The present food security system in India is marked by strange
paradoxes[1].
Under this system the relatively affluent farmers in the better of irrigated
areas are given incentives in the form of a high and rising support price. The
Procurement and distribution of food grains involves a subsidy and it is
believed to go not to the consumers of PDS grains but to make good the losses
incurred by the FCI. PDS has remained untargeted for years and even today the
benefits do not reach the targeted population. It can also be easily seen that
poor seem to prefer to purchase food grains in the open market despite all
government efforts. The system originated as a response to a critical food
crisis and it works well in the situation of crisis. Rao further mentions if
earnestly implemented liberalization could enable the food security system to
much more effectively help the poor at much less cost. The food security system
has to aim at three objectives:
·
Keeping the aggregate production at or above the level necessary for
self sufficiency
·
Reducing the instability in food grain markets
·
Making dependable arrangements for helping the poor to get adequate
access to food
Regarding the first two objectives mentioned above, they may be better
served by phasing out the government interventions rather than by continuing
the present price support cum procurement operations. Given the recent strong
and broad based trend in production of food grains and its likely continuance it
makes little economic sense to continue with a highly centralised and
subsidized arrangements for procuring large quantities of food grains in one
corner of the country, to store them for long periods often in the open in the
absence of storage space and to move them over long distances for distribution
to consumers who appears to be increasingly turning to the market for meeting
their requirements.
Again this system is confined to rice and wheat- has hardly much
relevance in stabilising the food grains markets which comprise besides rice and
wheat coarse cereals and pulses marked by considerable instability in prices.
So long as the production and supply situation continues to be comfortable, the
best policy would be to leave the markets free and gradually diminish the
present large scale procurement operations. FCI may be allowed to work as an
autonomous company on commercial principles but during the time of drought/crisis it should take control of the entire system.
Regarding the third objective, viz., making dependable arrangements to
ensure adequate access to food for the poor, it is necessary to keep the
following points about the PDS in mind:
The families purchase part of their requirements from the open market.
Sharma (1995) Indrakant (1995) Rao (1996) Radhakrishna (1996) find a number of
poor depends totally on market. It would be necessary to find out how far the
poor turn to the market because of absence of PDS or its poor quality and how
far due to positive preference?. It would also be important to know how is the
grain purchased by the poor from the market is utilised.
The NSS data on consumer expenditure indicates that over the recent
years the lowest three deciles of the population rural as well as urban have
increased the consumption of non-food grains food items like milk edible oil
sugar and Gur and other food while their consumption for cereals has remained
unchanged or even declined. There are reports that upper strata among the poor
tries to catch up the consumption pattern of the strata above them. Such people
may sale off the PDS grains in the open market to finance their purchases on
non-food grain items below the price of their purchase. Some members of the
family may sale the grain to finance their liquor consumption or the
consumption of tobacco products.
The PDS and food security provisions therefore need to design in such a
way to prevent such types of misappropriations. The present thinking of issuing
the Smart Card to the beneficiary of
the scheme of Cash Transfer may
simply assure that the food grains reaches in the hands of the targeted
beneficiary. The beneficiary in the target group should be classified on the
basis of the ownership of assets as (a)asset rich-income poor (b) asset
poor-income poor (c) asset less-income poor. The first target should be the
third category of beneficiaries. This group is most vulnerable and also most
careless. They simply does not care for themselves and also misuse the benefits
by reckless expenditure pattern. This is the only reason for their not having any
productive asset. If cash benefits are
transferred to them they may misuse use it
for financing their bad habits. If the beneficiary himself is misusing
the benefits who is going to stop them and how? One possible way is to give
this responsibility to the Panchayati Raj Institutions at local level. It is
believed that the decentralisation will make the system more transparent and
the active participation of the needy poor will definitely improve the food
security system meant for them. Another suggestion may be that such
beneficiaries should be provided with the
benefits in group through a scheme like mid-day meal so that any one
person may not spoil the scheme.
Thus at last it can be concluded that the concepts of Poverty and
hunger (including APL/BPL) need to be clearly defined. It is a matter of great
concern that even today the Government does not have any acceptable definition
of these concepts. The international agencies working on these themes may not
provide us a clear understanding of these concepts. There are so many areas
where we will have to do the serious research. I am of the considered opinion
that the over centralisation of the administration is not going to provide us
any relief therefore the local problems should have local solution. The burden
of the inefficiencies of the government functionaries and machinery should
not be subsidized by the public money. Either a government intervention should
be helpful or else it should quit quietly. The market is efficient and it will
take care of poor in much more efficient way than government.
___________
Abstracts from the Presidential Address delivered by me at 33rd Annual Conference of Rajasthan Economics Association at JNV University Jodhpur on 18th January 2013.
[1] V.M. Rao (1996), Policy
Research for Liberalized Agriculture: Some illustrative Research Areas, Indian
Journal of Agricultural economics, Vol.51 No.1&2, Jan-Jun. pp. 138
