CONTENTS

Sl.No Particulars Page No 3-4

Introduction Definition And Conceptual Framework Of Food Security

1. 2. 3.

Food Availability (Physical Access) Food Access (Economic Access) Food Utilization: Absorption (Nutritional Outcome)

5-25

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Food Insecurity (Definition, Types, Causes) Status And Meassurement Of Food Security Food Security And Macro Economic Policies Need For National Food Security Bill
1. 2. Indias Performance On Global Hunger Index (Ghi) India And Global Food Security Index

26-27 28-31 32-33 34-37 38-39 39-42

43 44-45

Background Of The Food Security Movement

Summary Of The National Food Security Act 2013

Food Grain Required For The Food Security Bill Cost Of The National Food Security Bill 2013 Foodgrains Vs Cash Transfer/Smart Cards Macroeconomic Impacts of NFS Act Individual States Food Security Programs (Through PDS) Case Study On The Chhattisgarh Food Security Bill, 2012 National Food Bill Vs Chhattisgarh Food Bill Criticism Of The National Food Security Bill Some Practical Suggestions To Improve The Food Security Situation Conclusion References

46-47 48-52 53-57 58-59 60-61 62-68 69 70

List of tables
Table No. 1 2 3 4 5 6 7 8 9 10 Title Physical Availability of Food Net Availability of Cereals and Pulses Per capita Availability 2012-13 Per capita Net Availability per day Per capita Consumption Expenditure on different items for 30 days duration for All India 2011-12 Trends in Percentage Consumption Expenditure since 1993-94 for rural India Trends in Percentage Consumption of Consumer Expenditure Since 1993-94 for urban India Growth in Income and Inflation All India Per Capita consumption (Kg) of Cereals and Pulses for 30 days duration for each decile class of MPCE URP 2009-10 Quantity of cereal consumed per person per month and percentage share of rice and wheat in cereal consumption in 2009-10 for major states Change in per capita cereal consumption (Kg) in rural areas in different MPCE fractile classes: All India Change in per apita cereal consumption (Kg) in different MPCE fractile classes: All India Inequality in consumption across states of India Lorenz ratios for rural and urban sectors of India Estimated Elasticities of Food Expenditure by Commodity Page No. 4 6 7 8 9 10 10 11 12 13

11 12 13 14 15 16 17 18 19 20 21 22

14 15 15 16 16

Indicators of poverty and food security-in India (2011) Poverty by castes and other sub-groups (% of the 32 population in poverty) 34 Amount of food subsidies released by Government
Performance on Global Hunger Index Food Grain Requirement Under NFS act 2013 36 44

Advantages and disadvantages of PDS and other delivery 48 mechanisms 52 National Food Bill Vs Chhattisgarh Food Bill

INTRODUCTION Human concern for food security is as old as humanity itself. The issue of food security became an international concern when world food conference in Rome (1974) adopted food security as its main topic. Declaration of this conference was that every man, woman and child have the inalienable right to be free from hunger and malnutrition in order to develop fully and maintain their physical and mental faculties. The sudden rise of commodity prices, especially the food prices worldwide has brought into focus the issue of feeding the millions. Shrinking area under cereal cultivation, over the years and the general neglect of agriculture has finally led the world into a situation where there is a shortage of food grains, threatening food crisis in several countries. Though the situation in India is not as alarming as other countries, but still ensuring food for the poor remains an issue. Food security has emerged as the top issue in 2008 and dominated the front pages. Jacques Diouf, director general of the Food and Agricultural Organization (FAO) has sounded an alert and announced the world food situation is very serious today with food riots reported from many countries like Egypt, Cameroon, Haiti, Burkina Faso, Senegal and Bangladesh: the world has just about enough cereal stocks to feed the global population for two to three months. Ensuring food security ought to be an issue of great importance for a country like India where more than one-third of the population is estimated to be absolutely poor and one-half of all children malnourished in one way or another. There have been many emerging issues in the context of food security in India in the last two decades. These are: (i) Economic liberalization in the 1990s and its impact on agriculture and food security; (ii) Establishment of WTO: particularly the Agreement on Agriculture (AoA) under it; (iii)Challenges of climate change; crisis of the three Fs, viz., food prices, fuel prices, and financial crisis; (iv) The phenomenon of hunger amidst plenty, i.e., accumulation of stocks in the early years of this decade and in 2008-09 along with high levels of poverty; (v) Introduction of targeting in the Public Distribution System (PDS) for the first time in the 1990s; (vi) Right to Food campaign for improving food security in the country and the Supreme Court Orders on mid-day meal schemes; (vii) Enacting of National Food Security Law (Right to Food); and (viii) Monitorable targets under the Eleventh and Tweleveth Five Year Plans similar to the Millennium Development Goals (MDGs) on poverty and women and child nutrition. These developments in the last two decades have provided both opportunities and challenges for food and nutrition security in the country.

Attainment of self sufficiency in food grains at the national level is one of the countrys major achievements in the post-independence period. After remaining a food deficit country for about two decades after independence, India became largely self-sufficient in food grain production at the macro level. There have hardly been any food grain imports after the mid-1970s. Food grain production in the country increased from about 50 million tons in 1950-51 to around 241 million tons in 2010-11. The growth rate of food grains has been around 2.5 per cent per annum between 1951 and 2006-07. The production of oilseeds, cotton, sugarcane, fruits, vegetables, and milk has also increased appreciably. Where does India stand in achieving global food security? India has achieved food self sufficiency 33 years ago through dramatic investments in technology, institutions, and infrastructure. Yet Indias efforts in achieving food security for all Indians remain unimpressive. India is the only Asian country other than Bangladesh and Yemen to be in the top 25 of 97 hunger affected countries in the world. The rest of the countries come from Africa. With a population approaching almost 1.2 billion today, and likely to be the most populous country on this planet by 2030 with 1.6 billion people, currently accounting for more than 17 percent of the global population and 456 million poor or 41.6 percent living on less than $1.25 a day (Chen and Ravallion 2008), ensuring food and nutrition security is a challenge for India. Food security concerns can be traced back to the experience of the Bengal Famine in 1943 during British colonial rule. With the launching of major reforms in 1991, although liberalization was already underway since 1980s, India has grown out of a period of acute shortages and heavy dependence on food aid to self sufficiency, or broadly selfreliance in food. The Indian agricultural sector has had quite a revolutionary past with the Green Revolution in the late 1960s and 1970s, White Revolution (Operation Flood) in 1970s and 1980s, and efforts are to usher in a second green revolution to reenergize the food grain sector. The Indian agri system is also undergoing a structural transformation especially the high value segment. Production pattern are diversifying toward high value commodities such as fruit and vegetables, milk, eggs, poultry, and fish in responses to changing demand patterns fuelled by a growing economy and rising income levels. While the achievements of Indian agriculture for at least three decades since the early 1970s, together with a robust economy and buoyant external sector, have helped to ensure macro level food security to a large extent, large sections of the population continue to live in poverty and hunger.

Though India, which has one of the highest areas of area under cultivation, would survive the food grain crises, the issue of making food available to the poor remains a concern.
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DEFINITION AND CONCEPTUAL FRAMEWORK OF FOOD SECURITY Concisely food security may be defined as freedom from hunger and malnutrition FAO DEFINITION:(1983) All people at all times have both physical and economic access to basic food they need. WORLD BANK DEFINITION:(1986) Access by all people at all times to enough food for an active, healthy life. Its essential elements are the availability of food and the ability to acquire it. Conceptual framework of food security and generic indicator categories are,

Natural expenditure Anthropometry Rainfall levels expenditure Morbidity Soil quality expenditure Mortality Water availability price Fertility Forest resource access Physical frequency Livestock ownership Infrastructure access Farm implement ownership Land ownership human Gender of household head Dependency ratio Education, literacy level Household size

Total area cultivated Irrigated area Area in fallow Access to and use of inputs

Total income Crop income Livestock income Wage income

Total Food Non-food Consumer Dietary intake Food

Number of cropping seasons Self employment Crop diversity income Crop yields Food production Cash crop production Producer prices

Source: Chung et al.,(1997)

5

2.1. FOOD AVAILABILITY (PHYSICAL ACCESS) Refers to the need to produce sufficient food in a way that generates income for small scale producers while not depleting the natural resource base, and to the need to get this food into markets for sale at prices that consumers can afford. Physical availability of food can be understood in various ways as following. Total Production of Food Commodities: Table No. 1 provides the production of food grains, oilseed, sugar, fruits and vegetables and milk for India.

Table No. 1: Physical Availability of Food (million tonnes) Crop Rice Wheat Coarse cereals Total cereals Pulses Total food grains Oilseeds Sugar Vegetables Fruits Milk 2011-12 105.31 94.88 42.04 242.23 17.09 259.32 29.79 24.60 156.325 76.42 127.9 2012-13 104.22 93.62 39.52 237.3618 18.00 255.36 30.72 26.00 156.445 79.40 133.7

Source:-1. RBI Hand Book on Indian Economy 2011-12. 2. Statistical Year Book, 2013, published by Ministry of Statistics and Programme Implementation, GOI, New Delhi. From the table it can be observed that production of cereal and coarse cereals has declined marginally from 2011-12 to 2012-13. But in case of Pulses, Oilseeds, Sugar, Fruits and Milk there is good jump in the production compared to previous year.

From the figure 1, it can be seen that over years, production of rice, wheat, coarse cereals and pulses has increased and reached a record level in 2011 for wheat, rice and coarse grains. Figure 1: Trend in Production of Food grains
120.00 244.78 100.00 80.00 Production 60.00 (million tonnes) 40.00 Rice Wheat 20.00 0.00 220.00 105.31104.22 196.81 95.32 94.88 93.62 176.39 170.00 84.98 85.93 74.29 129.59 120.00 69.68 108.42 82.02 53.63 55.14 70.00 50.83 36.31 42.22 34.58 20.00 20.58 23.83 11.00 -30.00 1960 1970 1980 1990 2000 2010 2011 2012 -61 -71 -81 -91 -01 -11 -12 -13 34.58 42.22 53.63 74.29 84.98 95.32 105.31104.22 11.00 23.83 36.31 55.14 69.68 85.93 94.88 93.62 23.74 30.55 29.02 32.70 31.08 43.68 42.04 39.5 12.70 11.82 10.63 14.26 11.07 18.24 17.09 18 82.02 108.42129.59176.39196.81244.78259.32 255 259.32 255 270.00

1950 -51 Rice 20.58 Wheat 6.46 Coarse Cereals 15.38 Pulses 8.41 Food grain 50.83

Source: Hand book of Indian Economy, RBI, 2011-12. Net Availability of Cereals and Pulses: Net availability is an important concept to look at availability in the domestic market for commodities after taking into account the effect of net import or export and changes in level of Government Stocks. The formula for calculating net availability is as following

Net availability of cereals=Net production +net imports-changes in government stock of cereals

It is important to consider the net availability of cereals and pulses because Cereals and Pulses are the main source of carbohydrates and protein. Hence Cereals and Pulses are the building blocks of Food Security. Government maintains the stock of Cereals as well as export & import the Cereals and Pulses based on the production in the respective year.

From the table no. 2 provided below, it can be observed that over years the net availability of Cereals had improved but for Pulses it was dwindling in India. The highest availability was observed in the year 2008-09 of 17.6 million tonnes. But over the three years in 2010-11 the net availability declined to a level of 2006-07. It can also be observed that, Government Interventions and opening up of Economy helped the Economy in increasing net availability of Cereals and Pulses by big margin in three decades from 1980-81 to 2000-01. Table No. 2: Net Availability of Cereals and Pulses ( million tonnes)

Year 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Cereal 44.3 64.6 84.0 104.8 145.7 145.6 157.4 168.8 168.9 165.9 173.7 176.5

Pulses 8.0 11.1 10.3 9.4 12.9 11.3 12.7 13.3 14.7 17.6 15.8 13.7

Source: Indian Economy, Gaurav Datt and Ashwani Mahajan, 2013.

Per Capita availability: The Production of commodities does not always tell us about the sufficiency of commoditys availability in question. Hence a good measure can be to compare the per capita availability of commodities with the minimum requirements. Table no. 3 as given below provides us with a list of per capita availability per day and per capita minimum requirement per day for various food items for India for period 2012-13. From the table it can be observed that we have surplus amount of cereals, Sugar, Vegetables and Fruits compared to minimum requirement. But for pulses we have 50 % deficit in per capita availability. In case of oil we have more availability than the requirement but half of the availability is met through the import of vegetable oil. In case of milk we are on the path of achieving self sufficiency in per capita availability and we fall marginally short of the per capita daily requirement. Table No. 3: Per capita availability, 2012-13 (in gram per day) Commodity Total cereals Pulses Total food grains Oil Sugar Vegetables Fruits Milk Per capita availability 528.70 46.78 568.79 39.73 54.79 348.47 176.86 297.81 Minimum per capita requirement# 400 80 480 30 20 300 150 300

#Source:- , Dietary Guidelines for Indians: A manual,2011, published by National Institute of Nutrition, ICMR, Hyderabad: 6.

From the figure 2, it can be observed that per capita availability of pulses over years after 196061 period is declining consistently. While for cereals and food grains, it is consistently increasing over years.

Figure 2: Per Capita Availability (in grams per day )

700.00 594.80 600.00 562.82 485.68 500.00 445.12 400.00 383.43 410.93 446.42 410.35 505.85 520.50 530.21 566.41

568.79

555.04 528.7

300.00 Cereal s Pulses 200.00

319.99

100.00

63.44

74.75

59.43 34.77

42.32

36.20

39.76

46.78

0.00 Cereals Pulses Food grain

195051 319.99 63.44 383.43

196061 410.93 74.75 485.68

197071 446.42 59.43 505.85

198081 410.35 34.77 445.12

199091 520.50 42.32 562.82

200001 530.21 36.20 566.41

201011 555.04 39.76 594.80

201213 528.7 46.78 568.79

Source: Policy brief on demand for food grains during 2020, 2009, NCAP, New Delhi.

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Per capita Net Availability: Per capita availability is calculated by dividing the total production by total population and hence it fails to reflect the effect of changes in Government stocks and net imports. Therefore we need to consider Per Capita Net Availability. Table no. 4 provides us the per capita net availability over years. From the table no. 4 it can be observed that for year 2010-11 level of net availability per person was adequate for cereals but not for pulses.

Table No.4: Per capita Net Availability (in grams per day) Year 1950-51 1960-61 1970-71 1980-81 1990-91 2010-11 Cereal 334.2 399.7 417.6 417.3 468.5 407.0 Pulses 60.7 69.0 51.2 37.5 41.6 31.6 Total Food grains 394.9 468.7 468.8 454.8 510.1 438.6

Source: Indian Economy, Gaurav Datt and Ashwani Mahajan, 2013

Over the years it can be seen that per capita net availability of cereals and pulses has declined. In 2010-11 the net per capita availability was even worse then what it was in 2006-07 in the same decade. Even in 1990-91, when India was gripped in severe Economic Crisis, then also Indians were better than in 2010-11. On comparing the net availability of Pulses per capita with the pre Green Revolution period of 1960-61 with 2010-11, it is found that net availability per capita in 2010-11 was nearly half of what was available in 1960-61. This declining trend is a serious cause of concern for policy makers.

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The policy goal to attain self sufficiency in food grains in a sustainable manner resulted in a major effort led by the national government in partnership with domestic partners and international agencies to mobilize technical, administrative and financial resources to launch the Green Revolution. While all India production of wheat grew at 3.8 percent in 1959/60, it registered a growth of 10.3 percent in 1969/70. The trends observed in Haryana (() 1.1% to 27.2%) and Punjab (3.8% to 25.1%) were spectacular. Between 1950/51 to 2008/09, production of food grains and its category (rice, wheat, coarse cereals and pulses) has increased, however the growth patterns have been volatile. Food grains comprise nearly 64 percent of the gross cropped area and account for less than 25 percent of the total output value of agriculture in 2007/08 (which in India is defined as crop, livestock and fisheries). Yet cereals (probably for food security reasons) continue to dominate the policy debate in agriculture. The high value segment accounts for 47.2 percent of the value of output of agriculture and is likely to drive the future growth in agriculture. India has emerged as the largest producer of milk (108.5 million tons in 2008/09) and the second largest producer of fruit and vegetables (197.6 million tons), production of fish has also nearly doubled since 1990/91. (Nandakumar et al., 2010) Agricultural trade in India has been growing steadily, especially during 19902009. Net agricultural exports increased from USD 2.7 billion in 1990/91 to USD 10.7 billion in 2008/09. Between 2001/02 and 2008/09, India has exported a cumulative total of 33.2 million tons of rice. Despite volatility in production patterns, there have been times when India accumulated large stocks of rice and wheat. One of the issues pertaining to the ongoing debate on the food security is the per capita availability of food. The overall trend in per capita availability of food grains, though fluctuating has been marginally negative (with per capita availability gradually coming down). (Nandakumar et al., 2010) Given the present policy imperative of seeking self sufficiency in food production, as revealed in the Five Year Plans, India will have to largely feed itself and the challenge therefore is to do it in an environmentally and financially sustainable manner. Issues related to climate change impact on agricultural production systems, depleting water reserves need to be addressed. The governments flagship programs such as RKVY (National Agricultural Development Program), National Food Security Mission (NFSM), and programs related to irrigation (Accelerated Irrigation Benefit Program (AIBP), Integrated Watershed Management Program (IWMP), Micro Irrigation Mission (MIS), etc) are geared toward providing the much needed boost to enhancing agricultural productivity and thereby higher agricultural growth. The issue of huge post harvest losses (nearly 20%30% in case of fruit and vegetables), poor processing levels arising from fragmented value chains require large investments and knowledge partnerships.

