National Food Security Bill – Effects and Defects

Bhargavi Chandrasekharan
What prompted a Food Security Bill?
India’s high economic growth rate in the past decade has not been fully reflected in the health status of its people, with 22 per cent of its population undernourished. According to the National Family Health Survey 2005-06, 40.4% of children under the age of three are underweight, 33 per cent of women in the age group of 15-49 have a body mass index below normal and 78.9 per cent of children in the age group of 6-35 months are anaemic. These are disturbing statistics which point to nutritional deficiencies. The National Advisory Council (NAC) proposal for a National Food Security Bill (NFSB) is perhaps the most important national effort yet to address these deficiencies in India.
Intent of NFSB
The NFSB proposed by the NAC is a potentially revolutionary bill that can have a huge impact on the economy. Well crafted and effectively executed, it can transform the lives of people. The salient features of the NFSB proposed by the NAC are:
• Legal entitlement to subsidized foodgrains to be extended to at least 75% of the country’s population – 90% in Rural areas and 50% in urban areas
• The priority households (46% in rural areas and 28% in urban areas) to have a monthly entitlement of 35 Kgs (equivalent to 7 Kgs per person) at a subsidized price of Rs. 1 per Kg for millets, Rs. 2 per Kg for wheat and Rs. 3 per Kg for rice
• The general households (39% rural and 12% urban in phase 1 and 44% rural and
• 22% urban in final phase) to have a monthly entitlement of 20Kgs (equivalent to 4 Kgs per person) at a price not exceeding 50% of the current Minimum Support
• Price for millets, wheat and rice
• The minimum coverage, entitlement and price to remain unchanged until the end of the XII five year plan
• Government of India to specify the criteria for categorization of population into priority and general households
• In the first phase, food entitlement to be extended to 72 per cent of the population. In the final phase, to be completed before March 31, 2014, full coverage of food entitlement (to 75 per cent of the population) to be ensured
• Legal entitlements for child and maternal nutrition, destitute and other vulnerable groups
• Reform of the Public Distribution System
Estimates of Foodgrains Required for Implementing the NFSB
Million tonnes
NAC Projections* Scenario 2* Scenario 3*
Scenario 1 Offtake – priority- Offtake-100%
95% ; general-85%
Phase 1 Final Phase Phase 1 Final Phase Phase 1 Final Phase
Priority 34.40 36.42 38.91 39.83 40.96 41.93
Households

General 14.96 19.17
Households 15.13 18.75 17.80 22.05


Sub Total 49.36 55.59 54.04 58.58 58.76 63.98


Other Welfare
Schemes 8.00 8.00 8.00 8.00 8.00 8.00

Buffer Stock - 2.00 2.00 2.00 2.00


Total
Foodgrain 57.36 63.59 64.04 68.58 68.76 73.98

*Population – Scenario 1 – October 2010; Scenario 2 &3 – Phase 1-October 2011; Phase 2- October 2013
Foodgrain Production and Procurement – Trends and Projections
Production and Procurement of Wheat and Rice
Million tonnes
Production Procurement

Wheat Rice Total Wheat + Rice As ratio of
production (%)
2000-01 69.68 84.98 154.66 41.91 27.10


2001-02 72.77 93.34 166.11 41.18 24.79


2002-03 65.76 71.82 137.58 32.22 23.42


2003-04 72.16 88.53 160.69 39.62 24.66


2004-05 68.64 83.13 151.77 39.47 26.01


2005-06 69.35 91.79 161.14 36.88 22.89


2006-07 75.81 93.36 169.17 36.24 21.42


2007-08 78.57 96.69 175.26 51.43 29.34


2008-09 80.68 99.18 179.86 59.07 32.84


2009-10 80.71 89.13 169.84 53.98 31.78


2010-11 82.00 95.41 177.41* 53.22** 30.00


2011-12 83.61 104.21 187.82* 56.35** 30.00
(Phase 1)

2013-14 85.61 106.41 192.02* 57.61** 30.00
(Final Phase )

