Delivering food security

Will coupons work better than commodities?

The well-intentioned food security Bill, cleared by the empowered group of ministers (EGoM) and now awaiting Cabinet approval, continues to raise issues that have not been fully resolved. Apart from the fact that it falls short of the Congress party’s election promise of guaranteeing nutritional security for the poor, it is still not clear how the government intends to mobilise the food stocks required to implement such a Bill across the country, and ensure that they reach the targeted families. The existing public distribution system (PDS) has been found wanting on many counts, apart from the fact that in parts of the country where it is needed the most, it does not even exist! In its present form, the draft of the Bill seeks to give the poor a right to get 25 kg of rice or wheat every month at Rs 3 a kg. Though it is not clear whether this quota would be in addition to the 35 kg of foodgrains provided to the below poverty line (BPL) households now or in place of it, there would be problems in both cases. Apart from the fact that the government would be required to arrange for required foodgrains, from the domestic market or abroad, with contingent implications for food prices, it would also exert a huge burden on the public exchequer. The burden on this count would rise further if the EGoM’s other recommendation of also enhancing the quantity of the subsidised grains supplied to the above poverty line (APL) people is also implemented. On the other hand, if the new statutory food quota replaces the existing PDS entitlement for BPL families, of 35 kg grains, which actually seems to be the case, this would tantamount to toning down, instead of strengthening, food security for the poor. In any case, 25 kg of foodgrains per month cannot by any stretch of imagination be expected to take an entire family (of five members, on average) above malnutrition line. What is worse, many of the poor, especially wheat consumers, will end up paying more for food as the present price of wheat for BPL is just Rs 2 per kg, against Rs 3 mooted in the new law.

The existing PDS is wholly unfit for serving the objective of food security for all. Besides being woefully inefficient, it reeks of corruption, leakages and wastages. A Supreme Court-appointed Central Vigilance Committee has said so after scrutinising its operation in different states. While in some states the PDS has wholly collapsed, in others it is inefficient and corrupt, resulting in large-scale diversion and black-marketing of highly subsidised grains. There is also the issue of a discord between the Centre and the states over the number of BPL people to be covered under the new system. Going by the Centre’s (read the Planning Commission’s) reckoning, the BPL households in the country number around 60-odd million. But the states, put together, have already issued over 80 million BPL ration cards even while leaving a sizable chunk of the genuine poor without an access to the PDS. Considering all these issues, it may indeed be prudent for the Centre to revisit the provisions of the draft food security Bill, especially in light of the views expressed in the Union finance ministry’s recent Economic Survey on the advisability of a coupon system. Direct cash transfer to the poor has, in some countries, worked better than delivering food through a government-run system. A workable system, even if the second-best, is better than a non-workable ideal policy based on a non-working system.