Leaving no poor person behind

The National Food Security Act is finally making headway in the poorest States. Amplified by reforms in the Public Distribution System, a modicum of nutritional support and economic security to all vulnerable households is now a real possibility.

Dhobargram is a small Santhal village in Bankura district of West Bengal, with 100 households or so. Most of them are poor, or even very poor, by any plausible standard. There are also some relatively well-off households — they are not rich, but they have things like concrete houses and motorcycles, often thanks to a permanent job in the public sector. Should this small minority of better-off households be excluded from the Public Distribution System (PDS)? Including them costs public money, and they are not at risk of undernourishment. On the other hand, weeding them out is a major headache, as West Bengal and neighbouring states are discovering in the course of implementing the National Food Security Act (NFSA). Also, excluding them creates a small but powerful group of disgruntled people who may be tempted to sabotage the PDS in one way or another. When they are included, there is greater pressure on the system to work.

Improved framework

Jean Drèze

A house-to-house survey conducted in Dhobargram last month confirmed something we had already noticed: West Bengal’s PDS is based on a restrictive, outdated and faulty list of “below poverty line” (BPL) households. Out of 105 households, only 29 had a BPL card or an Antyodaya card (meant for the poorest of the poor). The rest had an APL (above poverty line) card, or no card at all — both ways, they were excluded from the PDS except possibly for kerosene rations. By contrast, 78 per cent of Dhobargram’s households are on the new list of NFSA ration cards, which are to be distributed this month. Further, we found that most of the remaining 22 per cent were households that met the official exclusion criteria, such as having a government job or a pucca house with at least three rooms. The new list, based on the Socio Economic and Caste Census 2011 (SECC), is not only more inclusive than the BPL list, it is also more reliable.

This is just one village (selected at random), but Dhobargram illustrates the major gains that are possible if the NFSA is well implemented in the poorer States. These gains are amplified by PDS reforms, a mandatory adjunct of the Act. The PDS in West Bengal has been one of the worst in the country for a long time. Today, it is undergoing reforms similar to those that have been so successful in Chhattisgarh and were also adopted with good effect by neighbouring States such as Odisha and Madhya Pradesh. Hopefully, they will work in West Bengal too.

None of this is to say that all is well in West Bengal, or even just in Dhobargram. Some poor households in Dhobargram are off the list of ration cards, possibly because the SECC missed them, or because they were formed after 2011, or for some other reason. There are many cases of ration cards with missing household members (this matters since PDS entitlements are defined in per capita terms under the NFSA). Also, the new list of ration cards includes fewer Antyodaya households than the old list, a problem that has also emerged in other States. It will take skilful revision of the NFSA list to resolve these problems. But at least the NFSA has created a relatively sound framework within which this can be done.

Winds of change

Judging from brief enquiries in Jharkhand and Odisha, which are also in the process of rolling out the NFSA, there are similar developments there. The biggest challenge, responsible for the delayed rollout of NFSA in many States, is to identify eligible households. Even with near-universal coverage (86 per cent in rural Jharkhand and 82 per cent in rural Odisha), this is a daunting task. Jharkhand adopted much the same approach as West Bengal: an initial list of ration cards was prepared from SECC data (by removing better-off households), and later revised based on people’s complaints. The main problem with this approach is exclusion errors: there are gaps and mistakes in the SECC data, not always corrected by the complaints process. Odisha followed a different approach, based on self-declaration: ration card applicants had to certify that they met the eligibility criteria, and local functionaries were asked to verify their declarations. The main problem here seems to be inclusion errors: well-off households often get away with claiming that they meet the criteria. The self-declaration approach also requires a reliable administrative machinery — I doubt that it would have worked in Bihar or Jharkhand.

It is too early to tell which of these approaches is preferable. There are also alternatives, such as Madhya Pradesh’s pioneering attempt to link the PDS with a database of local residents (the Samagra register) maintained by gram panchayat functionaries. And of course, one can take the view that it is simply not worth taking all this trouble to exclude 10 or 20 per cent of rural households — universalisation is best, at least in the poorer States. What is clear is that we can do much better today than in the old days of “BPL surveys”. Among other remarkable improvements is the transparency of the entire process. Even in Jharkhand, the list of NFSA ration cards is available on the Net in a reader-friendly format, with all requisite details. That makes it a lot harder to cheat — gone are the days when the village head dished out BPL cards to his or her friends without any risk of scrutiny.

The effects of PDS reforms have also started showing in the poorer States. Recent surveys in Bihar and Madhya Pradesh point to remarkable improvements in the last few years. There is no reason why the NFSA latecomers (Jharkhand, West Bengal, Assam, among others) should fail to bring about similar change. Some of them, notably Odisha, actually initiated the process of PDS reform much before rolling out the NFSA, with very positive results. The laggards have their work cut out.

Looking forward

The picture emerging from recent research is quite different from the impression conveyed by media reports. The latter tend to focus on abuses and irregularities: for instance, the story of a wealthy mayor in Odisha who bagged a ration card, or of someone in Jharkhand who found that 366 ration cards had “inadvertently” been printed in his name. It is certainly part of the media’s job to highlight these anomalies, but the larger picture tends to get lost in the process. There is an urgent need for careful evaluations of the impact of NFSA in different States.

