Food Security Bill

Topics: Poverty, Subsidy, Subsidies Pages: 3 (1184 words) Published: June 1, 2013
The food security bill promises to alleviate hunger and guarantee very cheap food to India’s poor but there are concerns it has not been properly thought through and could become unsustainable. P. K. Joshi, South Asia director of the International Food Policy Research Institute, a think-tank  headquartered in Washington, talked to The Wall Street Journal about the pros and cons of the bill and what it will mean for India. Edited excerpts: The Wall Street Journal: The food security bill sounds like a positive thing for India’s poor. Is it? P. K. Joshi : It’s a good attempt by the government to ensure food and nutritional security for people who don’t have access to food at a subsidized rate. The bill will extend subsidized food to pregnant women and children under the age of 16. It is positive that it is including those who really need nutritious food. The government says it will guarantee food at very cheap rates of between one and three rupees per kilogram to up to 70% of the population. Under the program everyone who qualifies for the subsidy will be entitled to 5kg in total of rice, wheat, pearl millet and sorghum (a cereal). Rice will be sold at a subsidized rate of three rupees per kilogram; wheat for two rupees per kilogram; coarse cereals at one rupee per kilogram. It will be up to states to decide how much of each food stuff each person will get at these rates. WSJ: How much will all this cost?

Mr. Joshi: This is a mega program and will require a huge food subsidy.  The cost of it will go up from 0.8% of Gross Domestic Product to around 1.1% of GDP. This is a serious increase in a situation where the government does not have enough resources as it is. Take rice for example. The government purchases the grain at an economic cost of 18 rupees ($0.33) per kilogram. This includes the price it pays the farmers, the cost of stocking the food and distributing it. Under the bill, the government will sell the food to ration card holders at between one and three...
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