Saturday, April 4, 2015

A question of food security

A question of food security

The country’s food security is seriously compromised by the report of the high level committee headed by former food and civil supplies minister Shanta Kumar. The timing of the constitution of the committee and release of its report are crucial. The WTO summit at Bali mandated the governments to stay off the market. The terms of reference were tuned to the mandate of WTO Bali summit, argues Veeraiah Konduri
The Narendra Modi government appears committed to removing any state intervention which hinders the free play of market forces. This is clear from its policy pronouncements, be it FDI in insurance, defense, railways, or privatization of Navaratna companies by incremental sale of shares. It also seems set to destroy all the protective systems which are kept in place in country’s endeavor of economic development.
Enough evidence comes from the High Level Committee appointed by the Prime Minister under the chairmanship of Shanta Kumar, former union minister for Food and Civil Supplies.
Constituted on 20th August 2014, the committee in its report made a scathing attack on the basis that brought FCI into existence. Thus the report is eyewash to re-route government’s predetermined policy orientation.
It is surprising that food security failed to get space in the elaborate terms of reference. Instead, there was a detailed recommendation about phasing out the public distribution system in its current form and change over to cash transfer scheme, whose efficacy is yet to be proved. Soon after it came to power, the Modi regime issued guidelines to state governments asking them to discontinue incentivizing the levy procurement.
The timing of the constitution of HLC and release of its report are crucial. The WTO summit at Bali mandated the governments to stay off the market. The terms of reference were tuned to the mandate of WTO Bali summit.
The procurement of levy rice by Food Corporation of India has been found one of such market distorting state interventions in India. There has been a suggestion to privatise procurement of agricultural produces. Procurement by private players is a vital link for establishing the back supply chain for the sustenance of large scale retailers such as Wallmart.
Thus, the withdrawing the state intervention in procuring agricultural commodities through various channels such as FCI, STC, MMTC, CCI is only to meet the dual tasks that feed the entry of private capital both foreign and domestic. Already certain vested interests have filed a petition in the Competition Commission of India seeking its intervention to study whether the FCI procurement amounts to restricting the entry of private players there by restricting the open market competition which in turn violates the law enacted by parliament.
It is surprising that food security failed to get space in the elaborate terms of reference. Instead, there was a detailed recommendation about phasing out the public distribution system in its current form and change over to cash transfer scheme, whose efficacy is yet to be proved. Soon after it came to power, the Modi regime issued guidelines to state governments asking them to discontinue incentivizing the levy procurement.
committee, neither the experiences of 1960s’ severe drought and food scarcity nor falling production etc, from concluding “… the larger food management system, of which FCI is an integral part, has not delivered on its primary objectives very efficiently.”
A part of the recommendation on page 44 tabular format said, “Of course, FCI may not be directly responsible for many of these.” Why, then a recommendation that FCI be dissolved or unbundled? What is the logic behind this?
The FCI was set up in 1965 under Food Corporation Act 1964 against the backdrop of major shortage of grains, especially wheat. To face the eventual food crisis, the country, then, embarked on large scale import of Pl 480 which had its own implications in terms of foreign exchange management and price volatility in the global market. That was the time when the government looked inward and argued for self-sufficiency in food production. Accordingly the agrarian reforms were redirected towards enhancing the food production and embarking on the green revolution. This helped the newly emerging rich farmers’ community to go on producing to meet the nation’s requirement.
As time moved on, global and domestic economic conditions changed and the government embarked on reforms spree regime. Several reforms measures were unleashed during the last two and a half decades. The basic objective of these reforms is to delink the rationale of social responsibility underlying the series of economic decisions that were taken and institutions that came up during the era of mixed economy. Once we moved away from the rationale behind emergence of each institution, it won’t take much time to recommend, comment against the spirit and objectives of the institutions themselves. That is what the neoliberal elite in India is contributing nowadays.
The neoliberal elite picked up some holes in each of these institutions, mechanisms and processes. These holes are calculatedly developed over the period of time as part of government non committal response to meet the situation arising out of new developments. Now the same consequences of government’s ineptness is being used as basis for undermining the system itself. The HLC’s recommendation of handing over all procurement operations of wheat, paddy and rice to states is one in such direction. That means in effect, the responsibility of food security related management is left to the state governments that are already reeling under mountains of debts and deficits, courtesy, neoliberal reforms which undercut the income sources of state governments.
Arguing that the MSP mechanism is benefiting few farmers, the HLC recommended to discontinue with this mechanism itself. In this direction, the HLC recommended that the Center should make it clear to states that in case of any bonus being given by them on top of MSP, it will not accept grain under the central pool beyond the quantity needed by the state for its own PDS and OWS.
Arguing that the MSP mechanism is benefiting few farmers, the HLC recommended to discontinue with this mechanism itself. In this direction, the HLC recommended that the Center should make it clear to states that in case of any bonus being given by them on top of MSP, it will not accept grain under the central pool beyond the quantity needed by the state for its own PDS and OWS.
The instrument of bonus on the top of MSP is being mastered by the state governments over the period of time in order to keep their ruling alliance with the farming community under the leadership of rich farmers intact. Now, the farming community is going to lose good quantities of benefit that is being showered on them occasionally by the state governments. But in the long run, it has the potential to change the ruling class alliances in rural India.
The most damaging recommendation is about the implementation of National Food Security Act. Though the NFSA was enacted almost two years before, it failed to come in to operation till now. The BJP in its poll campaign had promised to immediately implement NFSA. On the other hand, now through HLC recommendations it is going to put the food security commitments permanently in to the dustbin.
The HLC recommended that government takes a second look at NFSA, its commitments and implementation. The HLC report says, “Leakages in PDS range from 40 –50%, and in some states go as high as 60 – 70 %.” In this context, the HLC further goes on to recommend, “ GoI should defer implementation of NFSA in states that have not done end to end computerisaion, have not put the list of beneficiaries online for anyone to verify, and have not set up vigilance committees to check pilferage from PDS”.
At the same time, the HLC failed to go through the reasons behind such problems. It just pooled up the criticism of neoliberal elite against the social security measures in general and against the PDS in particular and proceeded to conclude that the whole system centering on FCI is wrong and it needs to be unbundled.