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2.2.FOOD ACCESS (ECONOMIC ACCESS) Relates to peoples ability to get economic access of the food. Economic access is typically constrained by income. If households cannot generate sufficient income to purchase the food, they lack an entitlement to that food. While the rising middle class in India is observed to be steering the changes in consumption patterns and driving up demand for quality food, there is a large section of the population dwelling below the poverty line. Although the proportion of poor people has come down from 55% in 1973/74 to 27.5% in 2004/05, the rate of decline has somewhat slowed down in the post reform period and more than 300 million people continue to live in poverty. Food accounts for more than 50 percent of the monthly per capita expenditure in India and even more for the low income groups. Hence economic access of food is an issue for the poor and vulnerable groups. However a dietary transformation is underway, with the consumption of cereals declining and that of high value food increasing. Consumption of cereals has declined over time: per capita monthly consumption of cereals has come down from nearly 15 kg in 1983 to 12 kg in 2004/05 in rural areas while that in urban area has declined from 11.3 kg to almost 10 kg. Growth alone may not be able to ensure food security of the poor and vulnerable and hence the social safety net programs and employment generating programs play an important role in improving accessibility of food by the poor and vulnerable. (Gulati,2010) The Public Distribution System (PDS) is the largest public sector managed network for distribution of essential commodities, primarily rice, wheat, sugar, and kerosene. The functioning of the PDS is a joint responsibility of both central and state governments. The PDS imposes an enormous financial burden on the public exchequer and it is quite visible from the rising food subsidy bill, (Rs 555.8 billion)(BE 2010/11). The National Rural Employment Guarantee Act (2005) aims at improving livelihood security of rural households by providing at least one hundred days of guaranteed wage employment in a financial year to every household whose adult members volunteer to undertake unskilled manual work. NREGS has helped create rural job opportunities and this has an impact on the supply of agricultural laborers. 2.2.1Per capita Consumption Expenditure on different food items for 30 days duration, All India, 2011-2012 Table no. 5 provided below gives us a summary of per capita consumption expenditure for duration of 30 days period for 2011-12. From the table it can be observed that, consumption of food and non food items as well as proportion of non food items were higher in urban areas than in rural areas. Of the food expenditure highest expenditure in rural areas was on Cereals & cereal substitute followed by milk & milk products, vegetables. In case of urban areas highest expenditure was on milk & milk products followed by cereals & cereal substitutes and vegetables. Expenditure on protein rich food was high in urban areas than in rural areas.

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Table No. 5: Per capita Consumption Expenditure on different items for 30 days duration, All India, 2011 - 2012

Item group

Amount (Rs.)

Rural

Urban

Cereal and cereal substitutes

154

175

Pulse and their products

42

54

Milk and milk products

115

184

Edible oil

53

70

Egg, fish, meat

68

96

Vegetables

95

122

Fruits

41

90

Food total

756

1121

Non food total

673

1509

Total

1430

2630

Source:-Key indicators of household consumer expenditure in India, NSSO report for 68th round survey(2011-12).

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2.2.2. Engels Law & Trends in Consumption Expenditure Table no. 6 and 7 are provided below for trends in percentage composition of consumer expenditure for rural and urban areas respectively from period 1993-94. From table no. 6 it can be observed that in rural areas, percentage of consumption expenditure on all items of food except milk had decreased over years. Total food expenditure had decreased over years but total non food expenditure had increased over years, which is in conformity with Engels law of consumption expenditure. Table No.6: Trends in Percentage Composition of Consumer Expenditure since 1993-94 for Rural India Item group Cereal Pulse and their products Milk and milk products Edible oil Egg, fish, meat Vegetables Fruits and nuts Food total Non food total 1993-94 24.2 3.8 9.5 4.4 3.3 6.0 1.7 63.2 36.8 1999-2000 22.2 3.8 8.8 3.7 3.3 6.2 1.7 59.4 40.6 20004-05 18.0 3.1 8.5 4.6 3.3 6.1 1.9 55.0 45.0 2009-10 15.6 3.7 8.6 3.7 3.5 6.2 1.6 53.6 46.4 2011-12 12.0 3.1 9.1 3.8 3.6 4.8 1.9 48.6 51.4

Source:-Key indicators of household consumer expenditure in India, NSSO report for 68th round survey (2011-12).

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Table No.7: Trends in Percentage Composition of Consumer Expenditure since 1993-94 for Urban India

Item group

1993-94

1999-2000

20004-05

2009-10

2011-12

Cereal

14.0

12.4

10.1

9.1

7.3

Pulse and their products

3.0

2.8

2.1

2.7

2.1

Milk and milk products

9.8

8.7

7.9

7.8

7.8

Edible oil

4.4

3.1

3.5

2.6

2.7

Egg, fish, meat

3.4

3.1

2.7

2.7

2.8

Vegetables

5.5

5.1

4.5

4.3

3.4

Fruits and nuts

2.7

2.4

2.2

2.1

2.3

Food total

54.7

48.1

42.5

40.7

38.5

Non food total

45.3

51.9

57.5

59.3

61.5

Source:-Key indicators of household consumer expenditure in India, NSSO report for 68th round survey (2011-12). From table no. 7 it can be observed that in urban areas, like rural areas, percentage of consumption expenditure on all items had decreased, but here milk was no exception for decreasing trend

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The estimates of growth in national income do not reveal growth of income after adjusting for growth of population. Hence Dr. Ramesh Chand of NCAP has estimated growth rate of per capita income (PCI) for rural and urban India. Since we know that Engels Law of consumption expenditure was operating and hence we should look towards the growth in income and inflation to know Is growth in income really helping the people to purchase more or is getting offset by increase in growth in rate of inflation? Following Tables No.8 gives us the growth in income and inflation for the period 1993-94 to 2004-05 & 2004-05to 2011-12. For inflation in urban areas here we mean CPI for Industrial Workers and for inflation in rural areas we mean CPI for agricultural labour and rural labourers. For pan India inflation irrespective of rural or urban area, we use WPI based inflation. For income at rural and urban level, we have Per capita income while at pan India level we have Per capita income and NNPFC. From the above table it can be inferred that growth of national income in period 1993-94 to 2004-05 was 6.85% and in the next period of 2004-05 to 2011-12 it was estimated to be 9% of trend rate of growth. But if we see the growth of inflation then for 2004-05 to 2011-12 period income growth lagged behind growth of inflation and for period 1993-94 reverse was true. Table No.8: Growth in Income & Inflation Period Category CPI Growth rate of (%) Agricultural labourers# Rural labourers# Industrial worker# 2004-05 to 2011-12 General 7.76 7.71 7.15 5.72 Food 7.78 7.8 8.05 8.55 1993-94 to 2004-05 General 3.3 3.3 6.01 5.37 Food 3.18 3.21 5.31 5.32

WPI Growth rate of (%) NNPFC* 9 6.85 Rural Per capita income* 3.46 2.27 Urban Per capita income* 11.81 7.75 Total Per capita income* 7.57 4.97 Source:* Policy brief on demand for foodgrains during 2020, 2009, Ramesh Chand, NCAP, New Delhi. # calculated based on data available from 1. http://labourbureau.nic.in/CPI%20A%20&RL%202k5-6%20Content.htm 2. http://labourbureau.nic.in/CPI%2004-05%20Contents.htm 3. RBI hand book of Indian Economy, 2011-12 4. Statistical Year Book, 2013, published by Ministry of Statistics and Programme Implementation, GOI, New Delhi.
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It can be observed that growth of PCI in rural India was far lower compared to their urban counterparts. Growth in income (PCI) in rural areas was far lower compared to growth of inflation (both General and Food) growth in rural areas for both periods. While in case of urban areas the income growth was more than growth of inflation (both General and Food) for both periods. For period 2004-05 to 2011-12 at Pan India scenario, growth of income had surpassed growth of inflation but for period 1993-94 reverse was true. Thus real income of rural people had reduced over time while for urban areas real income had increased over time. This led to disparity in economic access and consumption in rural and urban areas as well as it makes the poor more vulnerable from the view point of Food security. In 2010, the World Bank estimated Indias population to have 32.7% below the international Poverty Line of $1.25 per day purchasing power parity (PPP) and 68.7% live on less than $2.00 per day. Indias poverty line however is much less than International Poverty Line and was recently lowered to 28 (rupees) per day; depending on the currency rate exchange ` 28 is approximate $ 0.56 per day. We examine here different aspects of the present four-year phase of uninterrupted high inflation (2008-2012). Also explored here is inflations impact on the purchasing power and food security of poor people and other related issues. The Wholesale Price Index (WPI) which uses 2004- 05 as the base year (it was 100 in 2004-05), stood at 168.7 in October 2012. One rupees purchasing power in October 2012 was equal to 23 paisa in 1990-91. In other words, the rupee lost more than three-fourths of its worth during this period. On the basis of the Consumer Price Index (CPI-IW), the loss in the rupees purchasing power during this period has been much steeper: one rupees purchasing power in October 2012 was equal to 19 paisa in 1990-91.

2.2.3 Consumption of Cereals and Pulses Table no. 9 provided below gives us the per capita consumption of cereals and pulses for each decile class of MPCEURP [Monthly per capita expenditure for Uniform Reference Period]. In case of URP, a reference period of last 30 days was used for all items of consumption expenditure on which data was collected. 1st Decile class 1 is having lowest MPCE while the last one 10th has the highest MPCE. From the table, it is clear that in rural areas consumption of cereal as well as pulses was increasing from decile class 1st to 10th. For urban areas across the decile class there wasnt any pattern (either decreasing or increasing) for cereal consumption but the re was increasing pattern of consumption of pulse from 1st to 10th decile class. In case of urban areas lowest cereal consumption was observed in the 10th decile class which has highest MPCE while the same decile class had highest pulse consumption.

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Table No.9: All India Per capita Consumption (Kg) of cereals and pulses for 30 days duration for each decile class of MPCEURP, 2009-10. Decile classes Rural (Kg.) Cereals 1 2 3 4 5 6 7 8 9 10 All Classes 10.2 10.6 11.1 11.1 11.5 11.4 11.7 11.8 12.1 12.1 11.4 Pulses 0.41 0.49 0.53 0.54 0.54 0.61 0.62 0.72 0.77 0.91 0.62 Urban(Kg.) cereals 9.43 9.54 9.47 9.61 9.69 9.52 9.45 9.35 9.23 8.57 9.39 pulses 0.469 0.559 0.590 0.665 0.724 0.783 0.850 0.895 0.934 1.038 0.751

Source:-NSSO report no. 538: level and pattern of consumption expenditure In case of urban areas the last three decile classes had the cereal consumption below All India average cereal consumption. Minimum requirement of cereal per person per month is 12 kg. Except 9th and 10th decile classes of rural areas, no other class of both rural and urban areas had adequate cereal consumption. Minimum requirement of pulse per person per month is 1.8 kg and consumption of pulse was inadequate in all the decile classes of both rural and urban areas. Thus it is clearly evident from the table that lower MPCE classes are severely food insecure because there does not have existence of option of supplementing this inadequate cereal and pulse consumption with highly nutritious foods like meat and fish due to low purchasing power but the reverse holds good for decile classes with high MPCE.
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2.2.4. Quantity of cereal consumed per person per month and % share of rice and wheat in cereal consumption for major states, 2009-10 To know the pattern of consumption of cereals across states table no. 10 is provided below. Table No.10: Quantity of cereal consumed per person per month and % share of rice and wheat in cereal consumption in 2009-10, major states

Source:-NSSO report no. 538: level and pattern of consumption expenditure On looking at rural Indias scenario, it can be observed from the table that only four states consume good amount of other cereals and these states are Gujarat, Maharashtra, Rajasthan and Karnataka known for consumption of pearl millet, sorghum, pearl millet and sorghum & Ragi respectively. This condition is reflective of neglect of millets which are more nutritive than cereals. Among the major states Kerala (8.7 Kg.), Gujarat (9.2 Kg.), Punjab (9.3Kg.) and Haryana (9.8 Kg.) had less than required minimum consumption of cereals (@ 12 Kg. per person). Even though these states are developed but the per capita cereal consumption is low, which may be due to the reasons of substantial non vegetarian component in diet or vegetarian diet pattern where other food components compensate for the inadequate cereal consumption. More than minimum required level of consumption of cereal is observed in Orissa (13.9 Kg.), Chhattisgarh (12.1 Kg.), and Assam (12.9 Kg.) among major states. The All India average cereal consumption in rural areas is lower than minimum requirement at 11.3 Kg per month. For urban areas also the scenario remains more or less same for millets. The condition of consumption of millets has become worse in urban areas as evident by substantial decrease in consumption of as one move from rural areas to urban areas. Even in those four states of Gujarat, Maharashtra, Rajasthan and Karnataka where consumption of millets was high in rural areas, in urban areas it substantially reduced. Per capita consumption in urban areas was lower than rural areas for all the states of India. In case of some states like Kerala it was compensated by high calorie and high protein foods like meat and fish but this is not the case with all the states. Hence obvious inference from the table is that in urban areas nutrition levels were below rural areas.
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2.2.5. Changes in Per Capita Cereal Consumption (kg.) in different MPCE fractile classes: All-India To know the inequality in consumption we need trend in consumption across the different expenditure class which is provided by table no. 11 for rural areas. Fractile classes here are the division of MPCE into different groups where 0-10 fractile class refers to the lowest class of monthly consumption expenditure while 90-100 fractile class refers to the highest class of monthly consumption expenditure. It can be observed that over years consumption of cereals is decreasing. Consumption of cereals increases for all years as one move from lowest fractile class of MPCE to highest class of MPCE. This shows that income has positive relation with cereal consumption.

Table No. 11: Changes in Per Capita Cereal Consumption (kg.) in rural areas in different MPCE fractile classes: All-India

Source:-NSSO report no. 538: level and pattern of consumption expenditure.

Table no. 12 provides us trends in consumption of cereals across the different expenditure class for urban areas. It can be observed from the table that as we move from lowest MPCE fractile class to highest fractile class, cereal consumption is decreasing. This indicates that cereal consumption is negatively related to MPCE. Over years cereal consumption has decreased. Over years difference in consumption of different fractile class has reduced.

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Table No.12: Changes in Per Capita Cereal Consumption (kg) in urban areas in different MPCE fractile classes: All-India

Source:-NSSO report no. 538: level and pattern of consumption expenditure. 2.2.6. Inequality in Consumption across States of India In table no. 13 inequality in consumption is measured through use of Lorenz ratio which ranges from 0 to 1, 0 for perfect equality and 1 for perfect equality. Lorenz ratio is calculated separately for rural and urban areas. Table No. 13: Inequality in Consumption across States of India Rank 1 2 3 4 5 23 24 25 26 27 Rural areas Uttarakhand Kerala Arunachal Pradesh Punjab Madhya Pradesh Tripura Mizoram Meghalaya Nagaland Manipur Lorenz
MMRP

ratio

Urban areas Kerala Maharashtra Uttar Pradesh West Bengal Himachal Pradesh Jammu &Kashmir Nagaland Meghalaya Mizoram Manipur

Lorenz ratio
MMRP

0.421 0.318 0.313 0.284 0.277 0.206 0.198 0.178 0.172 0.158

0.388 0.378 0.377 0.376 0.373 0.284 0.244 0.239 0.232 0.206

Source:-NSSO report no. 538: level and pattern of consumption expenditure.