* Projections as per Department of Agriculture & Cooperation, Govt. of India **Assuming an optimum procurement of 30 per cent of total production
NFSB tabled in Lok Sabha
The much-awaited National Food Security Bill, 2011, which makes cheaper foodgrains a legal entitlement to 63.5 per cent of the country’s population, was tabled in the Lok Sabha on 22.12.2011.
The Bill was introduced by Food Minister K.V. Thomas in the presence of Congress president Sonia Gandhi, who has been keen on ensuring that the law is enacted. It seeks to “provide food and nutritional security by ensuring access to adequate quantity of quality food at affordable prices to people [to enable them] to live a life with dignity.”
The proposed law marks a paradigm shift in addressing the problem of food security — from the existing welfare approach to a right-based approach. Besides expanding the coverage of the Targeted Public Distribution System, it will confer legal rights, enabling eligible beneficiaries to receive foodgrains entitlements at highly subsidised prices.
Also, Section 32 of the bill mentions the States’ responsibilities: they will at their own cost organise the grains’ intra-state transport and deliver them to fair price shops in time for distribution among the beneficiaries. The States must ensure the grains reach the target population. They must set up and maintain storage facilities at the state, district and block levels. If a State fails to supply the entitled quantity of grains (or meals) to a beneficiary, it must pay them a “food security allowance” out of its own pocket.
Benefits of NFSB – Free Meals
The law will also confer legal rights on women, children and other special groups — destitute, the homeless, disaster-and-emergency-affected persons and persons living in starvation — to receive meals free or at an affordable price.
The law will entitle people eligible under the priority category (Below the Poverty Line families) to a monthly allotment of 7 kg of foodgrains, comprising rice, wheat and coarse grains, per person. Rice will be provided at Rs. 3 kg, wheat at Rs. 2 and coarse grains at Re. 1.
The general category will get at least 3 kg of grain at a rate not exceeding 50 per cent of the minimum support price.
The subsidy will be extended to up to 75 per cent of the rural population and up to 50 per cent of the urban population — with not less than 46 per cent of the rural population and 28 per cent of the urban population designated as priority households.
Maternity Benefits
Every pregnant woman and lactating mother will be entitled to meals free of charge during pregnancy and six months after childbirth, through the local anganwadi.
The Bill provides for a maternity benefit of Rs. 1,000 a month for six months. Besides, every child up to the age of 14 shall have entitlement to nutritional needs. For children between six months and six years, appropriate meal would be provided free of charge through the local anganwadi to meet nutritional standards. For children in the 6-14 age group, one mid-day meal would be given free of charge every day, except during holidays, in all schools run by local bodies, and government and government-aided schools up to class VIII.
Effect of Food Security Bills – Tamil Nadu perspective
Under the proposed National Food Security Bill, 2011, no State would be able to provide subsidized food to anyone that the Centre rules out of its beneficiaries’ list
The Bill, tabled in a hurry ahead of the UP polls faces criticism from non-UPA-ruled state governments like Bihar and Tamil Nadu, as it prevents the states from enlarging its ambit to benefit poor that the Centre does not identify.
TN CM Jayalalithaa’s letter to the PM
Chief Minister Jayalalithaa on 20.12.2011 expressed her “strong opposition” to the draft Food Security Bill, 2011 and urged the Centre to exempt Tamil Nadu from the purview of the Bill.
In her letter to Prime Minister Manmohan Singh, she said the proposed Bill was replete with “confusion and inaccuracy.”
The proposed classification of target groups into priority household (PHH) and general household (GHH) for delivery of food entitlements would surely invite sharp criticism and furious opposition from everybody concerned. The very basis of such classification was unscientific and unacceptable.
Similarly, no reason had been adduced for restricting the coverage under Targeted Public Distribution System (TDPS) to 75 per cent of the rural population and 50 per cent of the urban population under the proposed Central Bill.
“The most significant point is that the forced implementation of TPDS, as contemplated under the Central Bill, will entail an additional financial burden of about Rs.1,800 crore per annum with no statutory commitment forthcoming from the government of India,” Ms. Jayalalithaa said, adding that the annual food subsidy for the State was Rs.5,000 crore.
TN’S Loss: The Hindu dt. 24.12.2011