Looking ahead, all eyes are on Uttar Pradesh, one of the last States to implement the NFSA. With a foodgrain allocation of 10 million tonnes or so, and a very restrictive PDS under the old system, Uttar Pradesh has more to gain from the NFSA than any other State. But it is also one of India’s worst-governed States, if not the worst. Tremendous resolve will be required to break the nexus of corrupt middlemen who have milked the PDS in Uttar Pradesh for so many years (mainly under the APL quota, which is all set to be phased out). As election time approaches, it may just happen — that would be a victory of sorts, not only for food security but also for the battle against corruption.

Finally, it is important to remember that the NFSA is not restricted to the PDS. Other critical components include maternity entitlements, brazenly ignored by the Central government ever since the Act came into force. The PDS itself need not be confined to NFSA entitlements: in several States, some households are now eligible for subsidised pulses and edible oil as well. Perhaps for the first time, there are real possibilities of ensuring a modicum of nutritional support and economic security to all vulnerable households.

(Jean Dreze is a Visiting Professor at the Department of Economics, Ranchi University.)

Keywords: National Food Secuity Act, Public Distribution System, NFSA, PDS, Uttar Pradesh

Source: The Hindu, 13-01-2015

The Zero Hunger Challenge • United for a sustainable world

s it possible to ensure that all people at all times have access to sufficient, safe, nutritious and sustainable food?  This is the question that will open and challenge the World Exposition in Milan in 2015.   A question that was answered in a definitive manner by UN Secretary General Ban Ki-moon when he launched the “Zero Hunger Challenge”: we can eliminate hunger  in our lifetime.
Launched in 2012 during the Conference on Sustainable Development, Rio+20, The “Zero Hunger Challenge” presents the vision of a world free from hunger, where at the same time, it is possible to face the growing demand for food and meet new environmental challenges head on.

Expo Milano 2015 falls in a crucial year for the United Nations: not only will we review overall progress in meeting the Millenium Development Goals (the first of which is to eliminate extreme poverty and hunger), the new Post-2015 Development Agenda will also be adopted.  Expo Milano’s theme, “feeding the planet, energy for life” provides an ideal opportunity to foster dialogue and raise public awareness about food security and nutrition, rural development and the sustainable management of natural resources.   In order to maximize this impact, the UN has chosen the theme  “The Zero Hunger Challenge ∙ United for a sustainable world”, to make visitors understand that together we can build a world where everyone has access to safe, sufficient, and nutritious food, and can lead a healthy and productive life without compromising the needs of future generations.  

The challenge was not envisioned as a plan but rather as a call to action: eradicating world hunger is a goal that concerns everyone.  The objective of our presence at Expo Milano 2015 is to ensure that when discussing food and food production, the catastrophe of 795 million people who still suffer from hunger is not forgotten or left unmentioned.  
At least one in nine people worldwide go to bed hungry each day including over 160 million children who are stunted. Children who will not be able to develop and learn at the same rate as their peers who were properly nourished in the first fundamental one thousand days of life.  This is a scandal that to many seems destined to last, while in reality it can end. 

When talking about hunger, the only acceptable number is zero.  In order to achieve this goal, the Zero Hunger Challenge has proposed five elements:
1. Zero stunted children less than 2 years
2. 100 percent access to adequate food all year round
3. All food systems are sustainable
4. 100 percent increase in smallholder productivity and income
5. Zero loss or waste of food.

An integral part of all five elements, we have chosen to highlight the issue of women’s empowerment considering the fundamental role that they play in the fight against hunger and malnutrition.
In many countires, women represent the backbone of the agricultural sector and food systems and make up the bulk of the work force in the primary sector. Women also play a key role in guaranteeing food security for the whole family: when women suffer from hunger and malnutrition, so do their children.  Over 19 million children are born underweight each year. This is often a consequence of their mothers’ inadequate nutrition before and during pregnancy.
Despite this, around 60 per cent of those who suffer from chronic hunger are women.  This is due to the fact that women often do not have equal access to resources, education and income generation along with having a minor role in decision-making. 

For more information on the UN Secretary-General's Zero Hunger Challenge and how to join, consult the official United Nations Zero Hunger Challenge website by clicking here.  

Two-minute wake-up call

Nestle's resistance to the nationwide ban on Maggi noodles shows why the country needs an urgent policy on recall of harmful food products

THE FOOD Safety and Standards Authority of India (FSSAI) ordered a nationwide ban on all variants of Maggi noodles on June 5, leading to a massive food product recall—the biggest in the country so far. The recall was initiated after FSSAI authorities found lead beyond the permissible limit and monosodium glutamate without appropriate labelling in the popular two-minute noodles.

Food recall procedure involves removing a potentially harmful product from the market to ensure consumer safety and has been recognised as the most effective means of protecting public health globally. Earlier this year, FSSAI had ordered the recall of several energy drinks, including Monster and Restless, due to non-compliance with safety standards. But this was not part of any systematic food recall procedure in line with global practice. Unlike Western countries such as the US and European nations, India does not have an official recall policy, says Bejon Kumar Misra, an expert on consumer protection policy. Section 28 of the Food Safety and Standards Act, 2006, provides for recall of food products, but it does not specify necessary details, such as the role and responsibility of food business operators (FBOs), including manufacturers, retailers, importers and suppliers, timeline of the recall process, tracking of compliance and follow-up.

Recall policy a must

The absence of such critical guidelines explains why food companies such as Nestlé have acted less responsibly when it comes to safety standards. Despite excessive lead found in samples, Nestlé continues to maintain that Maggi noodles are safe and is contesting the recall order in court. This is in contrast to the recall of beef products in Europe by Nestlé in 2013 after finding horse DNA in two of its products. Unlike in India, the company took responsibility and apologised to consumers.

