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Legislative Comment: The National Food Security Act, 2013: A Critique by George K. Jose

The National Food Security Act, 2013

Aims to provide for food and nutritional security by ensuring access to adequate quantity of quality food at affordable prices to the people to live a life with dignity.  It also provides ways and means for the revitalization of agriculture in the country. While the Act specifically calls for revitalization of agriculture, the state and central governments are handing over agriculture to the corporate sector. The massive migration of people from rural areas to the towns abandoning agricultural sector and alarming numbers of suicides by farmers across the country adds to the urgency in the matter. Objectives of Food Security Act and the agricultural corporatization by the Government of India in tune with the demands of WTO and globalization seem incompatible. Encouraging corporate interest in agriculture may destroy the very objectives of Food Security Act. It is necessary to understand the various incompatibilities between food security and revitalization of agriculture as mandated by the Constitution on one side and corporatization of agriculture under the pressures of globalization on the other. One has to find an ingenious approach to WTO conditions that currently turn Indian agriculture into a multi- national business for profit alone.

 The Indian National Food Security Act, 2013, (also known as the Right to Food Act) is a legislative measure of the Government of India to guarantee subsistence and nourishment to nearly 67% of its 1.2 billion populations. This herculean task attempts to secure more than 70 million Indians from the threat of starvation. More than six decades after its independence, India now offers a guarantee to its people that of providing them with very first of basic human need, i.e. food. By enacting Right to Food legislation India is also on its way to fulfill its commitment to one of the Universal Human Rights.

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The National Food Security Act, 2013, “provides for food and nutritional security in human life cycle approach, by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity and for matters connected therewith or incidental thereto”. Enactment of Right to Food is considered as one of the major achievements of the UPA- II Government along with the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, enacted under UPA-I. For the UPA Government at the Center the enactment of laws to provide for minimum employment and food for the rural and urban poor are fulfillment of its election promises and commitment to the needs of the poor and marginalized.

Under the Food Security Act, provisions are made to ensure “every person belonging to priority households, shall be entitled to receive five kilograms of food grains per person, per month at subsidized prices” and households covered under Antyodaya Anna Yojana “be entitled to thirty five kilograms of food grains per household per month” at specified rates. This scheme shall extend up to seventy five percent of the rural population and up to fifty percent of the urban population. Special provisions for food guarantee are made for pregnant and lactating women and every child up to the age of fourteen years.

Chapter III of the Act ensures that “in case of non-supply of the entitled quantities of food grains or meals to entitled persons under Chapter II, such persons shall be entitled to receive such food security allowance from the concerned governments to be paid to each person within time and manner prescribed.

Schedule III under Section 31 of the Act provides ways and means for the revitalization of agriculture in the country through agrarian reforms including measures for securing interests of small and marginal farmers, increase in investments in agriculture, ensuring livelihood security to farmers and prohibiting unwarranted diversion of land and water from food production etc. Along with revitalization of agriculture, access to safe and adequate drinking water and sanitation, health care nutritional, health and education support to adolescent girls along with adequate pensions for senior citizens, persons with disability and single women are also envisaged. Though hidden away in one of the Schedules, the ambitious provisions of the Act are going to be Himalayan tasks for the government. Tough policy decisions and budgetary allocations to back such decisions are going to be difficult or near impossible given the international trade implications.

The Food Act is a guarantee for food availability or food security.  The National Food Security Act of India aims “to provide for food and nutritional security …….by ensuring access to adequate quantity of quality food at affordable prices to the people to live a life with dignity” and it has laid down provisions for advancing food security in India through revitalizing agriculture. The Directive Principles of State Policy, while laying down guiding principles for the governance of the country has specifically mentioned the growth of agriculture as a priority.

The mandate of the constitution under Article 48 is to modernize agriculture and animal husbandry on scientific lines and the National Food Security Act specifically calls for revitalization of agriculture to advance food security. However today the policies of the Central and State governments in India in field of agriculture or agrarian developments is subject to the WTO Agreement on Agriculture.