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In list of top five states for inequality in consumption in rural areas Uttarakhand stands first followed by Kerala, Arunachal Pradesh, Punjab and Madhya Pradesh. For urban areas Kerala has highest inequality in consumption followed by Maharashtra, Uttar Pradesh, West Bengal and Himachal Pradesh. At the bottom of inequality we find Manipur with least inequality both in urban as well as rural areas. In rural areas Manipur is followed by Nagaland, Meghalaya, Mizoram and Tripura while in urban areas Manipur is followed by Mizoram, Meghalaya, Nagaland and Jammu & Kashmir for increasing order of inequality. Thus it is evident that states located in hills have low inequality.

Table no. 14 provides Lorenz ratio for rural and urban areas based on different estimations based on URP (Uniform Reference Period, reference period of 30 days), MRP (Mixed Reference Period, reference period of 30 days and 365 days), MMRP (Modified Mixed Reference Period, reference period of 7 days, 30 days and 365 days). It can be observed from the table that inequality is more in urban areas than in rural areas. Table No.14: Lorenz ratios for Rural and Urban Sector of India Sector Rural Urban URP 0.291 0.381 MRP 0.276 0.371 MMRP 0.270 0.362

Source:-NSSO report no. 538: level and pattern of consumption expenditure.

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7. Estimated Elasticities of Food Expenditure by Commodity To know the effect of increase in income on consumption of different commodities, we must know the income Elasticities of demand. For this we have Income Elasticities of various commodities of staple consumption from IFPPR discussion paper provided in table no. 15.

Table No. 15: Estimated Elasticities of Food Expenditure by Commodity Commodity Rice Wheat Pulse Edible Oil Milk Vegetables Sugar Eggs Fish, Chicken and Meat Expenditure Elasticity -0.21 -0.13 -0.24 0.90 0.55 0.64 0.83 1.31 1.17

Source:-Demand and Supply of Cereals in India 2010-2025, IFPRI, Washington It was observed that income elasticity of demand for rice, wheat and pulse was negative meaning these are inferior commodities. For edible oil, sugar and milk it was positive but below 1 meaning normal goods. For Egg, fish, chicken and meat it was found to be more than one meaning that these are the luxury commodities. The big question here is for what proportion of people these luxury and normal goods are affordable.

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2.3. FOOD UTILIZATION:ABSORPTION (NUTRITIONAL OUTCOME) It is concern to an individuals ability to use food consumed for growth, nutrition and health in an environment lacking clean water, sanitation, childcare and health facilities, the ability to use food to promote health and nutrition will be impaired. An interrelated and important aspect yet to be effectively addressed is nutritional security. Despite intervention through several food based social safety net programs, some of them running over decades, malnutrition levels continue to be severe and persistent. There is an urgent need to envisage an integrated nutrition and health program for all vulnerable groups, with a focus on the role of gender and governance. Poor nutritional outcomes of infants and children arise from poor health status of women, overall poverty and lack of hygiene and proper health facilities. In India, 35.6% of women suffer from chronic energy deficiency (CED) indicated by the Body Mass Index (BMI) below 18.5 (Jose, Navaneetham 2010). Micronutrient deficiencies alone may cost India US$2.5 billion annually (World Bank 2010). What is the relation between agricultural performance and nutritional outcomes? Gulati and Shreedhar (2010) observe a negative correlation between value of agrioutput per hectare and malnutrition status across Indian states. Integrated Child Development Scheme (ICDS) and Mid Day Meal Scheme (MDMS) are two flagship public programs directed toward addressing the nutritional outcomes for women and children.

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3. FOOD INSECURITY (DEFINITION, TYPES, CAUSES) USDA definition of food insecurity: Limited or uncertain availability of nutritionally adequate and safe foods or limited, or uncertain ability to acquire acceptable foods in socially acceptable ways There are two types of food insecurity: Temporary food insecurity: It is due to sudden unpredictable shocks like drought, insect or pest attack, unemployment etc, which directly cause food insecurity. Cyclical or seasonal food insecurity: Cyclical or seasonal food insecurity is where food insecurity follows a regular cyclical pattern of inadequate access to food. The poorest people, who are chronically food insecure, are hit hardest by transitory food insecurity, which implies a temporary decline in access to food especially in case of households. Groups vulnerable to food insecurity: There are three groups vulnerable to food insecurity which are included RURAL :It consists of unskilled landless, substance farmers, low-income farmers, shepherds etc. URBAN : It consists of unemployed and self-employed people etc. GENERAL: It consists of female headed households.

CAUSES OF FOOD INSECURITY I) CHRONIC POVERTY: The most important cause of food insecurity is chronic poverty, which is continuing lack of economic opportunity either to produce adequate food or to purchase adequate food. II) LOW AGRICULTURAL PRODUCTIVITY: Agricultural productivity over the period in India is remained low compared to other developing countries. Therefore India cannot able to produce sufficient food for the their growing population and this has resulted in the food insecurity. III) HIGH RATES OF POPULATION GROWTH: Rapid population growth rate is an important cause of food insecurity which increases the number of malnourished and weakens the capacity of the country to achieve food self-sufficiency through domestic production. IV) CIVIL CONFLICTS: Civil war and racial conflicts also threaten food security by reduction of food production and disputing traditional agriculture.
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V) POOR INFRASTRUCTURE: Poor infrastructure is also a factor contributing to food insecurity. Increase in the agricultural production only will not increase food security if farm production is unable to make it to market. For example infrastructure facility like transportation facility, market facility etc. VI) ECOLOGICAL CONSTRAINT: Ecological constraints like poor soil quality, decrease in the ground water table..Etc will directly influence food security by reducing food production. VII) INAPPROPRIATE ECONOMIC POLICIES: Inappropriate policies, which result in disincentives to local production and efficient marketing, are another cause of food insecurity. VIII) LIMITED ARABLE LAND: Limitations of arable land prevent from increasing the agricultural products by expanding area under cultivation. IX) RISING SHARE OF HIGH VALUE AGRICULTURAL COMMODITIES: It is seen from the below figure the share of high value commodities increased from 1983 to 2008, the share of food grains was reduced from 31.7 to 24.9 for above mentioned years.

Source: National Accounts Statistics, Central Statistical Organization, GOI 2007&09 Figure 3: Rising share of high value agricultural commodities in India

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4. STATUS AND MEASSUREMENT OF FOOD SECURITY The status of food security of a country needs to be assessed at three levels. First is the availability of food at national level on sustainable basis, which depends on level and growth of food production, or adequate capacity to import food (if availability elsewhere is assured). Second is the physical and economic access of all households to food. Physical access requires efficient marketing, transport, and storage system to carry the food within an easy reach or at a reasonable distance from human settlements (villages). Economic access of every household to food depends on its purchasing power and prices of food at which it is available. And third is the utilization of available food by individuals, which depends on intra-family allocation of food, and maintenance of reasonable level of health of all individuals to consume and absorb required level of food. Social factors like education, primary healthcare, gender bias, and role of women in household decisions affect food security at the individual level. India tackled the hunger and food-insecurity situation through both long-term and short-term measures. The long-term strategies like maintenance of adequate growth of national food production, and employment and incomes of masses, improvement in marketing infrastructure and access to education and primary healthcare. The short-term strategy involved selective market intervention and targeted distribution of subsidized food. MACRO FOOD SECURITY (i) The most notable change has been in the increase in national production of staple food, i.e. cereals. The production of cereals went up from 44 Mt in 1951-52 to 241.56 Mt during 2010-11. The average incremental production was around 4 Mt per year continuously for two decades from 1974-75 to 1994-95. The rate of increase came down during the later decade but has picked up again during the recent years. (ii) With the increase in domestic production of staple food, the dependence on imports was almost eliminated. Indias net exports of cereals were 0.53 Mt/year during 1990-95, 2.62 Mt/year during 1995-00 and 6.43 Mt/year during 2000-05. (iii) In addition to the increase in domestic cereal production, the inter-year instability in production was reduced considerably. This happened for two reasons. First, the irrigated area under cereals expanded considerably, reducing the dependency on uncertain rainfalls. Out of the total cereal area, irrigated area increased from 23.1 per cent in 1964-65 to 50.6 per cent by 200405. And second, the share of more stable grains (wheat) increased while that of unstable grains (coarse cereals) decreased. Wheat, which had accounted for 15.2 per cent of total cereals in 1964-65, increased its share to 36.3 per cent in 2007-08. On the other hand, the share of coarse cereals declined from 34.1 per cent to 17.7 per cent during this period.

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(v) Another noteworthy feature of Indias advancements in macro food-security is that 96.5 per cent of the incremental output of cereals between 1964-65 and 2006-07 was due to improvements in the per hectare productivity (yield); and area expansion, accounting for only 3.5 per cent. The improvement in yield resulted from advancements in technology, irrigation, and the diversion of low-yielding crops to high-value produce. (Acharya., 2009)

HOUSEHOLD AND INDIVIDUAL FOOD-SECURITY (i)There has been a considerable improvement in physical access of households to food in different parts of the country, which was contributed by several factors. First, the share of rice, which is more geographically dispersed, in total staple food, continues to be quite high at around 45 per cent. Second the expansion of network of public distribution system. And third, expansion of road networks, creation of primary market yards, and building-up of storage facilities in the rural areas increased physical access of rural households to food. (ii)There has been considerable reduction in hunger or non-availability of food at the household level. As per large sample surveys of NSSO, the percentage of households not getting enough food daily even in some months declined from 16.2 % in 1983 to 1.9 % in 2004-05. (iii)Economic poverty is an important factor affecting food security at the household level. Over the years, the incidence of poverty, in both rural and urban areas, has declined considerably. The percentage of population below poverty line declined from 51 per cent in 1977-78 to 22 per cent in 2004-05. (Acharya., 2009).

Source: Planning Commission estimates from Agricultural Statistics at a Glance 2009. Figure 4: Poverty levels: 1973/74 to 2004/05

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MEASSUREMENT OF FOOD SECURITY The food security concept addresses peoples risk of not having access to the required food. These risks can be with respect to crop production, employment and income. Therefore the multiple dimensions of food insecurity suggest that that there can be no single indicator for measuring it. Access to the needed food is necessary, but not a sufficient condition for a healthy life. A number of other factors, such as the health and sanitation environment and household or public capacity to care for vulnerable members of society also come into picture. Availability of food and access to food are two essential determinants, but the first does not ensure the second; food may be available, but a household, for various reasons may not have access to it. Global, regional and national food security can be monitored in terms food demand, supply and stock and trade indicators. Food production, stock holding and trade are the primary determinants of national, regional and local availability food. Variations in availability or prices can contribute to food insecurity by causing fluctuations in food consumption. Poverty is a major determinant of chronic food insecurity. Table 16: Indicators of poverty and food security-in India (2011) Sl. State Deficit in % BPL Rural Rural No. food infrastructure literacy(%) production index(%) (mt) 1 ANDHRAPRADESH 1.16 15.92 42.80 55.33 2 ASSAM 1.29 45.01 74.76 60.92 3 BIHAR 1.55 56.93 99.20 44.42 4 CHATTISGARH 0.42 44.38 60.00 76.23 5 GUJARAT 1.74 22.18 30.80 58.53 6 HARYANA 0.33 28.02 34.90 64.00 7 HIMACHALPRADESH 0.76 30.34 11.80 74.38 8 KARNATAKA 1.11 29.88 35.80 60.00 9 KERALA 3.99 25.76 39.70 90.05 10 JARKHAND 3.70 62.00 80.00 46.26 11 MADHYAPRADESH 1.12 42.05 57.40 58.10 12 MAHARASHTRA 1.27 37.93 32.40 71.00 13 ORISSA 1.13 49.72 64.60 66.44 14 PUNJAB 0.16 11.95 37.70 65.00 15 RAJASTHAN 1.25 26.46 56.90 56.00 16 TAMILNADU 1.18 32.48 31.40 67.00 17 UTTARPRADESH 0.94 44.24 84.10 54.00 18 UTTARANCHAL 0.85 24.98 70.00 61.00 19 WESTBENGAL 1.18 40.80 89.90 64.00 Source: Kurukshetra,2011
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It is seen from the table 4 that Kerala is most food insecure by way of deficit in food production to the extent of 3.99 mt followed by Jharkhand and Gujarat to the extent of 3.70 mt and 1.74 mt respectively. It is also clear that Jharkhand (62%) is having maximum per cent BPL followed by Bihar (56.93) and Orissa (49.72). In regard to rural infrastructure index Bihar (99.20) stood at 1st place and followed by West Bengal (89.90) and Uttar Pradesh (84.10). Whereas Kerala(90.05%) stood at 1st place in rural literacy followed by Chattisgarh(76.23%) and Himachal Pradesh(74.38%).

Table 17: Poverty by castes and other sub-groups (% of the population in poverty) Year All Scheduled Castes Scheduled Tribes All Hindus Muslims Other Minorities Source: Sukhadeo, 2011 1983 46.5 59.0 63.9 47.0 51.2 30.2 1993-94 37.2 48.6 50.6 36.8 45.2 26.8 2004-05 28.0 37.1 44.7 28.0 33.0 17.9

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5. FOOD SECURITY AND MACRO ECONOMIC POLICIES MACRO ECONOMIC POLICIES In India macro-economic policies can be view from the point of fiscal policy and monetary policy. Suppose if government employs contractionary fiscal policy by way of reduction in public expenditure and increase in taxes will going to lead lower investment in agriculture which intern leads to reduction in food availability backed up by lowered purchasing power and the rerverse happens when it follows expansionary fiscal policy. Monetary policy is a central banks action to influence the availability of finance through changing cost of credit either by increasing or decreasing the interest rates by changing its key rates. Suppose if central bank increases its key rates then there will be rise in cost of credit which affects the agricultural production by making farming as expensive and the reverse happens when it decreases its key rates. Dreze and sen (1989) have made a distinction between the approaches followed in the different policies as growth mediated security and support-led security. The growth-mediated security aims to promote economic growth and take the best possible advantage of the potentialities released by greater general affluence, including not only an expansion of private incomes but also an improved basis for public support. The support-led security envisages to resort directly to wide-ranging public support in domains such as employment provision, income distribution, health care, education and social assistance in order to remove destitution without waiting for a transformation in the level of general affluence.