In some cases, recall has been voluntary—recall of Sunchips by Frito Lay’s and Special K red berries by Kellogg’s in the US this year (see ‘Back from the market’). Meanwhile, there have been 32 food recalls in Canada since March and 33 in the US since April. “In general, food companies voluntarily perform recalls when approached by government agencies. However, there have been a few instances when they have not and the government has been forced to take legal action to remove the products from commerce,” says Tony Corbo, senior lobbyist at Food and Water Watch, a Washington-based consumer rights group.

Draft gathers dust

FSSAI had developed rules for recall in 2009, but there has been no update. No FSSAI official was available for comment. In April this year, the apex food body issued a draft regulation, “Food Safety and Standards (Food Recall Procedure) Regulations, 2015” for public comments. It is open to the public for feedback till August 1.

The draft is a comprehensive document on the recall process. Addressing the common interest of industry, government and consumers, it clearly mentions possible reasons or triggers for a food recall, methods of recall communication and role and responsibilities of FBOs. The draft puts the onus of recall largely on FBOs, with the food authority, Central and state, acting as a supervisory body to monitor progress.

As stated in the draft, a recall can be initiated due to any complaint or public health hazard identified by the manufacturer, consumer or food authority. With little variation, the proposed regulations are broadly in line with features of recall procedures adopted by several countries such as the US, Canada and New Zealand.

While the draft incorporates most of international practices, it misses out on a few aspects that are integral to the international recall system. These include “recall classification”, which determines the level of hazard involved. Notably, the 2009 rules had such a provision. The latest draft also needs to be strengthened with respect to a safety alert system. The food authority should have a web-based facility to monitor the recall and keep the consumers informed. “Government recall mechanism needs to be more transparent,” says Devinder Sharma, a food and trade policy analyst. An example of such a transparent facility is Europe’s Rapid Alert System for Food and Feed. It details the list of product recalls that have taken place, product type, category, notification date, reasons of alert, hazards and action taken.

India urgently needs a comprehensive document on food recall and FSSAI should finalise the proposed draft without much delay. “Product recall is a logical step in the regulatory system. Unfortunately, the Indian regulatory system is weak,” says politician Brinda Karat.

J P Dadhich, sub-regional representative, International Baby Food Action Network, a global network of organisations, welcomes FSSAI’smove, saying it is a step in the right direction. “The challenge now is to finalise the guidelines quickly and implement them effectively,” he says.

Sharma notes that the recall of Maggi should serve as a wake-up call not only for the government but also industry. Considering the huge number of food products available in the markets today, increasing cases of contamination and growing globalisation of food and food chains, India needs to have a system in place wherein an unsafe product can be timely put out of consumers’ reach, a system that can tell the end consumer in the remotest parts of the country about the risks associated with unsafe but available food.

Food security Act: Centre to share half the burden of states in food transportation and handling

The Centre has decided to share up to 50 per cent of the intra-state transportation and handling costs of foodgrains with states under the National Food Security Act (NFSA), 2013. NFSA guarantees cheap foodgrains to two-thirds of the Indian population.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday approved the expenditure and sharing pattern between the Centre and states.

“Earlier, the transportation and handling cost was transferred to the consumers. But now because of NFSA, the cost would be borne by the government,” a government official told Down To Earth.

It has also been decided to pay incentives to fair price shop (FPS) dealers to encourage the use of point of sale (PoS) devices. These are machines that enable cashless transfers by swiping cards.

Under the Act, the fixed price of rice, wheat and coarse grains stands at Rs 3, Rs 2 and Re 1 respectively. Before NFSA came into existence, Below Poverty Line (BPL) families used to get rice, wheat and coarse grains at Rs 5.65, Rs 4.15 and Rs 3 respectively. For Above Poverty Line (APL) households, the rates were Rs 8.30, Rs 6.10, and Rs 4.50 respectively.

Implementation of NFSA
The Act should have been implemented within six months since its enactment in September, 2013. However, so far, NFSA has been implemented in only 11 states and Union Territories (UTs) across the country.

The implementation of NFSA in 25 other states had to be extended twice because of the non-compliance in identification of beneficiaries on time. At first, it was extended to April 4, 2015 and now it has been extended to September 30, 2015.

“Because of the nitty-gritty, many states have not rolled out this Act. They are showing unwillingness,” the official added.

Sharing the burden
The estimated financial assistance likely to flow to states and UTs would annually stand at Rs 4,341 crore after the Centre shares the costs. At present, the estimated burden on the states’ exchequers is around Rs 8,500 crore.

According to the decision, the Union government will share the expenditure up to 50 per cent in case of general states and 75 per cent in case of 13 special category states and UTs.

The latter includes seven north-eastern states, Sikkim, Himachal Pradesh, Jammu and Kashmir, Uttarakhand and the UTs of Andaman and Nicobar Islands and Lakshadweep.

The Centre has not taken any decision regarding cash transfer as yet. However, it has decided to pay incentives to FPS dealers worth Rs 17 per quintal of grains for using PoS devices.

The decision would pave the way for documentation of the Public Distribution System (PDS), which will help the government to reduce leakages and curb corruption. 

Food production cannot ensure food security, says FAO head

Increasing production has for long been seen as the natural pathway to ending hunger, but today even though the world produces enough food to feed everyone, hunger remains a problem, the head of the United Nations Food and Agriculture Organization (FAO) said at the International Forum on Agriculture and Climate Change, held in Paris on February 20. At least 805 million still go without enough food on a regular basis, pointed out FAO Director-General José Graziano da Silva.

