The impending law on Food Security is set to open new avenues in the field. The opportunities in food processing, storage and transportation are waiting to be exploited. Let us help you sow the right seeds so that all stakeholders can reap the benefits.
India’s per capita GDP is projected to grow 320 percent by 2030 according to a report. The overall food consumption is expected to touch around Rs 23 lakh crore in 2030 from about Rs 11 lakh crore in 2011. Per capita consumption is expected to increase to Rs 15,731 from Rs 9,355 over the same period. Agricultural output at farm gate prices is expected to grow to over Rs 29 lakh crore in 2030 from over Rs 12.6 lakh crore in 2011. Processing is estimated increase to more than Rs 5.5 lakh crore from around Rs 1.1 lakh crore over the same period. Food exports could soar to Rs 7.72 lakh crore form Rs 1.4 lakh crore. For exploiting this opportunity, the entrepreneurs would need to overcome supply-side impediments and create farm gate to fork delivery.
On June 3, 2013 an ordinance was promulgated giving two-thirds of India’s population the right to monthly quota of subsidised food grain. The Food Security Bill also allows for cash transfers and food coupons instead of grains. Costs would be shared by the central and state governments. The ordinance must be approved by both the Houses of Parliament within six months of promulgation. India now joins the league of countries which guarantee food grains to majority of their population. With an outlay of around Rs 1.25 lakh crore in government support, the food security programme will be the largest in the world. Of this amount around Rs 90,000 crore has already been earmarked in the Budget for 2013-14.
According to the ordinance, 75 percent of the rural and 50 percent of the urban population will be eligible for 5 kg of food grain every month. Those eligible will have to pay Rs 3 per kg for rice, Rs 2 for a kg of wheat and Re 1 per kg of coarse grains. Those covered by Antyodaya Anna Yojna will continue to get 35 kg of food grain per household per month at these subsidised prices. The centre will decides state-wise coverage. The states and Union territories (UTs) will identify eligible households using either their own criteria or the social economic and caste census data.
The ordinance lays special emphasis on women and children. Pregnant women and mothers who are breast-feeding children will be given at least Rs 6,000 for six months besides nutritious meals. Children aged between six months and 14 years will be given either ration or hot food cooked according to nutritional norms through Anganwadis and mid-day meal scheme.
If the central government is unable to provide its quota of food grain, it will give money to states/UTs. The state and UT governments will have to provide monetary allowance to entitled persons if they are unable to provide food grain or meals. The amount of the food security allowance will be decided by the central government.
The central government will also subsidise the expenditure by states towards on intra-state transportation, handling of food grain and margin of fair price shop dealers. The rules for this will be framed later.
The ordinance also talks about reforms in the public distribution system (PDS). These include doorstep delivery of food grain, use of information technology including end-to-end computerisation, use of Aadhaar for identifying beneficiaries, and expanding the basket of commodities under the Targeted PDS (TPDS).
The ordinance recognises the household’s eldest adult woman as the head of the household for issuing ration card. The eldest male member will be considered the head if there is no adult woman.
The ordinance envisages state and district level redressal mechanism. The states can utilise the existing machinery such as the district grievance redressal officer (DGRO), and the State Food Commission.
For ensuring transparency and accountability, the ordinance stipulates disclosure of records concerning PDS, social audits and setting up of vigilance committees. It also provides for penalty if public servants or authority are found guilty of failing to comply with the relief recommended by the district grievance redressal officer.
The Food Security Bill has drawn flak from many quarters. The critics of the bill question the focus on food entitlement and provisioning of commodities, and whether broader issues such as land reform and agricultural policy should have been addressed.
Another point of contention is the population being covered keeping in mind the controversies over the errors and problems relating to identification of beneficiaries for below poverty line (BPL) list. Also different agencies have touted differing numbers of poor. A section would have preferred universal coverage, especially with procurement of over 200 million tonnes of wheat and rice, and the central pool having more than twice the buffer needed. The supporters of the bill argue that targeting is preferable keeping various constraints, including production and burden on exchequer, in mind.
The reduction in the ration being provided under the current targeted public distribution system is another sore point.
The long-term sustainability of the plan has also been questioned. According to a World Bank report, depleting ground water levels in India threaten the sustainability of agriculture and pose risk to environment. The Food Security Act would add to this threat by influencing the choice of farmers. Rice, a water-consuming crop, will not only be supplied as per the Act but also has a minimum support price (MSP). This would result in more farmers taking to rice cultivation and thus hastening depletion of ground water table.
Even otherwise the agriculture sector is afflicted with several problems including low productivity, dependence on monsoons, unremunerative prices for farmers, poor storage facilities leading to immense wastage, small land holdings, decrease in government investment in rural areas, especially in irrigation and black marketing.
Chhattisgarh’s public distribution system (PDS) has shown that if there is political will a dysfunctional system can be fixed. The state has been able to deliver decent quality grain on a fixed date every month to all villagers holding a ration card. This was made possible by handing over the running of ration shops to self-help groups, panchayats and cooperatives. Strict monitoring, transparency and punishment of the guilty have ensured that the system delivers. Chhattisgarh has also shown that cash transfer or Aadhar are not a must to provide food security to the poor.
(Disclaimer: The information has been aggregated through secondary research. IFIE is not responsible for errors if any)