FOOD SUBSIDY IN INDIA Food subsidy is the difference between MSP plus handling/distribution expenses incurred by Food Corporation of India (FCI) and the issue prices of food grains under PDS. This is the amount disbursed by the government to FCI for its procurement, handling and distribution activities. In India, the food subsidy has served the multiple objectives of minimum guaranteed prices to the farmers, maintenance of buffer stocks, supply of subsidized food grains under identified schemes of the government, and occasionally open market sales for stabilizing market prices. The magnitude of food subsidies is, therefore, linked to the scale of operations for achieving the above-mentioned national objectives. The food subsidy in India which was 0.43 per cent of GDP (gross domestic product) in 1990-91 (Rs 24.5 billion), and 0.57 per cent (Rs 120.1 billion) of GDP in 2000-01, increased further due to higher commitment of distribution of subsidized food grains under different programmes. The food subsidy increased to Rs 241.8 billion, accounting for around 0.99 per cent of GDP during 2002-03 due to severe drought in the country. However, since then, the food subsidy has been
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relatively contained. During 2007-08, the food subsidy, as reflected in the Union Budget, was Rs 254 billion, accounting for 0.62 per cent of GDP. (Acharya.,2009) Table 18: Amount of food subsidies released by Government

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6. NEED FOR NATIONAL FOOD SECURITY BILL "Estimates of general undernourishment - what is sometimes called protein-energy malnutrition are nearly twice as high in India as in Sub-Saharan Africa." Amartya Sen, Nobel Prize Winner Despite the recent high economic growth and its aspirations for superpower status, India alone accounts for 54% of all malnutrition-related child deaths. The sheer scale and scope of Indias malnutrition problem positions the subcontinent as ground zero in the fight to end child deaths from acute malnutrition. According to the United Nations, malnutrition is more common in India than in sub-Saharan Africa. UNICEF estimates that in India, one in every three children is malnourished, and nearly half of all childhood deaths are attributed to malnutrition. UNICEF studies reveal maximum under-nutrition in the five Indian states: Uttar Pradesh, Madhya Pradesh, Bihar, Rajasthan, and Orissa. India is ranked 10th largest Economy of world on nominal GDP basis and 3rd largest economy on PPP basis. But 10th largest Economy of the world is facing a stark reality which is more troubling than the other problems of its economy. These are India is home to 29% of the worlds 872.9 million undernourished people (FAO). India accounts for 49% of the worlds underweight children (WHO). India is having 34% of the worlds stunted children (WHO). India has over 46% undernourished children (WHO). India is ranked 67 ways below neighboring countries like China, Nepal & Pakistan in 2011 Global Hunger Index by the IFPRI. According to the latest data on child under nutrition from 200510, India ranked second to last on child underweight out of 129 countries below Ethiopia, Niger, Nepal and Bangladesh. Only Timor-Leste had a higher rate of underweight children. 21% of Indias population is undernourished, nearly 44% of below the age of 5 children are underweight and 7% of them dying before they reach fifth birthday. Source:- http://www.who.int/countries/ind/en/

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6.1. Indias Performance on Global Hunger Index (GHI) Every year for all countries of the world, Global Hunger Index is prepared by IFPRI (International Food Policy Research Institute), Washington

Table 19: Performance on Global Hunger Index Year Indias Rank in GHI Out of total no. of countries Score Status

1990

30.6

Extremely Alarming Alarming Alarming Alarming Alarming Alarming Alarming Alarming

2007 2008 2009 2010 2011 2012 2013

94 66 65 67 67 65 63

118 88 88 84 81 79 78

25.03 23.70 23.90 24.10 24.2 22.9 21.3

Source:-1.Global Hunger Report, IFPRI,2012 and 2013. 2. http://articles.timesofindia.indiatimes.com/keyword/global-hunger-index . It ranges from 0 to 100, where 0 stands for no hunger while 100 stands for all children died before the age of five, whole population is undernourished and all the children younger than five are underweight. Higher the score, worse is the condition. Values less than 4.9 reflect "low hunger", values between 5 and 9.9 reflect "moderate hunger", values between 10 and 19.9 indicate a "serious", values between 20 and 29.9 are "alarming", and values exceeding 30 are "extremely alarming" hunger problem. From the table no. 9 provided below it can be observed

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that over years Indias status on Global Hunger Index is Alarming. Performance wise over years score is improving but still we rank among last 12 countries in the world. India has been quite successful in ensuring ample availability of food in the country, be it basic staples like rice and wheat or other food products like edible oils, pulses, fruits and vegetables, milk and milk products, eggs, meat and fish, etc. Most of these are produced within the country to meet the consumption demand, with some surplus being exported (like that of rice where India has emerged as the largest exporter in 2012), and in others reliance is on imports (like edible oils and pulses). But making food available is only one aspect of food security, though an important one. The others are economic access to food and its absorption by people for better nourishment. It is here that India has faced its biggest challenge and paradox. Despite buoyant economic growth in recent years, around one-third of Indias population, i.e 400 million people, still lives below the poverty line (in 2010) as per World Banks definition of USD 1.25/day. Using the multi-dimensional poverty index (MPI) of UNDP, India ranks at 75 among 109 countries in 2011, much worse than the other BRIC countries-indicating extent of deprivation in terms of living standards, health, and education. According to National Family Health Survey (NFHS) conducted in 2005-06, 20 per cent of Indian children under five years old were wasted (acutely malnourished) and 48 per cent were stunted (chronically malnourished). The HUNGaMA (Hunger and Malnutrition) Survey conducted by Nandi Foundation conducted across 112 rural districts of India in 2011 showed that 42 percent of children under five are underweight and 59 percent are stunted. All these estimates point to the existence of food insecurity at the microlevel in terms of either lack of economic access to food or lack of absorption of food for a healthy life.

6.2. India And The Global Food Security Index

The study was commissioned by Du Pont and done by Economist Intelligence Unit. The

Global Food Security Index considers the core issues of affordability, availability, and quality across a set of 107 countries. The index is a dynamic quantitative and qualitative scoring model, constructed from 27 unique indicators, that measures these drivers of food security across both developing and developed countries A new global food security index shows India as a protein-deficient country and ranks it at 66th position among 105 nations surveyed. While India scored 53 per cent in food availability, it suffered from deficiency in protein and vitamin A as far as quality is concerned. The calculations were made on data for all the countries available between 2000 and 2007.

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In South Asian countries, while India ranked 66th, Pakistan ranked 75th, Sri Lanka 62, Bangladesh 81, Nepal 79 and Myanmar 78. In availability of food India was ahead of other South Asian countries while in the matter of quality of food consumed, Pakistan was ahead of these countries. India ranked even below Myanmar and Sri Lanka. The food consumed was shown to exceed the world average in nutrient value in the case of Pakistan while in the case of India In the matter of consumption of non starchy foods as part of diet, Pakistan scored 52 per cent as against world average of 50.3 per cent. In the presence of nine essential amino acids in the average national diet of Pakistan, it was 47 per cent as compared with world average of 65 per cent. India on the other hand had lower ocntent of protein,,iron and Vitamin A. Presenting the details of the Index, PratibhaThaker, regional director, EIU, said, The Global Food Security Index measures levels of food security by answering a central question: how can consumers in each country access sufficient amounts of safe, high-quality and affordable food. Because of our extensive modeling approach, we believe this comprehensive tool will help leaders move from rhetoric to results. What Indians eat Food quality of the food consumed in India shows it highly deficient in protein, iron and Vitamin A, the study says. 1. Share of non starchy food in total food is 38% 2. Iron and vitamin A is 26.5%, half of world average 3. Animal iron is 0.6% vs world average of 2.8% 4. Protein in diet is 37% vs world average of 65.9%

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As is well known, FAO (2002) defines food security as: Food security [is] a situation that exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life. As per USDA5, food-insecure people are defined as those consuming less than the nutritional target of roughly 2,100 calories per day per person. India is the frontrunner with 246 million food-insecure people and accounts for close to 30% of the total food insecure people in developing countries. Growth alone, though essential, may not be sufficient at least in the short run to ensure food security for the poor and vulnerable, who spend almost 60% of their expenditure on food. These people need a safety net targeting economic access to food and its absorption. The recently introduced National Food Security Act, 2013 (NFSB), aims to address this formidable challenge. The proposed legislation marks a paradigm shift in addressing the problem of food security from the current welfare approach to a rights based approach. Besides expanding the coverage of the Targeted Public Distribution System (TPDS), the proposed legislation would confer legal rights on eligible beneficiaries to receive entitled quantities of food grains at highly subsidized prices. It will also confer legal rights on women and children and other Special Groups such as destitute, homeless, disaster and emergency affected persons and persons living in starvation, to receive meals free of charge or at an affordable price. But the central pivot of the Bill is large-scale subsidized grain distribution to almost two-thirds of the country's population of 1.2 billion. This would perhaps be the biggest ever experiment in the world to distribute subsidized grain to achieve food and nutritional security. It implies a massive procurement of food grains and a very large distribution network entailing huge financial expenditure. 7. Background of the Food Security Movement India is a signatory to the Universal Declaration of Human Rights (1948) and the International Covenant on Economic, Social, and Cultural Rights (1966), which recognized a right to adequate food. The Directive Principles of State Policy in the Constitution of India provide that it is the duty of the state to raise the level of nutrition and standard of living of its people, and improve public health. In 1996, in Chameli Singh v. State of Uttar Pradesh, the Supreme Court declared that the right to live guaranteed in any civilized society implies the right to food, among other rights. In 2001, the Peoples Union for Civil Liberties (PUCL) filed a writ petition contending that the right to food is part of the fundamental right to life provided in Article 21 of the Constitution. In the ongoing litigation in the case, the Court has issued several interim orders. In 2001, the Court ordered the implementation of eight centrally sponsored schemes as legal entitlements. These include the Public Distribution System (PDS), Antyodaya Anna Yojana (AAY), the Midday Meal Scheme, and Integrated Child Development Services (ICDS), among
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others.In 2008, the Court ordered that Below Poverty Line (BPL) families be entitled to 35 kg of foodgrains per month at subsidized prices. In October 2010, the National Advisory Council (NAC) drafted a National Food Security Bill, proposing legal entitlements for about 75 percent of the population. In January 2011, an Expert Committee set up by the Prime Minister under the chairmanship of Dr. C. Rangarajan examined the Bill and made several recommendations, including reducing the proportion of the population entitled to benefits and computerizing PDS. A draft Bill was circulated by the Ministry of Food, Consumer Affairs and Public Distribution for public feedback in September 2011. The Bill was then introduced in the Parliament in December 2011. Timeline of the Food Security Bill The National Food Security Bill has had a particularly stop-start journey on its way towards the statute book since its inception. Heres a timeline of its halting progress. July 2011 A ministerial panel gave its approval to the draft food security Bill 16 December 2011The draft Bill is presented in the Lok Sabha. January 2012 The Bill was referred to the Parliament Standing Committee on Food November 2012A parliamentary panel sends the draft back to the food ministry to incorporate changes after consulting with state governments. 19 March 2013Union Cabinet approves an amended draft before introducing it in parliament for a general debate on 22 March, 2013. 2 May, 2013 The amended food security bill was introduced in the Lok Sabha, doing away with an earlier proposal for separate categories of beneficiaries in urban and rural areas. 8 May 2013A general debate on food security law ends in the Lok Sabha without a vote as parliaments budget session concludes two days ahead of schedule due to protests by opposition parties against alleged coal mining license corruption and calls for the resignation of the Law Minister Ashwani Kumar over allegations of altering the CBI report. 3 June 2013 The ruling UPA constituents met to thrash out a strategy of how to go about the food bill. But the focus of the meeting switched to the recent Naxal attack on a Congress party convoy in Chhattisgarh and discussions about the food bill were postponed for the future 4 June 2013The Union Cabinet defers its plan of introducing the Bill through an ordinance. 13 June 2013 A Union Cabinet decided to call a special session of parliament to vote on the food security bill once they have received assurances from opposition parties that they will support the bill. The Indian National Food Security Act, 2013 (also Right to Food Act), was signed into law September 12, 2013.
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8.

Summary of the National Food Security Act 2013

1. Preliminaries The Act extends to the whole of India and shall be deemed to have come into force on the 5th day of July 2013. [NB: This is the date when the National Food Security Ordinance 2013 came into force.] 2. Entitlements Public Distribution System (PDS) Priority households are entitled to 5 kgs of foodgrains per person per month, and Antyodaya households to 35 kgs per household per month. The combined coverage of Priority and Antyodaya households (called eligible households) shall extend up to 75% of the rural population and up to 50% of the urban population. The PDS issue prices are given in Schedule I: Rs 3/2/1 per kg for rice/wheat/millets. These may be revised after three years. Childrens Entitlements For children in the age group of 6 months to 6 years: an age-appropriate meal, free of charge, through the local anganwadi. For children aged 6-14 years: one free mid-day meal every day (except on school holidays) in all government and government-aided shools, up to Class VIII. For children below six months, exclusive breastfeeding shall be promoted. For children who suffer from malnutrition, meals will be provided to them free of charge through the local anganwadi. Entitlements of Pregnant and Lactating Women Every pregnant and lactating mother is entitled to a free meal at the local anganwadi (during pregnancy and six months after child birth) as well as maternity benefits of Rs 6,000, in instalments. [Notes: (1) Meal is defined as hot cooked or pre-cooked and heated before its service meal or take home ration, as may be prescribed by the Central Government. All meals have to meet nutritional norms specified in Schedule II. (2) The entitlements of women and children are to be delivered by state governments through schemes in accordance with guidelines to be prescribed by the Central Government.] 3. Identification of Eligible Households The Act does not specify criteria for the identification of households eligible for PDS entitlements. The Central Government is to determine the state-wise coverage of the PDS (proportion of the rural/urban population). Then numbers of eligible persons will be calculated from Census population figures. The identification of eligible households is left to state
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governments, subject to the schemes guidelines for Antyodaya, and subject to guidelines to be specified by the state government for Priority households. The identification of eligible households is to be completed within 365 days. The lists of eligible households are to be placed in the public domain and displayed prominently. 4. Food Commissions The Act provides for the creation of State Food Commissions. The main function of the State Commission is to monitor the implementation of the Act, give advice to the states governments and their agencies, and inquire into violations of entitlements. State Commissions also have to hear appeals against orders of the District Grievance Redressal Officer and prepare annual reports. 5. Transparency and Grievance Redressal The Act provides for a two-tier grievance redressal structure, involving the District Grievance Redressal Officer (DGRO) and State Food Commission. State governments must also put in place an internal grievance redressal mechanism which may include call centres, help lines, etc. Transparency Provisions Mandatory transparency provisions include: (1) Placing all PDS-related records in the public domain; (2) Conducting periodic social audits of the PDS and other welfare schemes; (3) Using information and communication technology to ensure transparent recording of transactions at all levels; (4) Setting up vigilance committees at all levels to supervise all schemes under the Act. District Grievance Redressal Officers DGROS shall be appointed by state governments for each district to hear complaints and take necessary action according to norms to be prescribed by state governments. If a complainant is not satisfied, he or she may file an appeal before the State Food Commission. Penalties and Compensation The Food Commissions have powers to impose penalties. If an order of the DGRO is not complied with, the concerned authority or officer can be fined up to Rs. 5,000. The Commission can authorise any of its members to act as an adjudicating officer for this purpose.In case of non-supply of the entitled quantities of foodgrains or meals to entitled persons, such persons will be entitled to a food security allowance from the state government, as prescribed by the central government. 6. Other Provisions PDS Reforms In Chapter V, the Act states that central and state governments shall endeavour to progressively undertake various PDS reforms, including: doorstep delivery of foodgrains; end-to-end
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computerisation; leveraging aadhaar (UID) for unique identification of entitled beneficiaries; full transparency of records; preference to public institutions or bodies in licensing of fair price shops; management of fair price shops by women or their collectives; diversification of commodities distributed under the PDS; full transparency of records; and introducing schemes such as cash transfer, food coupons or other schemes to the targeted beneficiaries in order to ensure their foodgrain entitlements as prescribed by the central government. Obligations of Government and Local Authorities The main obligation of the Central Government is to provide foodgrains (or, failing that, funds) to state governments, at prices specified in Schedule I, to implement the main entitlements. The Central Government has wide-ranging powers to make Rules in consultation with the state government. The main obligation of state governments is to implement the relevant schemes, in accordance with the Central Government guidelines. State governments also have wide-ranging powers to make Rules. They are free to extend benefits and entitlements beyond what is prescribed in the Act, from their own resources. Local Authorities and Panchayati Raj Institutions are responsible for proper implementation of the Act in their respective areas, and may be given additional responsibilities by notification. 7. Schedules The Act has four schedules (these can be amended by notification). Schedule I prescribes issue prices for the PDS. Schedule II prescribes nutritional standards for midday meals, take-home rations and related entitlements. Schedule III lists various provisions for advancing food security. Schedule IV specifies a minimum foodgrain allocation for each state; in the case of states that might lose otherwise under the Act, this essentially means a continuing of existing allocations.

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9. Food Grain Required for the Food Security Bill The National Food Security Bill (NFSB) envisages distribution of about 61.2 mt of cereals, primarily rice and wheat, through the existing public distribution system (PDS) and other welfare schemes (OWS), costing the exchequer about Rs. 1,25,000 crore annually. The break up is given in the table below. Table 20: Food Grain Requirement Under NFS act 2013
Item Requirement for the Beneficiary population (67% of 1.215 Billion people @ 5 kg grain per person) Additional requirement for AAY (@ 2 kg grain for 2.5 crore household assuming 5 persons per household) Estimated requirement for OWS Wheat 22.0 Rice 26.8 Total 48.8

(Million Tonnes)

1.4

1.6

3.0

2.9

3.6

6.5

Additional requirement for protecting the average annual offtake of states Total Annual Requirement Monthly requirement (Annual Requirement / 12)

1.3

1.6

2.9

27.6 2.3

33.6 2.8

61.2 5.1

The total requirement of foodgrains after implementation of National Food Security Act (NFSA) including Other Welfare Schemes, is estimated at 61.23 million tonnes., according to the central government.