"Since food production is not a sufficient condition for food security, it means that the way we are producing is no longer acceptable," said Graziano da Silva. “What we are still mostly seeing is a model of production that cannot prevent the degradation of soils and the loss of biodiversity, both of which are essential goods, especially for future generations. This model must be reviewed. We need a paradigm shift. Food systems need to be more sustainable, inclusive and resilient," he added.

Agriculture has a potentially large role to play not only in guaranteeing food security but also in building resilience to the affects of climate change and in reducing humankind's emissions of global warming gases, according to the FAO head. “The impacts of climate change are no longer an anticipated threat. They are now a crystal-clear reality right before our eyes,” he warns, adding: “Climate change will not only affect food production but also the availability of food and the stability of supplies. And in a global, interdependent economy, climate change makes the global market for agricultural products less predictable and more volatile."

In his remarks, the FAO Director-General underscored the important role played by healthy soils. "Soil hosts at least one quarter of the world's biodiversity and is key in the carbon cycle. They help us to mitigate and adapt to climate change," he said. 2015 has been designated by the UN General Assembly as the International Year of soils, and FAO is the lead agency for coordinating the year's activities.

A flawed approach to food security

With India continuing to be plagued by malnutrition, it is foolhardy to use the changed food production situation in the domestic economy as a reason for dismantling the FCI

Within months of assuming office, the BJP-led National Democratic Alliance government set up a High Level Committee (HLC) in August 2014 to restructure, reorient and reform the Food Corporation of India (FCI). The eight-member HLC was chaired by senior BJP leader, Shanta Kumar, and included prominent economist Ashok Gulati. On January 22, 2015, the HLC submitted its report to the government and made its recommendations public.

In the short run, the committee recommends that the National Food Security Act (NFSA) 2013 be curtailed. In particular, the NFSA entails providing subsidised food to about 67 per cent of the population, and the committee recommends that the coverage be brought down to 40 per cent. In the medium run, the committee recommends that the current public distribution system (PDS) be replaced by a cash transfer system. This will mean that the state will no longer have to be responsible for distributing food to vulnerable sections of the population. Hence, the state will no longer need to procure food from farmers, and store it. Since the current system of procurement, storage and transportation is primarily managed by the FCI, the medium term vision of the HLC implies that the FCI can, in due course, be folded up.

The overall thrust of the HLC’s recommendations, if implemented, would whittle down the operation of the FCI in the short run and completely dismantle it in the medium run. The HLC has advanced two broad set of arguments as justifications for its recommendations. Critical scrutiny shows that both are fallacious.

Changed situation

The first set of arguments of the HLC relates to changes in the situation in the country as regards food production and consumption since the crisis period of the mid-1960s. Today, India produces more food grains than it consumes, even exporting substantial amounts to the world market. It has a large public stockholding of food grains and is comfortably placed as regards foreign exchange reserves. All this is in stark contrast to the situation in the mid-1960s. Moreover, consumption patterns of households have displayed a shift away from cereals. This changed situation, in the opinion of the HLC, calls for a change in the role of the FCI.

“Excessive stocks of food grains on the one hand, and prevalence of widespread hunger and malnutrition on the other, call for an expansion of the PDS operations”

The HLC, however, has ignored the fact that India continues to be plagued by large scale hunger and malnutrition. Data from the National Sample Survey (NSS) shows that in 2009-10 the vast majority of the population was consuming less than the 2010 Indian Council of Medical Research calorie norms. If we look at trends over time, the same data also shows that average calorie and protein intake have declined over the past few decades. Evidence on more direct measures of under-nutrition – like the proportion of underweight and stunted children – are equally grim.

Fulfilling its objectives

Given these well known facts and trends on hunger and malnutrition, it seems foolhardy to use the fact of a changed production situation in the domestic economy to argue for the dismantling the FCI. A more sensible route would be to use increased domestic production to directly address the problems of hunger and malnutrition. In this strategy, the FCI is bound to play a more rather than less important role.

The second set of arguments given by the HLC as justification relate to the claim that the FCI has not been fulfilling its three key objectives in recent years: providing price support to farmers, delivering food through the PDS, and reducing volatility of food prices (and addressing food security) through public stockholding. According to the HLC, failure to meet the objective of providing price support is shown by the fact that in 2012-13 only six per cent of agricultural households sold any food grains to procurement agencies. Failure on the PDS front is attested by massive leakages from the system. Food grains rotting in FCI warehouses highlight the failure of the system of public stockholding.

The fact that only six per cent of agricultural households sold paddy or rice to any procurement agency in 2012-13 is really striking. The Situation Assessment Survey of Agricultural Households conducted by the National Sample Survey Organisation during the 70th Round (2013) of the NSS – the data source that allowed the HLC to compute the figure of six per cent – shows why. The NSS data reveals that the vast majority of agricultural households were not aware of the existence of minimum support price (MSP), and an even larger proportion were not aware of procurement agencies (about 80 per cent for paddy and 70 per cent for wheat). Of the households that were aware of MSP but did not sell to procurement agencies, a large proportion did so for lack of procurement infrastructure at the local level. Moreover, if we go back 10 years and look at data from the previous (and first) Situation Assessment Survey of Farmers in 2003, we see a large variation across States in awareness of MSP, with Haryana, Kerala, Punjab and Tamil Nadu showing high awareness.