http://www.10tv.in/…/Movement-against-land-acquisition-87189


Sunday, November 16, 2014

Has Poverty Decreased ?

Has poverty decreased ?

The debate on poverty has transformed into a new plane since the country embarked on globalization. Before 1991 the poverty was measured in the light of the government policies implemented in line with domestic priorities. With the implementation of globalization policies since 1991, the poverty estimates call into question the set of policies under implementation since then. The poverty estimates, both released in 2011 by the Suresh Tendulkar committee and now in 2014 by the Rangarajan committee, are relevant, writesVeeraiah Konduri
New poverty estimates for India are in public domain now. By submitting its report in 2014 July, C. Rangarajan, former Chairman of Prime Minister’s Economic Advisory Council, performed his last official assignment. In preface to his report Rangarajan said, “Growth is not the sole objective of economic policy. It is necessary to ensure that the benefits of growth accrue to all sections of society.” A usual refrain in government language.
The debate on poverty has transformed into a new plane since the country embarked on globalization. Before 1991 the poverty was measured in the light of the government policies implemented in line with domestic priorities. But with the implementation of globalization policies since 1991, the poverty estimates call into question the set of policies under implementation since then. That is why the poverty estimates, both released in 2011 by the Suresh Tendulkar committee and now in 2014 by the Rangarajan committee, are relevant.
A comparative reading of the Lakhdawala committee findings on poverty in India and those of the Tendulkar and Rangarajan ones are important as they reflect the changes in poverty during the last decades of economic reforms. Not only that. During the last two decades, India stood out as one of the fastest growing economy scoring its growth rates nearing double digits before the global capitalist stagnation unfolded.
C. RangarajanThat is why some of the commentators in 2012 went even up to scolding those who begged to differ the estimates of Tendulkar committee. The tongue-in-cheek English media went one step ahead when it claimed that those who differ on Tendulkar’s estimates wants to see India still poverty ridden country and wants to keep their politics alive by punching the bag of sustaining poverty. For a surprise, there is no such a debate on the Rangarajan committee findings. Perhaps all the commenators must be busy in trying to locate the impending economic growth under the new regime in the country. We were told that the growing economies and economic growth benefits all sections of people and helps them to move out from poverty stricken life to life with dignity.
The Planning Commission based on the methodologies and recommendations suggested by the successive working groups on poverty has been performing the job of determining the poverty levels in India. The groups constituted by the planning commission from time to time are also revisiting the methodology deployed for this purpose. Presently the methodology prescribed by Suresh Tendulkar in his report is being used. Experts group headed by Suresh Tendulkar was constituted by the Planning Commission way back in 2005 and the group submitted its report in 2009.
As the Rangarajan committee report mentions, the Suresh Tendulkar committee used the all India urban poverty line basked as the reference to derive state –level rural and urban poverty, which is a deviation from the established practice of measuring the urban and rural poverty line separately. With this attempt, the absolute poverty declined fast in the country during the last two decades. Tendulkar observed, “Fundamentally, the concept of poverty is associated with socially perceived deprivation with respect to basic human needs”. By mentioning it as socially perceived deprivation, Tendulkar seems, refused to see the deprivation in real life of a poor. With the controversy arose about Rs. 32 a day per capita expenditure for a person to be labeled as poor, the then UPA government appointed high level committee to look into the issue under the chairmanship of Rangarajan.