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10. Cost of the National Food Security Bill 2013 Is the Bill Sustainable? The Food Bill is a grand scheme and will cost around Rs 1,30,000 crore annually which is about 1.1% of GDP. For example, the economic cost of rice to the government is about 20 rupees per kg. This includes the purchase price from the farmers, the cost of transportation (which is about 30%) and storage and then distributing it. Under the bill, it will be sold to ration card holders at between Rs 1 and 3 per kilogram, which is a subsidy of 18 rupees per kilogram. About 62 million tonnes of food grain will be needed under the food bill. Even if the grain quantity remains fixed each year, the subsidy cost will keep increasing annually because the rising input cost to the farmers will always keep the pressure to raise the minimum support price (MSP). This will increase in effective cost of the grain to the government; the selling price at the TPDS is unlikely to change. It is also likely that because of the rising population, the food grain quantity will also increase. Therefore, given the rising costs of the scheme in coming years, its sustainability is questioned by many. But here is why the above fear is highly exaggerated: The cost of the bill to the government is likely to be Rs 1.25 1.30 lakh crore each year, although various experts offer bigger amounts. This inspires awe in a segment of the business community which wants the government to reduce its expenses. But this entire amount is not a new expenditure for the government. India is already spending close to Rs 1.16 lakh crore on schemes that are listed as entitlements under the FSB, for instance, food subsidy (Rs 85,000 crore), midday meal (Rs 13,215 crore), Integrated Child Development Scheme (Rs 17,700 crore) and maternity entitlements (Rs 450 crore). Thus, the additional expenditure is around Rs 8,635 crore, or say Rs 10,000 which is hardly significant in comparison with the GDP numbers. In reality, a much bigger amount is wasted annually by way of rotting food grains stocked under unsafe conditions in the makeshift godowns of the FCI. Are Food Subsidies a Crippling Burden on Exchequer? The corporate lobby and the diehard free market devotees see the Bill as an unwanted burden on the state exchequer (Food Security Bill will torpedo Budget, Business Line, March 21, 2013). They would like the government to focus on economic reforms rather than giving doles. The corporate world certainly needs some reminder. The government doled out almost Rs 6.22 lakh crore as tax revenue subsidy in the financial year 2011-12? This is registered as taxes foregone, and accounts for 65% of the governments total revenue. Last year, the figure was Rs 5.36 lakh crore. A total of Rs 23 lakh crore in six years has been stashed away in the corporate worlds coffers. No one has questioned this.
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Meanwhile, the agriculture subsidy has been converted into direct loans to farmers; petrol has been handed over to the market; public expenditure on basic services like health, education and access to clean water is dropping. Why the hue and cry about the Food Bill expenditure? We contribute 40% to the worlds overall maternal, neo-natal, infant and child deaths. We have half the worlds undernourished children. Fifty-four percent of our women suffer from anemia. We have to end this national variety of colonialism where corporations rule over our farmers and traders have converted educational institutions and health services into profitable shops and keep people deprived of the very basic services in the name of growth. The present levels of malnutrition result in a 2-3% decline in GDP. It causes delays in education, triggers learning disabilities, affects the overall physical and cognitive development of children at an early age. We need to understand that underfed people are unable to contribute, even if provided with opportunities, because of lack of capability. We must therefore build an environment of empowerment with nutritional security. The 62 million tonne and Rs 1,30,000 crore food bill will serve another useful purpose: it will restore the dignity of the people of India. It will help feed the 80 crore citizens who constantly in insecurity and have to think before they eat. The expenditure on their food amounts to only a subsidy of Rs 1,188 per person per year, or Rs 3.25 a day. We have about 17 crore children under the age of six, of which 45% are malnourished. But we barely spend Rs 1.62 per child per day on their growth and nutrition. The Food Bill is being criticized because it gives precedence to peoples wellbeing over creating a tiny island of opulence for a handful of people. India needs to fix its priorities.

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11. Foodgrains Vs Cash Transfer/Smart Cards Debates on the Bill have largely revolved around two main issues: the identification of beneficiaries and the financial implications of the Bill. However, some segments also debated the alternate methods of delivering food security: cash transfer and food coupons in place of food grain distribution, although most people generally dont favor these alternative options. The Standing Committee on Food, Consumer Affairs and Public Distribution also recommended that the cash transfers should not be introduced at this time; instead, adequate banking infrastructure needs to be set up before introducing. The Central Government has initiated 2 step reforms: It involves a computerization project, which envisages tracking of food grain bags using barcoding right from the FCI godowns up to the Fair Price Shops in stage 1 and beneficiary related transactions in stage 2. As an alternative to the existing PDS we may switch over to the use of smart cards or food coupons which can be used to buy food from any PDS store. In fact with the biometric identification system (Aadhar card), people will have the freedom to migrate to any part of the country without the fear of losing their food grain. Of course, this presupposes country wide networking of the PDS shops. Since under this system the poor will be paying the stores the same price for food grains as the others the shopkeeper, including PDS stores, will have no incentive in selling adulterated grain to the poor. This will ultimately lead to a system that is free from leakages and adulteration of food grains and will encourage competition for quality service among the PDS stores. The Food Security Bill also allows for cash transfers and food coupons in lieu of grains as mechanisms to deliver food security. Currently the PDS suffers from high leakages (as high as 40%) cash transfers and food coupons also their drawbacks: they are known to expose recipients to volatility and price inflation. Each method of delivery would have its own implications, financial and otherwise. The table below compares these methods of delivery.

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Table 21: Advantages and disadvantages of PDS and other delivery mechanisms Mechanism Advantages Disadvantages PDS Insulates the beneficiaries from inflation and price volatility The food grain entitlement can only be used to prepare food Fair price shops have low margins; thus not very viable Often sub-standard quality of food grains, Adulteration of foodgrain

Well-developed network of Large leakages and diversions FPS ensures access to food of subsidized food grain grain even in remote areas Cash Transfer Cash in the hands of poor Requires extensive banking expands their choices and network relieves financial constraints to some extent Potential for fully electronic Cash can be used to buy non transfer food items

Cash transfer programs May expose recipients to price involve low administrative volatility and inflation costs because it does not need procurement, storage and distribution facilities Smart Cards/ Food Coupons The household has freedom to Needs computerization and go to any PDS shop. It might networking of PDS shops promote quality of grains as well as service

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12. Macroeconomic Impacts of NFS Act Though the objective of NFS act is well appreciated, the impact of its underpinning strategy on the economy may be adverse. 1 Increase in Subsidies - Subsidies vs Investments NFSB would require huge funds and thereby huge subsidies by the Central Government. The source for these subsidies could be increasing fiscal deficit (fuelling inflation), additional revenue generation or shift of funds from investment to subsidies. Green Revolution was not an outcome of subsidies but rather of enhanced investments in Technology, Institutions (R&D), communication and physical infrastructure. Public investment in agriculture as a percentage of agri-GDP has increased from 1.8 percent in 2000-01 to 3.4 percent in 2010-11. But input subsidies, as a percentage of agri-GDP, have increased at a faster pace than public investment, from 8.9 percent in 2000-01 to 17.2 percent in 2009-10. Together, only food and fertilizer subsidies, as a ratio of GDP (agri), accounted for 12.4 percent in 2010-11- up from 6.0 percent in 2000-01. In comparison, public investment in agriculture is only around one-fourth of this which is reflective of the imbalance between use of subsidies & investments as policy instruments for agricultural growth (Fig 5). It may be worth noting here that during the last three Five Year Plans, agricultural sector has failed to achieve the modest targeted growth of 4 percent. Given fiscal constraints, there is always a trade-off between allocating money through subsidies and increasing investments. Ample research shows that investment option is always preferable to subsidies to sustain long-term growth in agricultural production and also to reduce poverty faster. So the focus of public expenditure for agriculture needs to shift towards investments to boost productivity rather than subsidies. In contrast, NFSB is likely to shift the nature of resource allocation more towards subsidies rather than investments. This will be retrogressive from long term agri-growth and sustainable food security point of view. Figure 5 GCF (Public) in Agriculture & Input Subsidies to Agriculture

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2. Forcible low-level equilibrium trap for Indian agriculture The structural composition of agriculture has been evolving over the years. Within the value of total output of agriculture & allied sector, the share of cereals has declined from 27.3% in TE 1990-91 to 21.0% in TE 2010-11 while the share of livestock has increased from 23.7% to 29% in the same period. Currently, cereals constitute only about one fifths of the total value of output from agriculture and allied sector which is less than the contribution from the livestock sector and almost equal to the fruits & vegetables. The share of fruits & vegetables and livestock have shown an increasing trend in recent years implying that they have been growing at a much faster rate than the traditional crops sector. Given the rising share of high value commodities in the total value of agricultural output and their growth potential, this segment is likely to drive agricultural growth in the years to come. Being highly perishable in nature, this segment requires faster and better linkages between farms and firms in the logistics, processing and organized retailing. Faster growth in per capita incomes and urbanization are triggering shift towards high value commodities like fruits, vegetables, fats and oils, and animal products such as dairy, poultry and eggs. Share of expenditure on cereals in total food expenditure has declined from 41% in 1987-88 to 29.1% in 2009-10 in rural areas and from 26.5% in 1987-88 to 22.4% in 2009-10 in urban areas. The Bill's focus on rice and wheat goes against the trend for many Indians who are gradually diversifying their diet to protein-rich foods such as dairy, eggs and poultry, as well as fruit and vegetables. There is a need for a more nuanced food security strategy which is not obsessed with macro-level foodgrain availability. But at the policy level, the Government is still focused on foodgrains and with NFSB is clearly reversing the movement of Indian agriculture from high value items to foodgrains. This will trap the Indian agricultural sector in a low level equilibrium trap as returns are generally higher in high value agriculture. But a faster movement towards high value agriculture needs large investments in infrastructure and risk mitigating strategies. The NFSB is likely to slow down this natural process, and at places even reverse this trend. 3 Restricted Private initiative in Agriculture In pursuit of the food sufficiency regime a regulatory framework has been created with massive government intervention in terms of policing powers under the APMC Act and Essential Commodities Act, interstate movement restrictions, regular but unpredictable export bans on foodgrains, banning of forwards trading on commodity exchanges etc. This will be even further tightened to enable government to carry out its procurement functions now. A combination of the quantum of public procurement and a stringent regulatory framework would drive the private sector out of the food grains sector.
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64. Let us illustrate this with an example of Punjab. Punjab experienced an increasing rate of growth for about 25 years, but from 1997-98, Punjab has experienced a deceleration in its rate of growth. Cultivation of high-yielding varieties of paddy, particularly under assured tube well irrigation has resulted in an alarming depletion of the underground water table, decline in soil fertility, an increased incidence of insect pests, weeds, and increased resistance towards use of chemical inputs, and decelerating rates of growth in yields. Further, almost complete takeover by state of the foodgrain markets caused much of the private sector to withdraw and there was not much modernization and scaling up of its agro processing (mills etc) and storage infrastructure. Punjab rice and wheat may not be even globally competitive without large subsidies through free power and water. It is surviving basically on government support and without much value addition. As a result, Punjabs agri-GDP growth during the decade of 2000 remained pitiably low at less than 2 percent. Gujarat, in contrast, has focused on commercial crops and diversified into non-farm activities like milk, along with a strong focus on investments in value adding infrastructure. This holds the key to the stupendous growth in agriculture of more than 9% per annum witnessed during the decade of 2000. Gujarat remained almost free from any large scale government intervention and regulation, and leveraged its private entrepreneurs to drive growth. Through incentives to attract private sector by providing a favorable investment climate, several non-farm income generating employment opportunities have been created in rural areas supplementing rural income. 4 State takeover of food grain economy would cripple competition 65. Since 2006-07, the procurement levels for rice and wheat have increased manifold with more than one-third of the total production being procured for Central Pool (Fig 6). This will be even more pronounced if procurement is taken as a share of marketed surplus -more than 40 percent for rice and more than 50 percent for wheat. Currently, piling stocks of wheat with FCI has led to an artificial shortage of wheat in the market in the face of a bumper crop. Wheat prices have gone up in domestic markets by almost 20 percent in the last three months alone, because of these huge stocks with the government that has left very little surplus in markets. Apart from imposing a huge additional cost to procure, store, transport and distribute grain, increasing public procurement strangulates the domestic grain market.

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Figure 6: Procurement of Rice & Wheat for Central Pool

Source: DFPD 5. Inflationary pressures on food prices 66. India has recently been experiencing high food inflation in the face of record production of food grains, robust buffer stocks and growing resilience of agriculture to monsoon uncertainties. A distinct feature of recent food price inflation has been the sustained price pressure in protein rich items (pulses, milk, fish, meat and eggs). According to RBI, the inflationary impact of NFSB will depend on the extent to which it will raise demand for food grains relative to the normal increase in supply. This will create demand pressures, which will inevitably spillover to market prices of food grains. Furthermore, the higher food subsidy burden on the budget will raise the fiscal deficit, exacerbating macro level inflationary pressures. Additionally, the need to procure large amounts would need a consistent rise in MSP of the foodgrains to incentivize their production further fuelling the inflationary pressures. This will create further macroeconomic imbalances. NFSB focus on cereals is likely to induce severe imbalance in the production of oilseeds and pulses, resulting in substantial imports in the coming years. India imported a whopping US$ 9.7 billion (Rs 46,242 crore) worth of edible oils in 2011-12 a 47.5 percent jump from last year and pulses worth US$ 1.8 billion (Rs 8767 crore) during 2011-12- an increase of 16.4 percent as compared to last year (Fig 7). Assured procurement gives an incentive for farmers to produce cereals rather than diversify the production-basket. Import intensity will intensify at higher prices creating inflationary pressures. Vegetable production too may be affected - pushing food inflation further.

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Figure 7: Bulging Stocks of Indias Foodgrains & Rising Imports of Edible Oils

Source: FCI, Department of Commerce Note: Stocks with FCI are as on 1st of July of each year 6.Impact on Absorption Pillar of food security NFSB also aims at improving the nutritional status of the population especially of women and children. But studies have shown that the challenge of improving absorption lies in linking nutrition with health, education and agriculture interventions30. Access to sanitation facilities and womens literacy in particular are found to be strong factors affecting malnutrition. The Indian government has recognized malnutrition as a serious problem in every plan document. However, a pressing issue is the absence of a comprehensive and functioning National Nutrition Strategy. Direct nutrition intervention through the Special Nutrition Programme under the Integrated Child Development Scheme (ICDS; now called the Supplementary Nutrition Programme) and the Mid Day Meals Scheme (MDMS) are currently in force to address the nutritional needs of children and women and would continue to be the channels through NFSB. Though no deeper analysis of these schemes has been done for the purpose of this paper, yet it needs to be recognised that malnutrition is a multi-dimensional problem and needs a multi-pronged strategy. Womens education, access to clean drinking water, availability of hygeinic sanitation facilities are the prime prerequisites for improved nutrition. If we include the costs to create such rural and urban infrastructure, enormous financial expenditures and effective strategies are required.

