India sets in motion the world's biggest food subsidy program

DELHI -- With less than a year left for national elections, the government of India is out to appease the country's poor.

Earlier this month, the government used its emergency powers to force through the Food Security Ordinance, which it says will help legally codify the right to food. This is seen as the first step to implementing a law that will allow 800 million Indians to buy food grain at incredibly low prices -- the world's biggest food subsidy program.

This effort of the government may look egalitarian, but there are remaining questions, concerns and divisions within India on the form of this proposed law, who it covers and whether the country can afford it.

The proposed law promises five kilograms of food grains –- rice, wheat and millet –- at the price of one to three rupees (two cents to five cents) per kilogram to close to 75 percent of rural and 50 percent of its urban population. In case it fails to provide subsidized food grains, the government will give cash instead. Poor children between the ages of six months to 14 years will be provided with free lunch. Pregnant and lactating mothers will be given an allowance of 1,000 rupees or $16 for six months.

In early July, the cabinet (the top executive body of the government) and the president passed this ordinance, but for this bill to become a law, it will have to be approved by the Indian Parliament when it convenes in August.

The Indian government, instead of doing a manual headcount of the target population, calculated the number of beneficiaries based on its food grain production. An expert committee convened for this purpose recommended that less than 30 per cent of India’s food grain production should be publicly procured, so as not to distort food grain prices. Based on this 30 percent (equivalent to 57 million tons of food grain), 800 million number of beneficiaries would be eligible.

Biraj Patnaik, an adviser to a commission appointed by the Supreme Court of India to oversee existing public food distribution schemes, thinks that the legislation should be extended to cover every citizen in the country.

Patnaik acknowledges that theoretically even the wealthy may be able to benefit by this scheme, but he says that it's the only way to ensure that none of the poor are left out. The expert pointed out that in the southern state of Tamil Nadu, which provides subsidized food grains to its population of 72 million, only about 80 percent of its people access it.

“We want universalization because India has had problems of getting an accurate head count of impoverished people. There is a good chance that the most vulnerable groups could be left out,” he said.

Patnaik also told SmartPlanet that the proposed food grain entitlement should be increased from 25kg to 35 kg.

India currently distributes subsidized food grains and kerosene through Fair Priced Shops under a scheme called the Public Distribution System (PDS). It also runs free daily food camps for poor students in government schools under the Midday Meal Scheme. The Midday Meal scheme is the biggest school feeding program in the world. It feeds 120 million children in over 1.26 million schools and centers across the country. While the mid-day meal scheme is seen as fairly successful, there have been numerous reports that PDS grains often find their way into the black market or are sold illegally in the open market.

Nobel Laureate Amartya Sen has been a vocal advocate of the food security bill, and he also wants it to be universal. In February, Sen pointed out three advantages of universal coverage of public services: making them a matter of citizen rights, removing corruption, and involving powerful and influential people in the running of these facilities. In May, he said that even though the bill was a moderate one, “the case for passing it is strong."

Kavita Srivastava, a member of the Right to Food campaign, a coalition of non-government organizations, said that the national food security bill is a crucial opportunity to end hunger and malnutrition in India. Srivastava noted that apart from food security, the bill should also provide nutritional security.The Rome-based Food and Agricultural Organization estimates that between 2010-12 India had 217 million people at risk of undernourishment.

“The bill only provides cereals, which does not ensure that the targeted population will get adequate nutrition. The government should also be made accountable for the nutritional needs of the people,” she said.

Srivastava also told SmartPlanet that the “bill is piecemeal in its approach” because it leaves out a huge chunk of poor people from its scope, and suggested that special entitlements of food or cash should also been given to the aged, disabled, widows, migrants and destitute. “We will continue mobilize for a more comprehensive law,” she said.

Concerns have been raised about whether the Indian government can afford to pay for this subsidized food. It is estimated that this scheme needs an addition 200 billion rupees or ($33.3 billion) to the existing one trillion rupees food subsidies currently cost.

Reetika Khera, assistant professor of economics at the Indian Institute of Technology, Delhi noted that India should be able to afford the scheme. Khera advocates reducing other subsidies like those on fuel (in 2011-2012 to the tune of 1.4 trillion rupees or $27.7 billion), which mostly benefit the middle-income groups and rich.

The food security bill is still being discussed at a policy level. Debate over its feasibility has not percolated down to the people who may benefit from it.

Bholu Ram lives in the Sangam Vihar slums of Delhi and works as a bus handyman with a monthly salary of Rs 4,000 ($66) with which he supports four others in his family. Every month he gets 600 rupees or $10 as support from the government to buy food.

Ram does not even know that the government is planning to change this policy and give him food grains instead. “I would prefer cash as it adds to my household income,” he said. “I get a little bit more flexibility in deciding what I eat.”

Photo: Ahmer Khan

This post was originally published on Smartplanet.com