If National Food Security Bill is adopted in its present form, Tamil Nadu stands to lose at least six lakh tonnes of rice from the Central allotment annually if the National Food Security Bill, introduced in Lok Sabha on 22.12.2011, is adopted in its present form.
On an average, the Central government provides the State around 35.6 lakh tonnes of rice annually under three categories – Antyodaya Anna Yojana (AAY), Below Poverty Line (BPL) and Above Poverty Line (APL). It fixes a quota for each category and fixes different prices for the three categories.
As part of the Bill, two categories of people – general households (GHH) and priority households (PHH) – will be covered. Seventy five per cent of rural population and 50 per cent of urban population will be eligible for entitlements. Of them, 48 per cent of the rural population and 28 per cent of the urban population will be designated as PHHs. Adopting these yardsticks, the total allocation will be around 29 lakh tonnes a year.
Measures suggested compensating the deficit
The State government will have to address two major issues to tide over this gap – availability and cost. In the country, major rice millers are available only in three other States – Andhra Pradesh, Punjab and Chhattisgarh. A senior official says that the shortfall of six lakh tonnes cannot be bridged that easily. Even assuming that the price of rice is Rs.20 per kg, the additional cost will be Rs.1,200 crore.
But, the financial burden is going to be higher as the actual requirement of the State is 39.6 lakh tonnes. After the All India Anna Dravida Munnetra Kazhagam government, in June, launched the scheme of supplying 20 kg rice free, the monthly requirement has gone up. During 2010-2011, the monthly average supply of rice was 3.17 lakh tonnes. Now, it is around 3.4 lakh tonnes.
At present, the State government procures the remaining four lakh tonnes through measures such as rice purchase under the Open Market Sale Scheme of the Food Corporation of India. If the Bill becomes a law, it has to shell out additional money to procure this quantity. This will push up the cost. It is for this reason that Chief Minister Jayalalithaa, in her recent letter to Prime Minister Manmohan Singh, pointed out that the State government would have to incur a total expenditure of Rs. 1,800 crore additionally a year, the official explains.
If one were to calculate the requirements on the basis of individual entitlement, as envisaged in the Bill, another five lakh tonnes of rice will be required. In total, the State would have to meet the gap of 15 lakh tonnes a year.
For arriving at the overall additional quantity figure, it has been assumed that apart from meeting the norms envisaged in the Bill [seven kg per person per month for PHHs and three kg per person per month for GHHs], those cardholders who will be excluded from the proposed categories of PHHs and GHHs will be given 20 kg rice per month and GHHs will get one more kg per person per month. As per the State government’s policy, four kg rice is given to every adult a month.
In the Bill, there are other areas of concern to the State government. Given the fact that one half of the State’s population lives in urban areas, the stipulation of the coverage of 50 per cent of urban population means that a quarter of the State’s population – about 1.8 crore – will straightaway be ineligible to receive the Central subsidy.
In principle, the State government is against the Targeted Public Distribution System. So, it follows the Universal PDS and supplying rice free to 1.85 crore families. Moreover, a senior official who has been handling the subject of food wonders that in the absence of data on PHHs and GHHs, how the legislation can be implemented.
Another official says that as the State government gives edible oil and pulses at subsidised rates, the determination of entitlements of beneficiaries should also be made on the basis of calorific value of such condiments, not merely that of rice. This calls for a suitable correction in the quantity of rice to be supplied to the beneficiaries
Opposition for NFSB from other quarters
Uttar Pradesh Chief Minster Maywati has termed the proposed Food Security Bill as impractical and an election stunt of the Congress, the ruling party on 22.11.2011.
The district unit of the Right to Food (RTF) campaign organised a protest on 23.12.2011 against the Centre’s National Food Security Bill, 2011, which was recently introduced in the Lok Sabha. They submitted a memorandum demanding changes in the Bill.
The All India Democratic Women’s Association (AIDWA) has called upon the Parliament to reject the National Food Security Bill introduced in the Lok Sabha on 22.12.2011.
In a statement issued on 23.12.2011, the association said the Bill was a “more dangerous and rehashed version” of the current Targeted Public Distribution System, that proved to be an “utter failure” in view of the manner in which it eroded the food security of the majority of the poor, the dalits, the tribals and women, by excluding them from its ambit.
Dream Dare Win