11 November 2013

India approves the largest ever food security programme

On 2 September, the Upper House of the Parliament of India approved a new National Food Security Bill. It is expected to benefit around 800 million people (75% of rural and 50% of urban population) and will involve the distribution of more than 60 million tons of cereals annually (India produces around 280 million tons of cereals every year). The implementation of this Bill will cost 1,250 billion rupees (close to $20 billion). This will be by far the largest ever food security programme.

The cost of this programme will be of approximately $25 per beneficiary, each eligible person getting 5 kg of highly subsidised foodgrains per month from the state government (India is a federation of 28 States and 7 Union Territories), availed through the already existing public distribution system. Pregnant and lactating mothers will get free meals up to 6 months after delivery and some additional monetary benefits. A free meal will be given to children less than 14 years old, for destitute or homeless persons, disaster victims or persons on the verge of starvation. The identification of eligible households is left to the States and Union Territories, which may define their own criteria.

The Bill will be the main instrument for turning the Right to Food, included in India’s Constitution, into reality. India was the top rice exporter in 2012 and has abundant stocks of food. FAO estimates that more than 220 million Indians suffer from chronic hunger, making India the country with the largest number of hungry people in the world.

Critics argue that before launching this programme, the government should have overhauled the existing public distribution system which is said to be flawed, subject to corrupt practices and a source of black market activities. They also say that measures envisaged in the Bill for reforming the system are clearly insufficient. Many believe that the impact of food distribution envisaged will be much less than expected because of other factors like the lack of safe water, sanitation and adequate healthcare that will make it that much of the food distributed will not be properly assimilated by beneficiaries. They argue that to be more effective in reducing hunger, the Bill should be supported by nutrition education and be geared to providing a more balanced and quality diet, particularly for children, and not just distribute cereals in quantities which will anyway be below requirements. The political opposition believes that the cost for the government budget will be unsustainable and that the Bill is being implemented for electoral purposes. The government argues that the cost involved will be less than 2% of GDP and will generate considerable benefits in terms of improved nutrition, health and productivity of beneficiaries.

Representatives of the business community criticise the Bill as it is likely to make the public sector the largest buyer and storer of food in the country, contributing, according to them, to a de-facto nationalisation of the agriculture sector. Other critics believe that the programme will contribute to increase the price of cereals, because of a higher demand, and have a negative impact on the production of oilseeds and pulses which are already in short supply, as cereal production is likely to become more attractive for farmers.

At the international level, some effect of the approved Bill can already be felt. Indeed, it is likely that the recent proposal by the 46 countries of the so-called ‘‘G33’’ to reopen talks on subsidies at WTO can be linked to it. India, China and Indonesia are members of this group. The proposal seeks to exempt food procurement for stocks from the calculation of the Aggregate Measure of Support (AMS) which has to be periodically reported under the WTO Agreement on Agriculture. The newly-elected Director-General of WTO, Roberto Azevedo, declared in October that India would soon breach its AMS commitment with the implementation of the Bill. For reference, the latest notification from India to the WTO available on the WTO website, shows for the year 2003-04 an agricultural inputs subsidy of $9 billion and buffer stock operations of around $5.5 billion. Under de minimis exemption, India is allowed to support annually its agriculture up to 10% of the total value of its yearly production which is in the range of $250 billion. So it is clear that the implementation of the new Food Security Bill could be challenged at the WTO unless the G33 proposal is being considered.

To conclude this, we can only hail the huge effort contemplated by India. It is fully in line with the second of our Seven principles for ending hunger. However, it is likely that, as this Bill is being implemented, some fine tuning will be required to address some of the criticisms of the Bill and its implementation arrangements. In particular, the need for transparency and clarity in the identification of beneficiaries and distribution of food, and for the promotion of a more balanced diet, appear to be valid points that the Government of India will have to consider. It will be thrilling to see what impact this programme has on hunger and nutrition in the country.

The lessons to be learned from this huge effort will be of invaluable use to all other governments who are committed to ending hunger.

Last update:    November 2013

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