One can see that the reason for low use of procurement is lack of information. The other reason is lack of enabling infrastructure at the local level. States which have managed to put such infrastructure in place and disseminate information about procurement saw greater participation. Thus, the HLC’s conclusion that the procurement system is not working is misleading.

The second claim of the HLC is that the PDS is a failure because of massive leakage. But, what do we know about the extent of leakage, its spatial and temporal patterns?

The existing literature on PDS in India has highlighted three important patterns. First, there is a secular decline in leakage over the past decade. Second, there is a large variation in the extent of leakage across states with some States like Andhra Pradesh, Himachal Pradesh, Karnataka, Kerala and Tamil Nadu consistently reporting low leakage. Third, and more interestingly, many States like Bihar, Assam, Chhattisgarh, Jharkhand and Uttarakhand, have improved considerably over time with respect to leakage from the PDS. The conclusion that would be consistent with the findings of this literature is not that the system needs to be dismantled but that the strategies adopted by successful states are replicated in the other States.

The third claim of the HLC is that the FCI has ended up with excess stocks of food grains. Since storage of food grains is costly, it represents a waste of resources that could have been used elsewhere and in more productive ways. We agree with this and would go further to argue that excessive stocks of food grains on the one hand, and prevalence of widespread hunger and malnutrition on the other immediately call for an expansion of the PDS operations.

To sum up, neither the changed situation with respect to domestic food production nor the functioning of the FCI with respect to meeting its key objectives lends credence to the argument that the FCI, and with it the whole food management system, needs to be curtailed.

(Deepankar Basu is assistant professor in the Department of Economics, University of Massachusetts Amherst, U.S., and Debarshi Das is associate professor in the Department of Humanities & Social Sciences, Indian Institute of Technology, Guwahati.)

Keywords: National Sample Survey, Food Corporation of India, Food Security Act, High Level Committee, PDS operations, National Food Security Act 2013

Jan 22 2015 : The Times of India (Delhi)

Cut food security coverage to 40% from 67% of popn: Panel

Dipak Kumar Dash & Surojit Gupta

New Delhi: TNN





The government should reduce coverage under the National Food Security Act (NFSA) to 40% of the population from 67% and defer implementation of the scheme in states which have not complied with the rollout conditions, a panel appointed by Prime Minister Narendra Modi has recommended.The panel headed by for mer food minister Shanta Kumar submitted the report to the PM on Wednesday. Re forming the subsidy regime is a key plan of Modi's economic reforms.
It has recommended far reaching changes in the functioning of the state-run Food Corporation of India and the minimum support price (MSP) regime. It has suggested that the foodgrain under NFSA for those below the poverty line should be raised to 7kg per person from the current norm of 5 kg. A panel headed by former food minister Shanta Kumar has called for moving to a direct cash transfer regime for food subsidy and estimated that the savings on food subsidy could be as much as Rs 30,000 crore per year. “Move to cash transfer and start with 53 million-plus cities.The states which are deficit in grains should be given the option of either grain or cash,“ said a source.
The panel has also suggested that fertilizer subsidy should be paid to farmers directly on per hectare basis which comes to around Rs 7,000 per hectare. “This will result in saving nearly Rs 10,000 to Rs 15,000 crore annually in fertilizer subsidy ,“ the source said. There should be a liquidation policy which will kick in immedi ately when the stocks go beyond the buffer stock limit. At present, FCI sells in open market or exports after approval cabinet which some experts say raises its carrying cost. “FCI should get a free hand,“ the source said.
The panel has recommended that the name of FCI be changed. “The new of FCI will be akin to an Agency for Innovations in Food Management System with a primary focus to create competition in every segment of food grain supply chain, some procurement to stocking to movement and finally distribution in public distribution system so that the overall costs of the system are substantially reduced, leakages plugged and it serves large no of consumers and farmers,“ the source said.
For the full report, log on to http:www.timesofindia.com

Dec 01 2014 : The Economic Times (Delhi)

Don't Wait for WTO to Reform Food Subsidy





It is highly significant that all 160 member countries of the World Trade Organisation have reached consensus on what would be the first global agreement on trade liberalisation in two whole decades, that on trade facilitation and easier customs procedures. The deal would reduce transactions costs, red tape, and corruption at sea ports and cargo airports, by standardising norms, improving logistics and reducing delays in the movement of goods. Trade experts estimates that global incomes could rise by as much as $2 trillion.India did succeed in stalling the deal by several months on the issue of subsidy expenditure on food security; it has now been agreed that food stockholding programmes in the devel oping world will not be subject to WTO dispute procedures, until a permanent agreement is arrived at a later date. Note that in the Bali ministerial last December it was decided that there would be a four year window for the purpose, but there would now be no such deadline. Yet the Modi government needs to promptly reform our high cost food subsidy regime and the effective nationalisation of grain stockholding and attendant trade, with its cost-plus padding and routine inefficiencies. One recent report mentioned how FCI loaders earned up to Rs 4 lakh per month thanks to generous overtime payments. What is desirable is higher stockings for private trade, and streamlining of public grain procurement to avoid distress sales.
In tandem, we need to purposefully boost trade in both goods and services, to realise huge economic gains. It would be extremely costly to be trade-myopic. The WTO, instead of always seeking unanimity , should actually be seeking more pluri-lateral agreements among like-minded nations, with others welcome to sign on at a later date.