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13. Individual States Food Security Programs (through PDS) Indian states have been running their own food security programs for the weaker sections through the public distribution system. They have gone about identifying the beneficiaries in their own ways and their BPL counts are almost always greater than Centers figures. The southern state of Tamil Nadu has perhaps the best run system in the country. Most recently, Chhattisgarh has emerged as a model state in terms of running the food program most efficiently. It achieved it by creating transparency and accountability through intelligent use of computerization along with the Internet and communication technologies. There is a strong case for such subsidized food programs through the PDS. 60 percent of thepoverty gap has been wiped out in Tamil Nadu; the figure for Chhattisgarh is 40 percent and nearly 20 percent at the all-India level. States initiatives to improve the PDS delivery system Comprehensive recommendations on the reform of the PDS are available from various committees. Several states have undertaken their own PDS reforms. They have started to use technology to improve their PDS delivery systems. Chhattisgarh is a notable example which has taken effective steps to turn around the PDS system with the help of IT and communication technologies and community involvement. Other initiatives by state governments use of smart cards for beneficiaries in an experimental way in Haryana and Chandigarh, use of Global Positioning System in Tamil Nadu, Chhattisgarh and Delhi, bar coded bags in Gujarat and SMS alerts on grain availability in UP and MP. The World Food Program (WFP) has signed an MoU with the Odisha government to roll out an efficient system of TPDS in four districts. It is also in discussion with the Jharkhand government for initiating a pilot project. Clearly, many states with a substantial percentage of the population in trying to devise leak proof systems of delivery for the BPL people. Chhattisgarh has already shown that it can be done. The Supreme Court has also ordered introducing ePDS across the country. The main components of ePDS are integrated weight management system, Management Information System (MIS), inventory management, GPS-based fleet tracking for grain transportation, SMS-based information dissemination and public grievance redressal forum. 1. Chhattisgarh In December 2012, Chhattisgarh became the first state to have its own food security Act, making food entitlement a right and depriving anyone of that an offense. If PDS grains, for instance, are being diverted, the officials involved face penal provisions. The Act also seeks to empower
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women by counting the eldest woman of a household as its head in matters related to ration cards. The Act provides for various subsidies over and above those granted by the Centre. In this year's budget, the government earmarked Rs 2,000 crore for implementing the Act. Some get rice at Rs 1 per kg, while the destitute and disaster-affected persons get it free. The law also includes protein security by providing chana at Rs 5 per kg and pulses at Rs 10 per kg. It defines a new category, "particularly vulnerable social groups", which includes households headed by terminally ill persons, widows or single women, physically challenged persons, all households headed by a person aged 60 or above with no assured means of subsistence or societal support, and persons freed from bonded labor. 2. Bihar The fund starved Bihar caters to 1.12 crore BPL families (of estimated 1.37 crore) while the Center recognizes only 65.23 lakhs. It has created a fund of Rs 580 crore, of which the state spends Rs 120 crore every year on grains distributed to the "unrecognized" BPL families. The usual allotment of 35 kg grains a month, meant for all BPL families, is restricted in Bihar to the 25 lakh very poor families (Antyodaya); the other BPL families get 25 kg (10 kg wheat and 15 kg rice at centrally subsidized rates). It meets the shortfall by buying grains from the FCI. The Bihar CM has made it clear that the state cant afford even part of the burden of the food security law. On the positive note, after the Supreme Court order for implementing ePDS across the country, the Bihar government has taken initiatives in some districts to computerize information about dealers and beneficiaries. Two districts, Munger and Jehanabad, have achieved good results andare way ahead of others in utilizing information technology for ensuring transparency. Some other districts like Gaya and Buxar have also tried to solve the transparency problems of PDS. 3. Gujarat Gujarat too covers almost twice as many BPL families as the Centre recognizes 24.3 lakh against 13.1 lakh. The government diverts part of the APL supplies to BPL families. 4. Punjab In 2007, the state government identified 9 lakh families whose annual income was below Rs 30,000, for its atta-dal scheme. Today there are 15.4 lakh beneficiaries. Initially entitled to 35 kg wheat at Rs 4 a kg, and 4 kg dal at Rs 20 a kg, they now get 25 kg and 2.5 kg respectively. It is for the standard family, considered to consist of five members; for smaller families, the entitlement is per member. It is also planning to include dal in the PDS supply.
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5. Rajasthan Rajasthan's latest budget provides for wheat at Re 1 per kg for all BPL and Antyodaya families, costing the state Rs 500 crore a year. This is besides sugar at Rs 10. APL families get atta at Rs 5and various other subsidies, costing the state Rs 350 crore. The budget exempts various spicesfrom taxes, besides including a special package of Rs 200 crore for the economically backward. 6. West Bengal In 2000, the state government started distributing rice at Rs 2 per kg to BPL families. Now Mamata Banerjee's government added 40 lakh more people. It also introduced 2 kg rice and 750g wheat, both free, every week for each of the 1,391 members of the Toto tribe. West Bengal spends Rs 625 crore a year on subsidizing PDS food. "The food security bill will mean spending Rs 5,400 crore annually, which we cannot afford," according to the state food minister. 7. Assam In Assam 20 lakh BPL families get 28 kg rice at Rs 5.65 / kg. In 2010, it launched a scheme to provide 20 kg rice at the same rate every month to roughly 20 lakh families in the "lower strata of APL" category. Another scheme allows village cooperatives to take bank loans at 12 per cent to lift PDS items, and 5 per cent of it is borne by the government. 8. Himachal Pradesh The state provides subsidized food to a total 15.58 lakh ration card holders. Out of these, 10.44 lakh are APL, 3.17 lakh BPL and 1.97 lakh fall under the Antodaya Anna Yojana (AAY). The 3.17 Lakh BPL families get 35 kgs of food grains per family per month: 20 kg wheat at the rate of Rs. 5.25 per kg and 15 kg of rice @ Rs. 6.85 per kg per family. Under the Antodaya Anna Yojna the poorest of the poor 1.97 lakh families are given 20 kg of wheat @ Rs. 2 and 15 kg of rice @ Rs. 3 per kg per family. In the tribal areas, wheat, wheat flour and rice are distributed: 8 kg per person in all categories. Ration card holders are also entitled for pulses, mustard oil and iodized salt at subsidized rates. 9. Orissa In February 2013, Orissa started a Rs 1-per-kg rice scheme under which 48 lakh BPL families get 25 kg every month. The rice scheme, an improvement on the Rs 2-per-kg and 35 kg per family scheme, will cost the exchequer Rs 1,312.50 crore a year. The CAG report criticized the new scheme on the ground that it reduced the quantum of rice to a wider population compared with 35 Kg per family as offered in the previous scheme.

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10. Delhi The 4.53 lakh BPL card holders get each month 25 Kg wheat @ Rs 4.65, 10 kg rice @ Rs 6.15, and 1.17 kg sugar per member @ Rs 13.50. The card holders under the Annapurna scheme, get 10 kg wheat per month free of cost. Those under the Antyodaya Anna Yojana get 25 kg wheat at a price of Rs. 2 per kg per month and 10 kg rice at a rate of Rs. 3 per kg. Apart from the 4.53 lakh cards (benefiting a population of around 20 lakhs), there are an additional 49 thousand Above Poverty Line (APL) card holders who live in slum clusters and can take benefit from the scheme of the government. 11. Madhya Pradesh Madhya Pradesh recently launched a scheme, Mukhyamantri Annapurna Yojana, which it described as "a step ahead'' of the central bill. MP is one of several state that add their own subsidies to make PDS food material available at rates cheaper than those fixed by the Centre. It sells wheat at Rs 1 a kg and rice at Rs 2 a kg to BPL and Antyoadaya families, who get respectively 35 kg and 20 kg foodgrains every month. Since April 2008, the state had already been subsidizing foodgrains at an annual cost of Rs 440 crore; the new scheme increases the subsidy burden by Rs 420 crore. The target population is 3.5 crore, nearly half the state's. SOUTHERN STATES In the south, it is mostly about rice, either free or very cheap 12. Tamil Nadu In Tamil Nadu, it is all about rice. The DMK had come to power in 1967 largely on the slogan "one padi (a local measure) rice for Re 1". Then in 2006, the DMK government re-subsidized PDS rice to Rs 2 a kilo for those below the poverty line and to Rs 3.50 for others. It slashed the BPL rate further to Re 1 in 2008, before Jayalalithaa's government introduced the universal, free scheme. Tamil Nadu provides 20 kg rice free every month to each of its 1.85 crore PDS beneficiaries, a universal scheme it says is unmatched anywhere else. Tamil Nadu has long been running and improving on its own food security schemes. The food subsidy has gone up from Rs 4,000 crore in 2011, to Rs 4,500 last year, to Rs 4,900 crore expected this year. Since 2007, the state government has also been subsidizing tur dal, black gram, fortified wheat flour and fortified palm oil, besides packets containing 10 spices and condiments. The last scheme will continue till March 2014. Ready to eat meals, is another feature of TN served in the Amma canteens: which offer an idli for Re 1, curd rice for Rs 3, and sambar/lemon/curry leaves rice for Rs 5. It was a government initiative that was first undertaken through the Chennai Corporation, it was soon expanded across the state's municipal corporations. Chapatis are likely to be added in the menu next. The state also has a price stabilization fund to procure and distribute essential commodities at cost price in times of crisis. This year, the fund was doubled from Rs 50 crore to Rs 100 crore. Most recently, the state government also launched fresh vegetable outlets in Chennai to sell vegetables at minimal prices and mineral water scheme to sell water bottles at Rs 10.
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13. Karnataka Karnataka has planned to distribute from July rice at Re 1 per kg and up to 30 kg per family with a BPL card. The scheme targets 98.17 lakh people and will cost the state Rs 460 crore a year. The state would require 2.40 lakh tonnes rice and is hoping the Center will provide 1.70 lakh tonnes of this; it will procure the rest. 14. Andhra Pradesh Andhra Pradesh first introduced a Rs 2-per-kg rice scheme in 1985, after chief minister N T Rama Rao resolved no family in the state would ever go hungry. It was reintroduced by the late Y S Rajasekhara Reddy in 2008, covering a wider population. In 2011, the state government introduced good quality rice under PDS at Rs 1 per kg for BPL families. The scheme benefits 2.70 crore families. Antyodaya families get 35 kg per family, while other BPL families get four kg per person subject to maximum of 20 kg. The state spends Rs 2,600 crore as subsidy for rice at Rs 1. Some 3.24 lakh tonnes are provided. The government also subsidizes red gram dal at Rs 50 per kg, palm oil at Rs 40 per litre, kerosene at Rs 15 per litre, sugar at Rs 13.50 per kg, and wheat at Rs 7 per kg. Earlier this year, as a Telugu New Year's gift, a "Amma Hastham" scheme was launched, under which the government provides nine essential commodities four more than were being provided earlier in a packet through ration shops every month for Rs 185, against an actual cost of Rs 292. Similar to a Tamil Nadu package, it includes 1 kg toor dal, 1 litre palm oil, 1 kg whole meal atta, 1 kg wheat, kg sugar, 1 kg salt, kg chilli powder, kg tamarind and 100 gm turmeric powder. 15. Kerala Kerala has a PDS coverage of 79 lakh, of which 14 lakh are in the BPL category. The state requires 1.35 lakh tonnes grains a month and its annual food subsidy bill is Rs 750 crore. The allocation is 10 kg rice at Rs 8.90 / kg and 3 kg wheat at Rs 6.70 / kg for APL families, 25 kg rice at Rs 1 and 8 kg wheat at Rs 2 for BPL families, and 35 kg rice at Rs 1 for Antyodaya families. Besides, an Annapoorna scheme for the destitute aged over 65 gives each such beneficiary 10 kg rice free. And families counted as BPL but without cards get 19 kg rice at Rs 6.20 and 7 kg rice at Rs 4.70. Kerala has 32 lakh BPL families as per a survey in 2009. The state government would welcome the provision in the proposed central bill that every person is entitled to 5 kg food grains at subsidized rate.

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14. The Chhattisgarh Food Security Bill, 2012 Chhattisgarh has taken a lead in the country to enact its own Food Security Act 2012 (CFSA) in December 2012. It is seen as an extension of the PDS and is widely regarded as a model for other states by the Centre and the Supreme Court. The Act pledges to ensure universal coverage of the state population enabling around 42 lakh families to access quality subsidized food grains. Nearly 90% of the provisions incorporated in the Act were already covered under the PDS. The new act will only make the acclaimed PDS more comprehensive and will put an annual burden of Rs. 2311 crore to the state exchequer. The entitlements will be given on the basis of per household and not on per person. The entitlements are not restricted to food-grains and there would be provision for iodized salt, pulses, black gram. The act does not cover people who are income tax payers, own over 4 hectares of irrigated or 8 hectares of non-irrigated land in non-scheduled areas and those who are liable to pay property tax in urban areas. Antyodaya and priority (BPL) households will get 35 kg of grain at Rs 1 and 2 per kg, respectively. They will also be entitled to 2 kg iodized salt each month. The general (APL) househols will get 15 kg grain per month at a rate of less than 50 per cent of the minimum support price of the grain. Taking a cue from States such as Tamil Nadu, Andhra and Himachal Pradesh, the CFSA guarantees 2 kg of pulses at Rs 5-10/kg, an essential source of protein. The provides the priority households monthly PDS entitlement of 35 kg rice, wheat flour, pulses, gram and iodized salt at subsidized prices.Giving a push to further empowerment of women, the ration cards would be issued in the name of the eldest woman in a family. The local bodies would be responsible for implementation of the Act. The Act contains provisions of internal grievance redressal mechanism, publishing of all records in the public domain and social audit are also incorporated. As opposed to the Proposed Central Food Act, the Chhattisgarh Act does not have any arbitrary percentage limit of beneficiaries. It only excludes those who are clearly not poor. Thus, the CG Act covers around 90 percent of the states population. Highlights of the CG Food Act: 1. The Act provides for not just the food grains (wheat, rice etc.) but also gram, iodized salt. 2. It also covers school midday meals and take home ration for pregnant women and lactating mothers and children under three to provide additional nutrition through the anganwadis. 3. Free meals for the destitute and homeless. 4. Ration cards would be issued in the name of the eldest woman in a family. (Women empowerment)
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5. Panchayats and Municipalities will be responsible for implementation of the Act. 6. Entitlements will be given on the basis of per household and not on per person. 7. Going beyond the Centres definition of Antyodaya, the CG Government has widened the definition of Antyodaya households to include all families of vulnerable social groups including tribal groups, widows or single women, terminally ill persons, physically challenged persons, elderly-headed households with no assured means of subsistence and persons freed from bonded labor. 8. To prevent such leakage and corruption, the Act provides for a. Computerization of records and publication of all beneficiaries and benefits given to them. b. Gram Panchayats will be allowed to run ration outlets. c. Officials to be punished for non-compliance, under Essential commodities act. d. Vigilance committees e. Social audits by the Gram Sabha, etc Reasons Behind Success of the Chhattisgarh Food Bill Chhattisgarh is a good example of transforming a non-functional PDS into a functioning one with the help of technology and community involvement. The first step was to computerize the whole process to check leakages and diversions. It improved internal management and injected transparency. The state solved the widespread problem of fake ration cards by creating a centralized database which helped eliminate 22.5 lakh fake ration cards. The centralized printing of bar coded ration cards, their distribution in the public gatherings and community monitoring ensured transparency and accountability. In every village/wards, special public functions were held to distribute the ration cards by the representatives. The ration card details were published on the website in Hindi along with details of the holder. This helped confirm authenticity and made the system more transparent and accountable. The second important step was to computerize the movement of the goods. The doorstep delivery system was put in place based on demand and the trucks transported the goods to fair price shops. The actual allocations were fed into the computer system and delivery order was issued. The delivery truck drivers were advised to carry mobile phones with cameras. They were instructed to take pictures of the truck number and the manager whenever the commodity was unloaded. This checked diversion of loaded trucks to unscrupulous people who sold it in the open market. Thus, technology was effectively used to check corruption. The public grievance management system incorporated a call center with a toll free number functioning for 12 hours. A citizen service website, Jan Bhagidari, was also set up for registering
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complaints; it worked like RTI. Numerous FIRs were filed and swift actions were taken to punish the fraudulent elements. Besides, there was proactive sharing of information through another portal, nic.in/citizen. Under an interesting initiative, citizens were asked to register their mobile numbers for information on their fair price shops. Whenever grains were dispatched they would automatically receive SMS with details of the truck number and quantity of grains being delivered. Anyone could register for this facility. It made any fraudulent activity by the fair price shop owner or the bureaucracy impossible. Thus, use of technology brought everything under public eyes and eliminated all wrong doing. Total cost of technological intervention was just around 23 crore with 3 crore as recurring costs. The Chhattisgarh PDS model has won many awards 15. National Food Bill Vs Chhattisgarh Food Bill Chhattisgarh, the only state to have enacted a food security law, also has the best performing PDS after Tamil Nadu. A combination of policy, policing and administrative measures opting for wider coverage rather than targeted distribution, putting ration shops in the hands of those trusted by the community they serve, incentives for those running the fair price shops, computerized tracking of food grain, weeding out bogus BPL (below poverty line) cards and zero tolerance for pilferage has resulted in efficient delivery of food grain to 90 percent of the population. Significantly, apart from grains, beneficiaries are entitled to 2 kg iodized salt and 2 kg of pulses at Rs 5- Rs 10 per kg. The Chhattisgarh model would argue that the Food Security Act can work without sinking the economy. But then, the state first fixed its leaky PDS and gave its farmers incentives before enacting the law. In contrast, the Central Food Bill continues to rely on inclusion criteria to target the arbitrary percentage of population in the rural and urban areas, which leads to large errors. It also fails to specify effective measures to curtain wastage and leakages of the storage and distribution system, nor has any policy measure to encourage the farmers for sustained farming. The entitlement of 5 kg food grains per person is too low and does not offer other nutrients like pulses and edible oil. In a nutshell, it offers insufficient nutrition and ineffective population coverage. So, it is nowhere close to providing universal and meaningful food security to the country.

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Table 22: National Food Bill Vs Chhattisgarh Food Bill The Chhattisgarh Security Bill 2012 Food Grain Entitlements: Antyodaya and Priority (per household) General Food The National Security Bill 2013 Food

35 Kg Food grain at Rs 1 and Rs 2/kg 2 Kg Iodized Salt free of cost 2 Kg Black Gram at Rs 5/kg (in tribal areas) 2 Kg Pulses at Rs 10/kg (in non tribal areas) 15 Kg Food grain at Rs 15/kg Only on household basis

35 Kg Food grain to Antyodaya households 5 Kg Food grain per person to all others up to the percentage limits fixed for rural and urban areas No provision for non food grain items Antyodaya on household basis All others on per person basis Only poorest of poor

Type of entitlement

Antyodaya

Definition of Antyodaya expanded to include vulnerable groups Offers universal coverage along with clear exclusion criteria to keep away the well off population. So, about 90% population is covered under the Bill.

