government’s predetermined policy orientation.
It is surprising that food security failed to get space in the elaborate terms of reference. Instead, there was a detailed recommendation about phasing out the public distribution system in its current form and change over to cash transfer scheme, whose efficacy is yet to be proved. Soon after it came to power, the Modi regime issued guidelines to state governments asking them to discontinue incentivizing the levy procurement.
The timing of the constitution of HLC and release of its report are crucial. The WTO summit at Bali mandated the governments to stay off the market. The terms of reference were tuned to the mandate of WTO Bali summit.
The procurement of levy rice by Food Corporation of India has been found one of such market distorting state interventions in India. There has been a suggestion to privatise procurement of agricultural produces. Procurement by private players is a vital link for establishing the back supply chain for the sustenance of large scale retailers such as Wallmart.
Thus, the withdrawing the state intervention in procuring agricultural commodities through various channels such as FCI, STC, MMTC, CCI is only to meet the dual tasks that feed the entry of private capital both foreign and domestic. Already certain vested interests have filed a petition in the Competition Commission of India seeking its intervention to study whether the FCI procurement amounts to restricting the entry of private players there by restricting the open market competition which in turn violates the law enacted by parliament.
It is surprising that food security failed to get space in the elaborate terms of reference. Instead, there was a detailed recommendation about phasing out the public distribution system in its current form and change over to cash transfer scheme, whose efficacy is yet to be proved. Soon after it came to power, the Modi regime issued guidelines to state governments asking them to discontinue incentivizing the levy procurement.
committee, neither the experiences of 1960s’ severe drought and food scarcity nor falling production etc, from concluding “… the larger food management system, of which FCI is an integral part, has not delivered on its primary objectives very efficiently.”
A part of the recommendation on page 44 tabular format said, “Of course, FCI may not be directly responsible for many of these.” Why, then a recommendation that FCI be dissolved or unbundled? What is the logic behind this?
The FCI was set up in 1965 under Food Corporation Act 1964 against the backdrop of major shortage of grains, especially wheat. To face the eventual food crisis, the country, then, embarked on large scale import of Pl 480 which had its own implications in terms of foreign exchange management and price volatility in the global market. That was the time when the government looked inward and argued for self-sufficiency in food production. Accordingly the agrarian reforms were redirected towards enhancing the food production and embarking on the green revolution. This helped the newly emerging rich farmers’ community to go on producing to meet the nation’s requirement.
As time moved on, global and domestic economic conditions changed and the government embarked on reforms spree regime. Several reforms measures were unleashed during the last two and a half decades. The basic objective of these reforms is to delink the rationale of social responsibility underlying the series of economic decisions that were taken and institutions that came up during the era of mixed economy. Once we moved away from the rationale behind emergence of each institution, it won’t take much time to recommend, comment against the spirit and objectives of the institutions themselves. That is what the neoliberal elite in India is contributing nowadays.
The neoliberal elite picked up some holes in each of these institutions, mechanisms and processes. These holes are calculatedly developed over the period of time as part of government non committal response to meet the situation arising out of new developments. Now the same consequences of government’s ineptness is being used as basis for undermining the system itself. The HLC’s recommendation of handing over all procurement operations of wheat, paddy and rice to states is one in such direction. That means in effect, the responsibility of food security related management is left to the state governments that are already reeling under mountains of debts and deficits, courtesy, neoliberal reforms which undercut the income sources of state governments.
Arguing that the MSP mechanism is benefiting few farmers, the HLC recommended to discontinue with this mechanism itself. In this direction, the HLC recommended that the Center should make it clear to states that in case of any bonus being given by them on top of MSP, it will not accept grain under the central pool beyond the quantity needed by the state for its own PDS and OWS.
Arguing that the MSP mechanism is benefiting few farmers, the HLC recommended to discontinue with this mechanism itself. In this direction, the HLC recommended that the Center should make it clear to states that in case of any bonus being given by them on top of MSP, it will not accept grain under the central pool beyond the quantity needed by the state for its own PDS and OWS.
The instrument of bonus on the top of MSP is being mastered by the state governments over the period of time in order to keep their ruling alliance with the farming community under the leadership of rich farmers intact. Now, the farming community is going to lose good quantities of benefit that is being showered on them occasionally by the state governments. But in the long run, it has the potential to change the ruling class alliances in rural India.
The most damaging recommendation is about the implementation of National Food Security Act. Though the NFSA was enacted almost two years before, it failed to come in to operation till now. The BJP in its poll campaign had promised to immediately implement NFSA. On the other hand, now through HLC recommendations it is going to put the food security commitments permanently in to the dustbin.
The HLC recommended that government takes a second look at NFSA, its commitments and implementation. The HLC report says, “Leakages in PDS range from 40 –50%, and in some states go as high as 60 – 70 %.” In this context, the HLC further goes on to recommend, “ GoI should defer implementation of NFSA in states that have not done end to end computerisaion, have not put the list of beneficiaries online for anyone to verify, and have not set up vigilance committees to check pilferage from PDS”.
At the same time, the HLC failed to go through the reasons behind such problems. It just pooled up the criticism of neoliberal elite against the social security measures in general and against the PDS in particular and proceeded to conclude that the whole system centering on FCI is wrong and it needs to be unbundled.