There is an alarming growth of corporate sector in agriculture producing bitter harvests across the country. Corporatization is defined as a process of reorganizing government owned organizations to reflect the structure of a publically owned corporation. The restructuring of the government entity is generally not publically traded with the government being the sole shareholder.

Corporatization of agriculturemeans that fewer and fewer people (acting through corporations) are controlling more and more of the production of food.  The corporatization of agriculture also means that small, family farms are also closing down. Millions of landless agricultural labourers, are not even accounted for in this scenario. A lion’s share of beneficiaries of the Food Act will be from this category.

India is not safe from the invasion of corporatization of agriculture. Globalization and liberalization are turning Indian agriculture into a business for profit under the aegis of the WTO conditions. Agricultural subsidies and food subsidies are on the prohibited or frowned upon list of the global market. The billions required to subsidize the food grains for more than 70 crores of Indian is going go foul with the market mechanisms the government has agreed upon with international community.

The massive migration of people from rural areas to the towns abandoning agricultural sector for better employment and livelihood in cities is a call for critical analysis of the way the nation is handling its agriculture. Alarming numbers of suicides by farmers across the country adds to the urgency in the matter. Millions of landless agricultural laborers, who are also mostly illiterate and unskilled, constitute the single largest work force in the country. The ever expanding corporatization of agriculture ensures that these millions have no more gainful employment, pushing them down the food pyramid to starvation.

The Food Act has no end of critics. The enormous financial burden it is going to impose on the exchequer is frightening factor for the economy of the country. According to the government’s own calculations, the additional annual food subsidy implication will be about Rs.23, 800 crores over the estimated food subsidy requirement under the existing Public Distribution System and other welfare schemes. At the 2013/14 costs the Central Government’s total food subsidy will be close to Rs.125, 000 crores annually.

According to a former Governor of the Reserve Bank of India the policies (the significant increase in rural wages triggered by the MGNREGS and inflationary implications of the Food Security Act) aimed at inclusive growth can stoke inflationary pressures at any rate in the short-term. “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.”

The WTO Director General, Roberto Azevedo, echoed the worry of the international business when he stated that India will soon be breaching their Aggregate Measurement of Support (AMS) commitments to WTO due to its new food security programme. He stated that some countries have expressed concern over the procurement and distribution of highly subsidized food grains.

Mr. Azevedo wanted India to work out a strategy on its food security law ahead of the Bali Ministerial Meeting of the WTO. He said that India should consider the ‘Peace Clause’. Under the Agriculture Agreement, the Peace Clause protects subsidies awarded by countries who comply with the agreement, from being challenged under other WTO agreements. Although it expired in 2003, some countries want it extended, while others want agriculture to be brought under general WTO discipline that deals with a state’s ability to act against subsidies. Negotiations for a deal at the Bali meet were stuck over the tenure of an interim resolution on the demand by G-33 developing countries on food security. While the G-33 is demanding the tenure of the peace clause to be 10 years, developed countries such as the US are ready to accept only a 2-3 year period.

Today food is treated as profit making commodity in trade and commerce. A commodity is something useful that can be turned to commercial or other advantage or benefit. Food should be treated as human right that it is and not as a commodity. Over-commoditization of the global food supply is one of the most critical root causes of food insecurity. Speculation on food as a commodity for profit keeps food out of the reach of the poor.

There is an alarming growth of corporate sector in agriculture producing bitter harvests across the country.  The massive migration of landless labourers from rural areas to the towns abandoning agricultural sector for better employment and livelihood in cities is a call for critical analysis of the way the nation is handling its agriculture. Alarming numbers of suicides by farmers across the country adds to the urgency in the matter. It is in this background that one studies the Food Act and its provisions for the advancement of agriculture.

The National Food Security Act, 2013, is touted to wipe out hunger from the face of India and guarantee food security to all people. This grand objective is to be achieved through revitalization of agriculture.  Objectives of the National Food Security Act, 2013 vis-à-vis globalization and agricultural corporatization by the Government of India in tune with the demands of WTO seem incompatible.