MAINSTREAM, VOL LII, NO 48, NOVEMBER 22, 2014

Does the India-US Bilateral Agreement on Food Security Matter?

Saturday 22 November 2014, by Kavaljit Singh

After months of stalemate, India and the US have agreed to resolve their differences over food stockholdings which would open the way for future implementation of the Trade Facili-tation Agreement (TFA) of the WTO—the biggest trade deal in its entire history.
On November 13, 2014, Nirmala Sitharaman, India’s Minister of State for Commerce and Industry, issued a statement announcing a bilateral agreement with the US. “We are extremely happy that India and the US have successfully resolved their differences relating to the issue of public stockholding for food security purposes in the WTO in a manner that addresses our concerns. This will end the impasse at the WTO and also open the way for implementation of the Trade Facilitation Agree-ment. We are confident that the membership will take the matter forward in the WTO in a constructive spirit,” she said.
The US Trade Representative, Michael Froman, also welcomed this agreement with India which “reflects shared understandings regarding the WTO’s work on food security”. However, both countries have refused to share the finer details of the agreement. Hence, one cannot analyse the pros and cons of the agreement at this moment.
The Peace Clause
According to media reports, the two countries have agreed that the peace clause—which protects member-countries (breaching farm subsidy caps under the Agreement on Agriculture) from being challenged under other WTO agreements—will continue indefinitely till a permanent solution is found by the WTO. The US has agreed to India’s demand to rewrite the entire peace clause of the Bali Agreement so that it gives adequate protection to member-countries against legal challenge in case farm subsidy caps are breached.
In July 2014, India had refused to ratify the TFA on the ground that the text of Bali Ministerial Declaration is not clear whether the country could continue its food subsidy programme beyond 2017. India wants to modify the text to ensure that the interim agreement arrived in Bali extends beyond 2017, in case no permanent solution on food security is reached.
India will share its proposal at the WTO’s General Council at its upcoming meeting (scheduled in December 2014) in Geneva. The Indian Government expects that this agreement with the US would put new pressure on those member-countries of the WTO who had disproved its concerns earlier. The government expects that the General Council would endorse its proposed rewording of the peace clause and thereafter multilateral talks on implementing the TFA and amending the Agreement on Agriculture would proceed ahead.
The Importance of National Food Security
Food security is a politically sensitive issue as more than a quarter of the world’s hungry live in India. The right to food is enshrined in the Indian Constitution and New Delhi spends more than $ 60 billion annually on price support to farmers, input subsidies and public food distribution system. The government views stockpiling as an important component of its food security programme. Although India has not yet breached subsidy caps, the government is duly concerned over the possible breach of caps in the case of wheat and rice in the near future.
For the past many years, India has been demanding a review of the outdated farm subsidy rules of the WTO which base subsidy calculation on reference prices of 1986-88 while food prices have increased manifold in this country and elsewhere since then. It is interesting to note that this issue was taken up at the Bali Ministerial Conference in December 2013 only after it was linked to the Trade Facilitation Agreement.
The Timing
Nevertheless, the timing of this bilateral breakthrough is very important. This deal came just two days before the G-20 Summit in Brisbane (Australia) where leaders were expected to discuss the progress on the post-Bali work programme (especially the TFA) of the WTO. Undoubtedly, this deal has rescued the World Trade Organisation from potential irrelevance after the repeated failures of multilateral trade talks since 2008 besides the growing proliferation of bilateral and plurilateral agreements throughout the world. In sum, it has added a new momentum to multilateral trade negotiations at the WTO.
Politically speaking, the bilateral agreement with India could be seen as the third major victory for the US President Barack Obama, following the US-China pact to cut tariffs on IT products and an agreement with China on carbon emissions signed this week. By securing these agreements, Obama has firmly asserted the leadership of the US in advancing the global trade agenda and attempted to silence his critics at home.
The Prime Minister, Narendra Modi, has portrayed this pact as a major victory at home and at his first G-20 Summit in Brisbane. It is a win-win situation for both political leaders as they together initiated this process during Modi’s visit to Washington in September 2014.
Still Some Questions
What chance of success at the WTO? After all, it is an agreement between just two member-countries of the WTO. Of course, there is no guarantee that the rest 158 members of the WTO (especially the European Union and an Australia-led group of more than two dozen countries) may accept India’s proposal to modify the Bali Agreement text and fall in line. As these member-countries had no say in the delibe-rations between India and the US, they may question the sanctity of such bilateral deals without their knowledge and participation.
Some may even question whether a bilateral deal is the best approach to resolve differences over farm subsidy issues at the WTO—the legal and institutional framework of the multilateral trading system. Hence, some scepticism is obviously warranted.
Kavaljit Singh is the Director of Madhyam, a policy research institute based in New Delhi. The Madhyam website is www.madhyam.org.in

Nov 14 2014 : The Times of India (Delhi)

