The Hindu : For an alternative food policy

Online edition of India's National Newspaper
Tuesday, Aug 05, 2003

Opinion

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For an alternative food policy

By Brinda Karat

IT IS as yet unclear what changes the Central Government will make in its food policies following the all-party meeting held recently on the problems of the public distribution system (PDS). From all accounts, it was more an expression of views than a discussion on concrete proposals made by the Government. There is to be a follow-up meeting with Chief Ministers. If this is to be more than a cosmetic exercise geared to promises in soon-to-appear election manifestos, then the Central Government will have to seriously re-think the basic framework of its current food policies. As of now, these policies are economically unsound and morally defective, as evidenced by official statistics and the recent report of the Parliamentary Standing Committee of the Food Ministry.

An increasing number of people in India have less to eat than they did 20 years ago. Between 1983 and 1998, the rural per capita consumption of calories is estimated to have come down by as much as 300. Since then, the situation has worsened with widespread malnutrition and an increasing number of starvation deaths in different parts of the country. In the prevailing patriarchal cultural framework where women are usually the last to eat in a family, they have been particularly affected by shrinking access for the poor to affordable food grains.

Yet it is in the last three years that the Government has been holding an unprecedented amount of "excess stocks" — around two-thirds more than the official norm for buffer stocks. This has doubled the cost of storage to over Rs. 6,200 crores in 2002-2003, which is almost as much as the total subsidy to below poverty line (BPL) families. Curiously, the policy adopted by the Government to `dispose' of the stocks is not to distribute food grains to those who need it desperately for subsistence within India, but to export it or sell it in the open market at prices lower than what ration cardholders have to pay. This `trader subsidy' amounted to Rs. 5,356 crores this year. Whereas 10 million tonnes of food grains were exported mostly at prices lower than what a family below the poverty line would have to pay, the entire amount given to 14 drought affected States was just seven million tonnes last year. The value of food grain stocks unfit for human consumption plus pilfered stock — better known as the `rat subsidy' — is around Rs. 308 crores.

At the bottom of the list of beneficiaries are those the system is supposed to serve, the poor. Of the entire `food subsidy' of almost Rs. 25,000 crores (in 2002-2003), only Rs. 7,500 crores, or less than a third, has been spent on subsidies for the poor. This includes expenditure on every single scheme: food grains for BPL and Antyodaya families, mid-day meal schemes for children, food-for-work programmes, subsidised grains for the Scheduled Castes and the Scheduled Tribes hostels, and so on.

This is surely the worst record of any Government that we have had; it can be directly linked to the liberalisation policies implemented by the ruling coalition. But what are the alternatives? A central issue of the current PDS is that of `targeting' based on the identification of BPL and APL (above poverty line) families. An additional third tier called Antyodaya, of about one crore households within the six-and-a-half-crore BPL households, was created in December 2000, in accordance with the World Bank's prescription of separating the `moderately poor' from the `very poor.' While all ration cardholders can now get 35 kg of food grains, there is differential pricing for the three categories. While the Antyodaya households are eligible for rice and wheat at Rs. 3 and Rs. 2 per kg, the BPL households have to pay more than double that price for wheat and at least two-thirds more for rice. The prices of grains for the APL category are the same as, or marginally less than, the market price. For all intents and purposes, therefore, the PDS has been scrapped for the vast majority of the people.

Far from distinguishing between the rich and poor, `targeting' in a predominantly poor country like India draws a demarcation line between categories of the poor. This is on the vital issue of access to cheap food that is, in real life, required by all of them. Based on the creation, not the elimination of false categories of beneficiaries, its aim is the statistical reduction of the numbers of the poor. In reality, an increasing number of people excluded by the targeting system from access to the PDS are actually getting poorer. That these sections have been excluded from PDS categories is a fact observed by the Abhijit Sen Committee, appointed by the Government. Since then, the reports of the commissioners appointed by the Supreme Court in a public interest litigation petition filed on the problems of the PDS have exposed huge discrepancies in identification of the poor.

Some criteria used for the identification of poverty border on the farcical. For instance, if a woman owns more than three sarees, she becomes ineligible for a BPL card. Ownership of a bicycle, even if acquired through incurring debt or by cuts in other essential household expenditure including food, deprives the household of the benefit. The Government is yet to answer the serious criticism by reputed economists of the present methods of poverty measurement. It acknowledges that more people have less work, as revealed by official data on unemployment. It admits that nine out of 10 families in rural India and seven out of 10 in urban India spend Rs. 60 out of every Rs. 100 they earn on meeting their minimum food requirements. In several countries, a family is considered poor if more than a third of its income is spent on food.

The National Health Survey reveals that almost half of India's population is malnourished and 80 per cent of poor women suffer from anaemia. The food and employment situation has been worsened by the drought, which affected large parts of the country in the last few years. Yet the Government claims that poverty is coming down. In its latest sample survey, it claims that the percentage of the poor in the population has come down from 36 in 1993-1994 to 26 in 1999-2000. What is the magic that makes people less poor when they do not have work or enough to eat? The BPL has become a convenient political fig leaf behind which the poor have been derecognised and denied their basic entitlements. Official poverty measurement in India has to be radically altered if the real masses of the poor are to be identified.

If the Government is serious about dealing with the problems of the PDS, it will have to give up the targeted system and adopt a universal system so as to ensure that no section of the population is deprived of food. The logic is simple, as several economists have pointed out in India and elsewhere. Given the scale of malnutrition in India, the `error of exclusion' (of the needy from access to food) is far more serious than the `error of inclusion' (of the well-off in the PDS). The global experience of universal systems of food distribution suggests that there is a process of self-exclusion among the better off from food subsidies, for a variety of reasons. In India, it is more than likely that the top 20-30 per cent of households will automatically be excluded from a universal PDS.

The second aspect of any alternative concerns prices of rationed food grains. When the United Front Government started the targeted system in 1996, it cut food grain prices by half. The offtake of food grains from the PDS went up dramatically. Since 1998, food grain prices have been raised by 80 per cent. When the average number of workdays in agriculture for landless labour hovers between 40 and 50 per year, and there is negligible intervention by the Central Government in the provision of work-generating schemes, even the subsidised prices at current levels are not affordable. At the all-party meeting, the Prime Minister noted that over 50 per cent of the food grains meant for BPL families was not being bought. However, there was almost total offtake by the Antyodaya beneficiaries.

The average subsidy per kg of food grains today is about Rs. 7. With the use of excess stocks, the subsidy can be brought down further. Trader subsidies for export and for open market sales have to be stopped. It is possible for the Government to put in place a new system based on individual ration quotas priced at the Antyodaya level. If we assume that around 70 per cent of the population will make use of the PDS, even with an annual individual quota of 60 kg, the cost to the national exchequer will be below Rs. 30,000 crores. With only a marginal increase in Government expenditure, the focus of the subsidy will shift to the beneficiary. This will make a huge difference to the lives of the deprived and the poor. Within such a framework, the specific needs of migrant workers, widows, families headed by women, and disabled people, who suffer the most under the present system, will be better met.

(Brinda Karat is the general secretary of the All India Democratic Women's Association.)

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