The latest Asia Development Bank Report on Social Protection in Asia covering 35 countries, where it compares India with the other 18 lower middle income countries in Asia. According to the report in lower middle income countries expenditures on social insurance, social assistance, and labour market programmes are, on average, 3.4 per cent of GDP. India’s is a mere half of that at 1.7 per cent. Even that low level is reached largely because of MGNREGA, not existing food security costs. Among low income countries, the Kyrgyz Republic (whose GDP per capita is only $871 (2009)), invests eight per cent of GDP in social protection. Upper middle income countries spend four per cent of GDP on average, and high income countries spend 10.2 per cent. Japan spends a massive 19.2 per cent of GDP on social protection and China 5.4 per cent. Singapore spends more than twice as much as India, at 3.5 per cent of GDP.

The media has criticized the cost of the National Food Security Act as excessive. While some called it as a “money guzzling measure” and others viewed it as “populist measures.” A former Union Finance Minister branded the Act as “senseless welfarism.” The Financial Times warned “This new spending will increase India’s fiscal deficit” and The Economic Times warned that the Act endangered the fiscal deficit target. One non-executive director of Tata Steel argued “Food security is important but the government needs to be able to generate enough wealth in the country to be able to afford food security.” The Confederation of Indian Industry (CII) declared “Under the present economic situation, the government can hardly afford to allow the fiscal deficit roadmap to be compromised in any way.”

However these criticisms are highly exaggerated to portray the Act as unaffordable. Currently India spends about 0.9 per cent of GDP on food subsidies, and with the arrival of the Food Act that will rise to a little less than 1.25 per cent. If feeding its citizens is a priority for the nation then the additional expenditures can be adjusted by cuts in some other sectors.  We have to keep in mind that healthy workers are essential for sustained economic growth — as well as human development.

To meet the mandate of the Food Act, the Central and State governments   need to procure a lot more food grain than they do now from our farmers and also employ imports. To be self-sufficient in meeting food security requirements our farmers must have an incentive to produce more: they will look for higher procurement prices and access to better farming inputs. The Rangarajan Committee, reviewing the National Advisory Council’s version of the law, has suggested India should procure only 30 per cent of the country’s total production from farmers or it will result in a “distortion of food prices in the open market.” Knowing the factual position on procurements from farmers, food imports are here to stay. India cannot give incentives to its farmers without falling foul of its international commitments. If it still goes ahead, the West is entitled to retaliate with crippling trade countermeasures. Since the developed countries do not cut their agro-subsidies, India will also face cheap food imports muscling domestic farmers out of business.

If India starts buying grains from its farmers at well above international prices, then it acts as an implicit incentive to the local farmer to produce more than he otherwise would. This would squeeze out global grain suppliers. However India should contest argument on the ground that persistently high domestic inflation makes it imperative to raise the Minimum Support Price (MSP) for farmers from time to time. India should invoke clause 18.4 of the Agreement on Agriculture (AoA) which says that “due allowance shall be given” to the inflation factor while assessing whether the MSP violates the AoA.

One of the substantive provisions of International Food Security Treaty states in its Fundamental Principles thatfree market structures are not sufficient to assure global food security; basic guarantees of individual access to food are needed. International cooperation and assistance may be necessary in order to implement such access in Low Income Food Deficit countries. It is also stated therein that food may never be used as a weapon to gain political or military advantage either within a state or as an instrument of foreign policy. The successful implementation of the Food Act is dependent on international co-operation and also the guarantee that the nations arms are not twisted as part of the foreign policies of the developed nations.

There can be no two opinions about the need for the Food Security Act. All the arguments should be the strategies in implementing the ideals enshrined therein. Financial feasibility and international business interests are not and should not be reasons why the Act fails to wipe out hunger from the face of India. Revitalization of Indian Agriculture in the face of globalization and corporatization of agriculture is a serious concern that ought to be handled with utmost seriousness.

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