India-US food security deal vital breakthrough: WTO DG, EU

New Delhi: TIMES NEWS NETWORK





World Trade Organization (WTO) DG Roberto Azevêdo on Thursday welcomed the news that the US and India have agreed on the way forward for implementing key elements of the package of agreements reached last December at the WTO ministerial conference in Bali. Different views on the implementation of two of these accords, the Trade Facilitation Agreement and the decision on Public Stockholding for Food Security Purposes, created an impasse in July , which has led to a freezing of WTO negotiations since then.“The India-US agreement provides a basis for the director-general to intensify his consultations with other WTO members on the best way to overcome the present stalemate and to promptly implement all Bali ministerial decisions,“ Azvedo said in a statement.
“This breakthrough represents a significant step in efforts to get the Bali package and the multilateral trading system back on track. It will now be important to consult with all WTO members so that we can collectively resolve the current impasse as quickly as possible,“ he said.
The European Union termed the India-US deal as an important breakthrough.
“We have achieved an important breakthrough which will lead to the full implementation of the landmark Bali package, including the Trade Facilitation Agreement, the first global trade deal agreed in the World Trade Organization (WTO). I welcome the news that the US and India have resolved their differences on this issue. Together with the recent progress in negotiations on the expansions of the Information Technology Agreement (ITA), today's breakthrough on the Bali agreements demonstrates that the WTO can deliver meaningful trade liberalization results which will greatly contribute to the growth of the global economy ,“ said EU trade commissioner Cecilia Malmström.
The WTO DG said implementation of all aspects of the Bali package would be a major boost to the WTO, enhancing the ability to deliver beneficial outcomes to all members of the trade block.
“Advancing our work toward a permanent solution on public stockholding and the implementation of the Trade Facilitation Agreement, including its provisions for technical assistance for developing countries, will be integral to this work. I will also continue to ensure that LDC (least developed country) issues are given the prominence they deserve“, he said.
While stressing that the India-US understanding would represent a major step forward, Azevedo stressed that members would need to redouble their efforts in order to minimize the delays provoked by the impasse on the conclusion of the post-Bali work program.

Now, an Innovation to Curb Food Wastage

Micro Cold Storage, a farm-level solar cold storage system developed by Vivek Pandey from the Indian Institute of Technology, Kharagpur, and Rahul Sharma from IIFT, has been adjudged as the winner in the renowned national university competition as part of Dupont’s ‘Power of Shunya’ programme. In an interaction with Poulami Chakraborty of ENN, Vivek talks about the ways that this innovation can address the issue of food wastage and plans to market the product

Please discuss the salient features of your research on Food Wastage reduction.Over 30 per cent of fruits and vegetables are wasted annually in our country, which is worth an amount of 12 billion USD annually. As a result, there is a 60 per cent deficit in the current cold chain infrastructure. Of the available infrastructure with us, 75 per cent of the available storage facilities just cater to potatoes. Farmers lose on their deserved remuneration as well because they are forced to sell their produce to the middlemen because they do not have access to infrastructure for storage. In India, over 30 per cent of food is wasted due to lack of proper storage facilities. Despite being among the top producers of fruits and vegetables, the per capita availability of horticulture commodities in India is woefully low. Further, the unavailability of conventional power sources in the distant farms of India’s hinterland makes on-farm storage impossible for farmers to preserve their harvest. It was this insight that led us to develop Micro Cold Storage, which is an affordable onfarm cold storage device.

Recent statistics reveal that India wastes food worth `44,000 crore every year. How do you see this innovation revolutionising the scenario towards curbing food wastage?The product is an on-farm solar cold storage. It fits the value chain of crops right at the farm level where maximum wastages are there. At the same time, it ensures deserved remuneration to the farmers.
The product can work in areas with no electricity with reliability. It is lower in comparison to any product that may use solar panels to run a conventional cold storage. The product suits the requirement of farmers, cooperative, farmer producer companies, village level entrepreneurs and supply chain players curbing wastages at each node of the food value chain hence making significant impact in terms of food security and livelihood.

What is the scope of promotion and USP of your innovation when it comes to generating revenue in Indian market? What are your plans for expanding this innovation to foreign countries?As a developing country, India has immense potential for this innovation. We are attracting a lot of demand because of the merit of the product and its ability to solve the problem on ground very effectively. Our USP is the high operational efficiency and minimal running cost because of several innovations for the product makes us competitive.
Similar to the Indian context, the product fits very well in any other developing country with a problem of electricity. In developed countries where though power availability is not a problem, the product can fit in the food value chain with usage of clean technology thereby impacting the climate at large.

What is the potential of marketing and revenue generation that this innovation has from the Indian market?Given the need and the demand, the innovation has a huge revenue generating potential. We are already creating strategic channels to market this product in a geography and customer-centric mode.

What are the challenges that you faced while researching on this innovation?The primary challenge was identifying the type and configuration of the system a typical customer would want. We conducted extensive market research in various areas including UP, Haryana, Maharashtra, Orissa, Karnataka and a few other areas to understand what a prospective customer would want. Then, taking the idea from a concept stage to a stage where the product can work hassle free for a customer took a lot of design iterations.

What is your opinion about the potential of this kind of talent show-case seminars which brings forth newer innovation? What scope do they reveal for students?The shows provide an amazing platform for showcasing the innovations which are solving such critical problems. At the same time, it encourages the youth/ students to take up challenges and implement their learning for better future. While the start-up culture in India mostly revolves around web/Internet-based innovations, it is critical to showcase innovations that are key to development of the country.