The table below reflects the variation in the basic details of poverty estimates. Table 1 informs about the monthly per capita expenditure where as table 2 informs about the absolute number of poor in India including the absolute poverty decline during the period. As shown in table 1,
the per capita monthly consumer expenditure considered by Tendulkar committee for a person to be categorized as below poverty, is upwardly revised by Rangarajan panel from Rs 673 to 801 for rural areas and Rs. 860 to 1198 for urban areas for the year 2009-10. Similarly for the year 2011-12, the Tendulkar committee fixed minimum monthly per capita expenditure at Rs. 816 for rural and Rs. 1000 per urban where as Rangarajan panel pegged these figures at Rs. 972 and 1407 for the same period. The calculations arrived at by Suresh Tendulkar panel suggests.
Table 2 also reveals similar
variations in the number of absolute poor in the country. The Tendulkar committee concluded that only 29.8 % of India’s population was poor in 2009-10 and it further went down to 21.9 % by 2011-12 where as Rangarajan panel findings concludes that a 38.2 % of Indians were poor in 2009-10 and in 2011-12, the percentage of poor declined to 29.5 %. Thus on an average an additional ten percentage of country’s people got the BPL tag. Though the number of poor went up with the calculations of Rangarajan panel, the so called commentators which expressed its outrage over the Tendulkar committee findings kept silent for its own reasons
Now after perusing the key findings and variations in findings between the two panels, let us consider the problems with the findings of Rangarajan panel. There two set of objections to the latest findings. One is about the food basked and calorie norm computed by the Rangarajan panel and the other is much larger one, the one that contextualize the decrease of poverty in India in the given pace of economic growth over the last few years. As the above tables indicate, there is an average 8.7 % of population moved upward from the shackles of poverty between 2009-10 and 2011-12, just in the span of three years. This feat is primarily achieved by skewing the calorie norm. First let us consider the calorie norm computed by Rangarajan panel.
The Alagh committee in 1979 computed this calorie norm basing the differences of works to be performed by the different classes of people in rural and urban areas. Since then it became a standard for various government policy formulations and fixation of even minimum wages. Over the last 35 years what are the changes that occurred in the nature of works that are being performed by the workers in rural and urban areas that resulted in requirement of reduced energy? How the Ranragarajan panel came conclusion that mere 2155 calorie is sufficient for performing the hard works? What are the new technologies that came into rural area that requires the rural workers to spend less energy while performing the operations? No one knows.
This computation will have far reaching consequences in computing the minimum wages as the nutritional requirement stands a prime concern while fixing the minimum wages. By reducing the minimum required calorie food, the Rangarajan panel excluded considerably higher number of people from being poor who are originally unable to spend to meet the 2400 calorie food. This 10 % reduction in minimum required calorie intake, if one takes into consideration, would have added up number of people below the poverty line to a much higher figure.
Another major question comes up from the government own figures themselves. When we see the poverty estimates of Rangarajan panel in the light of the National Sample Survey Organisation’s 68th round survey, the incompatibility of both the findings comes out more expressively. According to the 68th round survey of NSSO the total number of work force increased to a 30.9 million by 2011-12. But only 1.5 million work force could only be absorbed by the economy given its slackening of GDP growth from 8.40 % in 2009-10 to 6.88 % in 2011-12.