Population Coverage

Prescribes arbitrary limits of 75% rural population and 50% urban population. The Central government will determine statewise coverage. The states will identify the beneficiaries based on the prescribed guidelines of the Center. No such provision

Destitute and homeless

Entitled to free meals

PDS Reforms

Already taken steps to streamline the distribution system by use of IT and Communication technology. It is giving the desired results.

Talks of doorstep delivery to PDS shops and use of technology, etc. But did not accept Standing Committees specific recommendations like use CCTV cameras in godowns, internet, GPS tracking, etc

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16. Criticism of the National Food Security Bill 1. Dont Need Another Program They feel that the Food Bill is yet another welfare scheme, imposed on the already existing social welfare programs such as the Antyodaya Anna Yojana which is a part of the Targeted PDS scheme, the midday meals scheme of certain states and the Anganwadis along with ICDS. They feel that only the weakest section (under the Antyodaya scheme) of the society needs assistance (and not the wider section of the populace) and these existing schemes are already enough to cater to their needs. Rather than yet another Act, the government should strengthen these programs and plug loopholes. Expanding the scope of the Antyodaya Anna Yojana could have been a good start. These critics appear to be under the misconception that the government is making new financial and grain commitments under the NFSB. In fact, the NFSB does little more than turning the existing food security schemes such as the Integrated Child Development Services (ICDS), Midday Meal (MDM) Scheme, Public Distribution System (PDS) and maternity entitlements etc into legal entitlements. 2. Criticism by the Right to Food Campaign The Right to Food Campaign, appears to have several objections and finds the Food Bill too inadequate. It finds the Bill extremely inadequate in offering food entitlements, particularly towards combating the widespread malnutrition and needs serious amendments before passage. The proposed Bill appears to have delinked food security from nutritional security which is contrary to the 1996 Rome Declaration on World Food Security signed by India. The Declaration reaffirmed the right of everyone to have (physical and economic) access to safe and nutritious food, consistent with the right to adequate food and the fundamental right of everyone to be free from hunger. Further Article 47 of the Constitution of India instructed the State to raise the level of nutrition and the standard of living of its people

It has been consistently demanding a comprehensive food security law that incentivizes agriculture production, provisions for local procurement and local storage along with a decentralized and deprivatized universal PDS. It also wants safeguards against commercial interference including GMs in any of the food/nutrition related schemes.

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Some of its major objections are: a. It does not specify any time frame for rolling out the entitlements in the Bill. It will be implemented as and when the States get ready. Several entitlements and the grievance redressal structure would require state legislatures make adequate budgetary allocations. Implementation of the Bill may be affected if states do not pass requisite allocations in their budgets or do not possess adequate funds. b. It continues with a Targeted PDS, excluding 33 % of the population from accessing the PDS as a right, giving scope to large exclusion errors of the poor in the country as a whole. c. While the ICMR norms recommend that an adult requires 14kgs of food grains per month and children 7kgs; the Bill provides for reduced entitlements to 5kgs per person per month. There is an absence of entitlements to pulses and oil in the PDS, so fails to address the widespread problem of malnutrition d. The maternal entitlements for lactating mothers will be according to the specifications of the Central government scheme which has two child norm. So the Bill is unfair to the children after second live birth. e. The Bill continues to allow for the entry of private contractors and commercial interests in the supply of food in the ICDS, especially by insisting on specific norms related to Food Safety Acts and micronutrient norms (prescribed in Schedule 2). These standards can only be met through centralized factory based food production. The Supreme Court has also ordered to keep private contractors away from the food schemes for children, particularly in a take-home ration of ICDS scheme. Further, the effort to provide local food through self help groups etc have also been completely ignored. f. The Bill does not have an effective grievance redress mechanism. In the Bill, it begins at the district level which is ridiculous; people need it the local Panchayat or Gram Sabha level. The grievance redressal framework may also overlap with that provided in the Citizens Charter Bill that is pending in Parliament. g. The Bill does not provide any agriculture and production-related entitlements for farmers in spite of the fact that more than 60% of the people in this country are dependent on agriculture for their livelihoods. h. The Bill is silent about the destitute, homeless and starving persons in the final version. They were considered in the 2011 version.

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3. Criticism by the National Commission for the Protection of Child Rights (NCPCR) Country's watchdog for child rights, the National Commission for the Protection of Child Rights (NCPCR) is unhappy about the following provisions: Children under the age of two years have been excluded from the take home ration provided under the nutrition scheme of Integrated Child Development Scheme (ICDS). The two-child norm that will, in effect, deny entitlements to the third and onward born. The term malnutrition does not figure in the Food Bill as though the term malnutrition has nothing to do with food security or insecurity. There are no entitlements for children in the situation of malnutrition, which would be 70-80 per cent of all poor children and 40-50 per cent of all children in the country. Without focus on child malnutrition the Bill has no meaning for the country. 4. No role for State governments in decision making The Food Act denies flexibility to states running the food program based on local realities. Under the National Food Security Bill, the State governments do not have the right to identify the beneficiaries, extension of rights or making efforts at giving better security. At least 15 states including Chhattisgarh, Bihar, Tamil Nadu, Madhya Pradesh, Delhi and all 4 southern states already have their own subsidized food program and their own count of beneficiaries. The entitlements and count of beneficiaries under the Central Food Act are different and the Act is supposed to be implemented by the state governments. Most states provide wider coverage than the Central Act. The content of the proposed Act appears to assume that there are no state food programs. Thus, there will be confusion and implementational issues once the Bill is passed. There are other issues too that deny flexibility to the states in helping the masses. The Chief Minister of Chhattisgarh, for instance, has raised some good points. For example, he suggested allowing the states to decide whether to organize PDS distribution on a household or per-capita basis. It is an important point: The per-capita approach is more logical, but requires a level of administrative capability that is yet to be developed in some states. He also argued for enhancing PDS entitlements, beyond the norm of '5 kg per person' that is now being proposed. This also makes sense: if an infrastructure of redistribution is in place, it might as well be used for bigger provisioning - including other food commodities such as pulses and oil. States like TN and Chhattisgarh have almost universal coverage, implementing the Central Food Bill
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would mean roll back of their superior programs. Although the food minister assures of protecting their existing food grain allocations, but they are skeptical and feel it can be changed anytime in the future. Tamil Nadu has expressed its desire to be exempted from the Central Bill saying that it already has a more effective, robust and time tested program. The Bill requires a food commission in each state and a grievance officer in each district to look into complaints and implementation. This sounds good but states have their own mechanisms to handle grievances. Again it will create confusion and perhaps state-Center issues. In fact, a part of the states lack of enthusiasm towards the Central Food Bill comes from such stiff provisions that will deny them flexibility in implementation. Since all Central schemes are invariably implemented through the state governments, there is always a basic question about the role of the Central government. The pointer is given by comments of state chief ministers in the NDC meetings: The centrally-sponsored schemes do not serve the desired purpose and should be abolished. The states should be given their earmarked allocation as un-tied grants; they are in a better position to leverage their strengths and utilize the funds according to their development needs. (Punjab CM Prakash Singh Badal in the NDC meeting) States have different priorities from the Centre and should not be asked to partially fund central schemes. (Madhya Pradesh CM Shivraj Singh Chauhan) 5. Poor States Demand better Treatment States like Bihar, Chhattisgarh and Uttar Pradesh want a better treatment in the National Food Bill which proposes PDS coverage of 75 per cent in rural areas and 50 per cent in urban areas. These are, in fact, national averages and must be adjusted state-wise so that the poor states have higher PDS coverage. This can easily be done using a formula similar to the one used to determine state-wise grain allocations under BPL quota. It is just a matter of common sense and rigid fixation on 75 and 50 percent coverages defies that; after all the aim is to help the maximum number of poor. This is also in the best national interest. 6. How to count the beneficiaries? This is the foremost contentious issue. What are the indicators of the poor? Who should be included and who should not? Counting the poor has remained a number game in India. Various committees have come up with different counts of the poor. Whenever targeted benefits are provided to certain sections of the population, significant inclusion and exclusion errors have taken place. A 2009 expert group headed by N.C. Saxena to evaluated PDS, estimated that about 61% of the eligible population was excluded from the BPL list while 25% of APL households were included in the BPL list. The Food Security Bill relies on the same mechanism to identify

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the beneficiaries. It would have been better to specify clear exclusion criteria, as the Chhattisgarh state has done in its Bill. Many states have been running their own food programs and have their own counting mechanisms of beneficiaries. For instance, Bihar counts 1.37 lakh BPL families but the Center recognizes 65.23 lakh only. Gujarat also covers twice as many BPL families as the Center recognizes. 7. Arbitrary targeting of rural and urban population Many states have programs covering a wider range of the population and are unhappy with the arbitrary limits of 75% rural and 50% urban population. A heavily urbanized state like TN is obviously unhappy with the 50% urban limit. It wants 75% limit for both urban and rural India. 8. Financial burden on the states Although the cost of implementation of the Food Bill will be shared between the Center and the States, but it would put significant burden on the poor states. Ironically, they are the ones needing the maximum assistance. The costs imposed on states (partial or full) include: nutritional support to pregnant women and lactating mothers, midday meals, anganwadi infrastructure, meals for children suffering from malnutrition, transport and delivery of foodgrains, creating and maintaining storage facilities, and costs associated with District Grievance Redressal Officers and State Food Commissions. It is questionable whether Parliament can require states to allocate funds without encroaching on the powers of state legislative assemblies. If a state chooses not to allocate the necessary funds or does not have sufficient funds to do so, implementation of the Bill will be seriously affected. The Standing Committee examining the Bill had recommended that an independent body, such as the Finance Commission, should be consulted regarding additional funds to be borne by the states. Already the Right to Education (RTE) initiative is facing serious hurdles precisely for the same reason. 9. Hunger vs Malnutrition Critics point out that that eradication of malnutrition requires more than just removal of hunger.Simply providing for the basic minimum food is unlikely to do enough to improve Indias ignominious malnutrition levels. Food security is necessary but not sufficient for nutrition security. There is substance in this critique. For nutrition, the focus should be on children and women. The Food Bill does take a step ahead in that direction, although it could have done more on this front.
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Many activists say that for the bulk of the beneficiary population of the poor, just five kg per month per person is insufficient and have to buy rest of the ration from the open market. The TPDS will provide only about 70 to 75 per cent of the food needs. There is nothing in the Bill for the destitute and starving. 10. The Food Bill will Distort the Open Grain market The business community is concerned that there will be increased government involvement when it comes to procuring grains from the market. This fear stems from the assumption that the Food Bill will significantly raise the amount of food grain procured from the market and distort the open market prices in the process. They also fear that the very low prices of the subsidized food will bring down the grain prices. The fact is: currently the government procures only about 30% (or about 58 million tonnes) of the total food grain produced in the country for its various welfare schemes; the rest 70% is in the private sector and it will remain there. After the Bill the food grain requirement will increase to about 62 million tonnes which is an increase of only 4 5 million tonnes. So, nothing drastic will happen in the open grain market. Thus, the fear of the Food Bill causing significant extra procurement is ill founded. 11. Corruption and inefficiencies of the PDS system The PDS system is already operational but around half of the food grain is lost to leakages and gets sold in the open market for a higher price. Increasing the scale of the PDS system for the food security program will only increase these leakages. The government is also considering using direct cash transfers, in cases where the government is not able to make the food available. The cash for the food will be paid directly into peoples bank accounts. This cash route is seen as fraught will potential for misuse. Also what if the market prices are much higher than the cash received. Economists like Surjit Bhalla says that this is a recipe for fiscal disaster: the food bill will unleash corruption on an unimaginable scale. 12. Is there enough food grain to meet the governments obligation? As discussed elsewhere, as of now and certainly for near future there is sufficient food grain production and stock with the government. Many people worry about the impact of climate change issues on the food grain availability in the future. The fear is well founded but it has nothing to do with the food security program. Even without the bill and governments commitment to provide food to the poor, the climate change issues will remain.
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According to Kirit Parikh, the passage of the Food Bill may actually provide an incentive to poor farmers to stop farming. The supply of food grains at Rs3/2/1 will serve as a powerful disincentive to farmers and production of cereals in the country may actually come down. So the most worrisome question is will the farmers buy PDS Grains instead of growing Grains? 13. Is a defective food security bill better than none at all? This bill should come and it should ideally and primarily target only the poorest of the poor. But it should be targeted only to the poor. The present Bill arbitrarily proposes targets 50% of the urban population and 75% of the rural population, which is irrational. But as long as the poor are getting food at a low price, the initiative is good. However, more than the content of the Bill it is more important to reduce (eliminate) the leakages from the distribution system and make it transparent. This is happening in Chhattisgarh where over 95% of the food is going to the right people. When the food arrives instock, those entitled to it receive an alert message on their cell phones. 14. Is this Food Security or Cereal Security? As per the Food Security Act 2013, Section 2, sub section 7 the term Food Security means the supply of the entitled quantity of foodgrains and meal specified under Chapter II. According to Section 2, Sub section 8 Food Security Allowance means the amount of money paid by the concerned State Government to the entitled persons under section 13. Thus the Act implies that we should not look for overall cover of a daily mans requirement for food but it is an attempt by the Govt. to support the food security of households. Food Grain Rotting in Warehouses, Yet Millions of Hungry People More than 45 years after the Green Revolution; India provides a unique spectre of overflowing godowns and rotting grains on the one hand while millions go to bed hungry India is among the poorest countries in the Global Hunger Index. To get rid of the extra grain stock, India aggressively resorted to food grain exports. Recently, rice exports touched 10 million tonnes, making India the worlds biggest rice exporter, and close to 9.5 million tonnes of wheat was also exported. And yet, food grain stocks remain unmanageably high. State governments are not happy with the Centers grain storage and distribution policies and are forced to look for alternate storage spaces in sugar mills, yards, schools, government buildings and rice mills. For example, Madhya Pradesh, which is fast emerging as the next wheat bowl of the country, has storage space only for about 50 per cent of the expected 13 million tonnes that is likely to be procured. The situation is
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similar in other states too. Over thirty years ago, in 1979 a decentralizing scheme to reduce the burden of stock food grain was envisaged. It involved setting up 50 grain silos across the country which would also be distribution centers. But as is the status of governance in India, nothing materialized on the ground. It is a common knowledge that the entire food procurement and distribution system needs an urgent overhaul. The food crisis is not due to lack of sufficient food grain production; but largely a reflection of governments misplaced priorities and mismanagement skills. It is a strange situation that on one side there has been a significant economic growth during the past decade, but there is hardly any meaningful dent in the poverty level even as the FCI cant keep the procured grain safely. Thus, offering food grain to needy families every month at subsidized rates is an important and sensible step

Some practical suggestions to improve the Food Security Situation 1. The Food Bill should be linked to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) which assures 100 days of unskilled work to people in the rural areas at the prescribed minimum wages. Those who are part of MGNREGA should be preferentially targeted for this program. In fact, together with MGNREGA the food Act can revolutionize both agriculture and rural India. 2. It could also be linked to education as is done in Bangladesh where school children and their families are given access to subsidized food. In India we have the midday meal scheme for children to improve their attendance in schools. 3. The bill should have included subsidized rates for pulses which for many of the poorest are the only source of protein and other nutrients. The price of pulses has gone up, making them out of reach for the most. 4. Of Indias 638,000 villages, over 550,000 villages produce food crops; the rest focus on cash crops. Most of these villages have something to sell in the market, indicating surplus food grains. Yet, in the same village there are hungry people. Why cant the food security system use the local surplus stock to distribute among the local hungry and poor? It means decentralized storage of food grains: say a warehouse in each cluster of villages, block or district. Currently, the food grain in the PDS shops comes from a centralized warehouse located far away. There is a need to learn from the local tradition of food grain bank which have worked brilliantly based on the principle of sharing and caring. For instance, even in the hunger belt of Kalahandi in Orissa, there are villages where people dont starve. So, why not decentralize the PDS along
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with its whole procurement, storage and distribution grain. It will necessitate involving the local Panchayat bodies. Conclusion The National Food Security Bill 2013 could be a game-changer for national food security if the government is able to overcome large scale corruption and reduce leakage and wastage through computerization and involving the local bodies. Much can be learned from states like Chhattisgarh and Tamil Nadu, where increased local participation (through, for example, cooperative ration shops) and innovative technologies (including smart cards and computerized records) have made food distribution transparent, more efficient and better targeted. Overall better results can be obtained by integrating various welfare schemes designed to raise the wellbeing of the poor masses. India can learn from countries such as Brazil, Ethiopia and Bangladesh, where income/food transfers were bundled with education and healthcare initiatives. The success of such initiative should be measured in terms of how many poor are able to pull themselves from poverty and become self reliant in the coming years. Another paradigm shift needed in Indias food security strategy relates to nutrition security. The Food Bill has provision of free nutritious meals to children and pregnant and lactating women, which is very encouraging. Four decades ago, the Green Revolution made India surplus in wheat and rice that are high-calorie but low-nutrient food. Now is the time to diversify the food strategy (through policy changes, R&D and investment) towards more nutrient-rich foods, including pulses, which the poor are increasingly unable to afford. Although the bill focuses on food subsidies it leaves the door open for the government to introduce other types of benefits, such as direct cash transfers and vouchers. While cash transfers have the potential to reduce costs and market distortions, their success can be significantly hindered by poor banking infrastructure and the absence of well-functioning markets and supermarkets. However, there is no clarity about plans on how these different schemes will come together. International experience shows that food vouchers have led to the largest improvements in dietary diversity followed closely by cash transfers, while food transfers led to the largest increase in calorie intake. In light of this, India should treat different types of transfers as complementary food security tools. This attitude will allow policy makers to adjust when and how much cash and food is transferred based on the desired outcome, market conditions and the ability of institutions to deliver.