- See more at: http://digitallearning.eletsonline.com/2014/10/now-an-innovation-to-curb-food-wastage/#sthash.8YW3o9aG.dpuf

ep 24 2014 : The Economic Times (Delhi)

Don't Nationalise the Food Economy





Allow private trade to play a bigger role

Food minister Ram Vilas Paswan says the government will raise the subsidised food grain entitlement per person to 7 kg from 5 kg a month. That would be a mistake. Relying on the public distribution system to achieve food security is tantamount to nationalisation of the food economy. It will only increase the government’s distorting dominance in the grain market, push up the subsidy bill and feed food inflation. Instead of being the largest and most inefficient hoarder of grain, the government should let private trade procure, store and distribute grain.The Food Corporation of India (FCI) should maintain only a minimum security buffer. This will entail keeping the minimum support price (MSP) separate from and below the procurement price. Paswan admits that it is a challenge to store grain and check leakages in transportation and distribution. Grains stored in the open rot, and excess stocks raise carrying costs of the FCI.
The government should revamp the FCI, shot through with corruption and inefficiency, to usher in a competitive market for grain. It will bring down leakages and lower grain prices. Also, the consumption subsidy should be transferred as cash to consumers. They can use the money to buy grain from competing outlets, including fair price shops, and competition will keep costs down. It will also help cut out inefficiencies of the FCI such as loader salaries of .
`1 lakh a month. However, there are fears cash transferred to the male in a household can be diverted for liquor.
Such fears are not entirely misplaced and, therefore, the government can transfer cash to women’s bank accounts. Their bank accounts should be linked to Aadhaar, or the unique identity number.
States such as Tamil Nadu offer cooked food to the poor as part of food security. It’s not a bad idea, given the economies of scale to be realised in storage and processing of food. However, food security is not only about distribution of food. The focus should be to raise farm output and enhance efficiency across the board. That means moving away from subsidy to investment in the farm sector.

Jul 26 2014 : The Economic Times (Delhi)

India Presses Food Security Button at WTO Meet

NEW DELHI OUR BUREAU





Won't back trade protocol unless concerns addressed

India stuck to its guns at the World Trade Organization in defiance of developed nations with a strongly worded statement at the general council meeting in Geneva on Friday that it will not agree to any accord on trade facilitation unless food security issue is also taken up, signalling its intent to take a hard stand on July 31, the deadline by which a decision has to be made.Instead, India has suggested a four-point action plan that seeks to deliver by December 31 a complete package on agreements reached at the Bali ministerial that includes trade facilitation, a package for least developed countries and public stocking for food security. The hardening of India's stand emerged after the new government took stock of the situation earlier this week.
Rattled rich countries have hit back at India, accusing it of going back on what was signed in December 2013 at Bali, a charge India has strongly countered.“The EU is not ready to renegotiate basic elements or timelines that were agreed as integral part of the Bali package,“ the European Union said, indicating a heightened risk of a stalemate or talks unravelling.
Another delay looms, an expert said.
“WTO goes by consensus and with India along with the other African, Latin American countries not agreeing to sign the trade facilitation protocol, it will have to get deferred,“ said Biswajit Dhar, professor at the Jawaharlal Nehru University.
It is by no means clear what will happen next, said a person present at the general council meeting, adding that the atmosphere was very tense.
“It will be suicidal, absolutely.
And that's not a threat, that's just a statement of fact,“ one Western diplomat was cited as saying by Reuters. “They say we're going to get what we want or we'll blow everything else up, but if they do that they won't even get what they want.“India said the concerns of poorer nations needed to be addressed.
“To fully understand and address the concerns of members on the TF (Trade Facilitation) Agreement, my delegation is of the view that the adoption of the TF Protocol be postponed till a permanent solution on public stockholding for food security is found,“ India said at the general council meeting, adding that that it was disappointed by the lack of similar urgency shown on issues of importance to the developing countries.The trade facilitation agreement seeks to cut down red tape in global trade that some studies say could add $ 1 trillion to the global economy.At the Bali ministerial in December, WTO members had agreed to pursue trade facilitation, a solution to the issue of public stock holding for food security and a package for least development countries.
India's food security law, which is based on massive government procurement from farmers and distribution to poor at subsidised prices, runs the risk of violating WTO rules that prescribe a limit on farm subsidies at 10% of output.
The country has budgeted Rs 1.15 lakh crore for food subsidies in the current year.
“India is of the view that the Trade Facilitation Agreement must be implemented only as part of a single undertaking including the permanent solution on food security,“ New Delhi said in its submission, accusing the developed world of not having the “will to engage in areas of interest“.
The G-33 countries, a group of developing nations, want a complete exclusion of subsidies given on account of public stockholding programmes from the category of actionable subsidies at the WTO. This will require amendment to the WTO Agreement on Agriculture to allow countries to procure food grain from poor farmers at minimum support prices and sell to poor people at subsidised rates through public distribution systems.
India said timelines were important but there cannot be undue haste.“The Bali outcomes were negotiated as a package and must be concluded as such,“ it said. “This is important so that the millions of farmers and the poor families who depend on domestic food stocks do not have to live in constant fear. To jeopardise the food security of millions at the altar of a mere anomaly in the rules is unacceptable.“At the same time, India said it was fully committed to the decisions taken at Bali.
“Having signed on to the ministerial decisions in Bali, let there be no doubt about India's commitment to those decisions including the Trade Facilitation Agreement. All we are asking is that the public stockholding issue as well as other decisions of Bali be taken forward in the same time frame as trade facilitation,“ India said.
An Indian commerce department official justified India's stand saying that any accord should not ignore the interests of the poor.“We can defer the time. Timelines are important, but they are not sacrosanct at the cost of the interest of a large (amount of) humanity which lives below the poverty line. We are not saying that we want to postpone it to eternity, no, not at all,“ the person said.
India sought immediate establishment of an institutional mechanism such as a dedicated Special Session of the Committee on Agriculture to find a permanent solution on public stockholding for food security.