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While centralized planning is all right, the government must not discourage or ignore local innovations. Thus, the Bill should be flexible enough to accommodate local ideas, particularly those through the Panchayats. Much can be learned from Indias own experience in developing programs such as the Mahatma Gandhi National Rural Employment Guarantee Scheme which is ideally suited to catalyze rural development and support agriculture. Therefore, its projects should be integrated in the overall framework of long term development perspective of rural areas. India as a nation has made big mistakes on the economic and the financial front in the nearly 66 years that it has been independent, but the passage of the Food Security Bill, might turn out to be our biggest mistake till date. The Food Security Bill guarantees 5 kgs of rice, wheat and course cereals per month per individual at a fixed price of Rs 3, Rs 2, and Re 1, respectively to nearly 67% of the population. The proposed food security law is considered to worsen Indias economic imbalance and is a negative development for the countrys sovereign rating. The government estimates suggest that food security will cost Rs 1,24,723 crores per year. But that is just one estimate. The Commission for Agricultural Costs and Prices (CACP) of the Ministry of Agriculture in a research paper titled National Food Security Bill Challenges and Options puts the cost of the food security scheme over a three year period at Rs 6,82,163 crore. The CACP points out that this estimate does not take into account additional expenditure that is needed for the envisaged administrative set up, scaling up of operations, enhancement of production, investments for storage, movement, processing and market infrastructure etc. which may be required for establishment of the scheme. A higher expenditure will mean a higher fiscal deficit. The question is how will this higher expenditure be financed? Given that the economy is in a breakdown mode, higher taxes are not the answer. The government will have to finance food security through higher borrowing. For this, the government will have to go for private borrowings. The private sector (be it banks or companies) in order to compete with the government for savings will offer funds at higher interest rates which in turn increases the cost. Another major problem is that the food security scheme is an open ended scheme hence we can say that theres no expiry date or any sunset clause. It covers around two-thirds of the population which includes even those who are not really needy. This means that the outlays will have to increase as the population grows. This might also lead to the government printing money to finance the scheme. The weakest point of the right to food security is that it will use the extremely leaky public distribution system to distribute food grains. A recent study by Jha and Ramaswami estimates that in 2004-05, 70% of the poor received no grain through the public distribution system while 70% of those who did receive it belonged to the non-poor category. They also estimate that as much as 55% of the grains supplied through the public distribution system leaked out along the

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distribution chain, with only 45% actually being sold to beneficiaries through fair-price shops. The share of food subsidy received by the poor turned out to be astonishingly low 10.5%. In addition to above problem government also faces shortage of food grains production which will in turn add up to problems of food inflation. Hence in overall, the Food security Bill will be a bad implementation of a shaky idea. A better solution would be to dismantle the food subsidy entirely and pay people directly. The cost of wheat or rice in the market today is about Rs 30 per kg for PDS-provided rice. Buying five kg costs Rs 150. A direct transfer of Rs 150 into the accounts of the very same 67 percent of population will cost about Rs 1.2 lakh crore (for 70 crore people), without any of the cost of all the warehousing, the procurement, the rotting and the wastage. Therefore it is the right time to think whether it is practical to implement the Food security Bill. Jim Varghese 11.1(a) : Stock of Food grains in the Central Pool as on1st January of every year since 1991
Year 1 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Rice 2 9.63 9.29 9.48 11.95 17.42 15.41 12.94 11.49 11.68 14.18 20.70 25.62 19.37 11.73 12.76 12.64 11.98 11.47 17.58 24.35 25.58 Wheat 3 9.38 5.43 3.47 11.10 12.88 13.15 7.08 6.76 12.70 17.17 25.04 32.41 28.83 12.69 8.93 6.19 5.43 7.71 18.21 23.09 21.54 Coarse Cereals 4 0.12 0.01 0.18 0.47 0.03 0.08 0.60 0.00 0.43 0.09 0.00 0.40 0.25 0.10 Total 5 19.13 14.73 13.13 23.52 30.30 28.56 20.02 18.25 24.38 31.35 45.77 58.11 48.20 25.02 21.70 19.26 15.50 19.18 36.19 47.69 47.22

11.1(b) : Existing Buffer Stock Norms for

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foodgrains
( Million Tonnes) Rice 1 1st April 1st July 1st October 1st January The above norms include a Food Security Reserve of 30 Lakh tons of Wheat from 1.7.2008 and 20 lakh tons of rice from 1.1.2009. Source : Department of Food & Public Distribution. 2 14.2 11.8 7.2 13.8 Wheat 3 7.0 20.1 14.0 11.2 Total 4 21.2 31.9 21.2 25.0

Commodities 1 Rice(Kg)

Year 2 1993-94 1999-00 2004-05 2009-10 1993-94 1999-00 2004-05 2009-10 1993-94 1999-00 2004-05 2009-10 1993-94 1999-00 2004-05 2009-10 1993-94 1999-00 2004-05 2009-10 1993-94 1999-00 2004-05 2009-10 1993-94 1999-00

Wheat/ atta (Kg) Coarse cereals (Kg)

All cereals (Kg)

All pulses & pulse products (Kg) All edible oil (Kg)

Banana (No.)

Qty. consumed in a month Rural 3 6.79 6.59 6.38 6.14 4.32 4.45 4.19 4.36 2.29 1.68 1.55 0.85 13.40 12.72 12.12 11.35 0.76 0.84 0.71 0.65 0.37 0.50 0.48 0.64 2.20 2.48

Quantity in Kg/Litre/No. Qty. consumed per Annum Urban Rural Urban 4 5 6 5.13 82.61 62.42 5.10 80.18 62.05 4.71 77.62 57.31 4.66 74.70 56.64 4.44 52.56 54.02 4.45 54.14 54.14 4.36 50.98 53.05 4.34 53.03 52.82 1.03 27.86 12.53 0.87 20.44 10.59 0.87 18.86 10.59 0.38 10.34 4.60 10.60 163.03 128.97 10.42 154.76 126.78 9.94 147.46 120.94 9.37 138.08 114.05 0.86 9.25 10.46 1.00 10.22 12.17 0.82 8.64 9.98 0.79 7.92 9.60 0.56 4.50 6.81 0.72 6.08 8.76 0.66 5.84 8.03 0.82 7.74 9.95 4.48 26.77 54.51 5.00 30.17 60.83

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2004-05 2.37 2009-10 3.86 1993-94 0.32 Coconut 1999-00 0.37 (No.) 2004-05 0.35 2009-10 0.46 1993-94 0.06 mango 1999-00 0.10 (kg) 2004-05 0.09 2009-10 0.11 1993-94 0.03 Apple 1999-00 (kg) 2004-05 0.03 2009-10 0.05 1993-94 0.03 Groundnut 1999-00 0.05 (kg) 2004-05 0.05 2009-10 0.05 1993-94 2.71 Vegetables 1999-00 3.30 (Kg) 2004-05 2.92 2009-10 4.04 1993-94 3.94 Milk : liquid 1999-00 3.79 (litre) 2004-05 3.87 2009-10 4.12 1993-94 0.64 Eggs (No.) 1999-00 1.09 2004-05 1.01 2009-10 1.73 1993-94 0.18 Fish (kg) 1999-00 0.21 2004-05 0.20 2009-10 0.27 1993-94 0.06 Goat meat/ 1999-00 0.07 mutton (kg) 2004-05 0.05 2009-10 0.05 1993-94 0.02 Chicken (kg) 1999-00 0.04 2004-05 0.05 2009-10 0.12 Source: National Sample Survey Organization (50, 55, 61 & 66 th round)

4.14 6.65 0.46 0.51 0.47 0.63 0.12 0.16 0.11 0.16 0.11 0.08 0.12 0.16 0.04 0.06 0.08 0.07 2.91 3.49 3.17 4.12 4.89 5.10 5.11 5.36 1.48 2.06 1.72 2.67 0.20 0.22 0.21 0.24 0.11 0.10 0.07 0.09 0.03 0.06 0.09 0.18

28.84 46.96 3.89 4.50 4.26 5.55 0.73 1.22 1.10 1.31 0.37 0.00 0.37 0.55 0.37 0.61 0.61 0.61 32.97 40.15 35.53 49.14 47.94 46.11 47.09 50.09 7.79 13.26 12.29 21.08 2.19 2.56 2.45 3.27 0.73 0.85 0.57 0.57 0.24 0.49 0.61 1.50

50.37 80.91 5.60 6.21 5.72 7.64 1.46 1.95 1.34 1.92 1.34 0.97 1.40 1.92 0.49 0.73 0.97 0.82 35.41 42.46 38.57 50.11 59.50 62.05 62.17 65.19 18.01 25.06 20.93 32.53 2.43 2.68 2.51 2.90 1.34 1.22 0.85 1.11 0.37 0.73 1.03 2.19

To fulfill the objectives of the Food Security Bill, Government of India has to procure large quantity of food grains from Indian farmers. Then the food grains are distributed to the state

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governments, which in turn supply the subsidized food grains to the targeted public through Public Distribution System. Conflict with AoA India under WTOs Agreement on Agriculture agreed to offer the local farmers a procurement price below the then notified import price fixed in rupee terms in 1988, To achieve the goals of ambitious Food Security Bill, India has to violate above agreement. Developed Countries Concern Developed countries are worried about the subsidized food grains from India being routed to the international market. This may affect the fair trade in the international market. WTOs concern WTO is pressurizing Indian government to ensure the transparent mechanism in the procurement and distribution of the food grains to the public. WTO also asked Government of India to prevent the smuggling of the subsidized food grains to international market. Indias stand Indian government is not ready to take any back step in the issue. It took all necessary steps to negotiate for a solution. Accordingly Article 13 of AoA came to rescue India. Article 13 of the AoA is referred as Peace clause subsidies given under this cannot be challenged in any other agreement in WTO. Present Status Developed countries offered temporary waiver or peace clause for a period of 3 years. Indias consent to the temporary waiver to allow developing countries to go beyond the permitted food subsidy limits is being negotiated at WTO

10.1: Per Capita Net Availability of Foodgrains (Per day) in India

Year 1 1951 1956 1961 1966 1971 1976 1981 1985 1990 1991 Rice 2 158.9 187.7 201.1 161.9 192.6 187.2 197.8 188.8 212.1 221.7 Wheat 3 65.7 61.5 79.1 95.4 103.6 79.5 129.6 138.6 132.6 166.8 Other Cereals 4 109.6 111.2 119.5 102.6 121.4 107.4 89.9 87.9 86.8 80.0 Cereals 5 334.2 360.4 399.7 359.9 417.6 373.8 417.3 415.3 431.5 468.5 Gram 6 22.5 29.0 30.2 18.3 20.0 20.2 13.4 12.9 10.7 13.4 Pulses 7 60.7 70.3 69.0 48.2 51.2 50.5 37.5 38.1 41.1 41.6 Food Grains 8 394.9 430.7 468.7 408.1 468.8 424.3 454.8 453.4 472.6 510.1

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1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010(P)

217.0 201.1 207.4 220.0 204.4 214.0 200.3 203.4 203.7 190.5 228.7 181.4 195.4 177.3 198.0 194.0 175.4 188.4 184.8

158.6 140.2 159.5 172.7 176.0 179.1 151.5 162.3 160.0 135.8 166.6 180.4 162.2 154.3 154.3 157.8 145.1 154.7 167.9

58.9 86.6 67.1 64.9 62.0 72.9 62.4 63.4 59.0 56.2 63.4 46.7 69.3 59.4 60.5 55.5 54.1 63.9 54.3

434.5 427.9 434.0 457.6 442.5 466.0 414.2 429.2 422.7 386.2 458.7 408.5 426.9 390.9 412.8 407.4 394.2 407.0 407.0

10.1 10.7 11.8 14.9 11.3 12.4 13.4 14.6 10.8 8.0 10.7 8.5 11.2 10.6 10.7 11.9 10.6 12.9 13.5

34.3 36.2 37.2 37.8 32.7 37.1 32.8 36.5 31.8 30.0 35.4 29.1 35.8 31.5 32.5 35.5 41.8 37.0 31.6

468.8 464.1 471.2 495.5 475.2 503.1 447.0 465.7 454.4 416.2 494.1 437.6 462.7 422.4 445.3 442.8 436.0 444.0 438.6

Note: The net availability of foodgrains is estimated to be Gross Production (-) seed, feed & wastage, (-) exports (+) imports, (+/-) change in stocks. The net availability of foodgrains divided by the population estimates for a particular year indicate per capita availability of foodgrains in terms of kg/year. Net availability, thus worked out further divided by the number of days in a year I.e., 365 days gives us net availability of foodgrains in terms of grams / day. Figures in respect of per capita net availability given above are not strictly representative of actual level of consumption in the country especially as they do not take in to account any change in stocks in possession of traders, producers and consumers. For calculation of per capita net availability the figures of net imports from 1981 to 1994 are based on imports and exports on Government of India account only. Net imports from 1995 onwards are the total exports and imports (on Government as well as private accounts) Cereals includes rice,wheat and other cereals Pulses includes Foodgrains includes rice, wheat,other cereals and all pulses all kharif and rabi pulses

Source: Directorate of Economics and Statistics, Department of Agriculture and Cooperation. Table 5: Net per capita availability of cereals and pulses Year Population (million) Cereal(Net Pulses(net Cereals per Pulses per Total per availability) availability) capita capita capita (million (million availability availability availability
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tons) 1951 363.20 44.80 1961 442.40 64.60 1971 551.30 84.00 1981 688.50 104.80 1991 851.70 145.70 2001 1033.20 145.60 2002 1050.60 175.90 2003 1068.20 159.30 2004 1085.60 169.10 2005 1102.80 157.30 2006 1119.80 168.80 2007 1136.60 169.00 2008 1153.10 165.90 2009 1169.40 173.70 Source: Economic Survey, 2010-11

tons) 08.00 11.10 10.30 09.40 12.90 11.30 13.60 11.30 14.20 12.70 13.30 14.70 17.60 15.80

perday(gms) 334.20 399.70 417.60 417.30 468.50 386.20 458.70 408.50 426.90 390.90 412.80 407.40 394.20 407.00

perday(gms) 60.70 69.00 51.20 37.50 41.60 30.00 35.40 29.10 35.80 31.50 32,50 35.50 41.80 37.00

perday(gms) 394.90 468.70 468.80 454.80 510.10 416.20 494.10 437.60 462.70 422.40 445.30 442.80 436.00 444.00

Table 3 shows that the population over a period increasing at higher rate than the net availability of cereals and pulses, per capita availability is decreasing over the years but during 2009 it has increased to 444 gms from 436 gms.

Source: Agricultural Statistics at a Glance 2009, MoA, GoI 2009 Figure 2 : Per capita availability of food grain crops: 1990 to 2008 (P)

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Year

Food subsidy Annual growth (Rs crore) (per cent) 9,200.00 12,010.00 17,494.00 24,176.45 25,160.00 25,746.45 23,071.00 23,827.59 31,259.68 43,668.08 46,906.68 05.75 30.54 45.66 38.20 04.07 02.33 -10.39 03.28 31.19 39.69 07.42

1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Source: Economic Survey, 2009-10

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There was drastic increase in the food subsidy released by GOI, during 1999-00 it was just 9200 crore but in 2009-10 it was 46906.68 crore. The growth in food subsidy was positive in all years except during 2005-06.

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