The National Food Security Bill 2011, the draft of which has been accepted by the Cabinet, is broadly in line with the recommendations of the National Advisory Committee and a bit too ambitious, given the limited resources and limited government capabilities. Although the government Bill has marginally whittled down coverage by targeting 50% of the urban household?the same as recommended by the NAC?but reducing the rural coverage from the 90% recommended by the NAC to a more realistic 75%, the government Bill sticks with the NAC guidelines of classifying 46% of the rural household and 28% of the urban households as priority households with substantially larger entitlements and at lower prices. Thus, while the government Bill fixes the entitlement of priority households at 7 kg per person per month as recommended by the NAC, it only marginally reduces the entitlement to general households to 3 kg per person per month, which is only a bit lower than the 4 kg per month norm prescribed by the NAC. And when it comes to pricing, the government Bill goes completely by the NAC recommendations. Thus, the per kg cost of rice/wheat and millet for priority households is fixed as R3/2 and R1, respectively, while the prices charged to general households would not exceed more than 50% of the minimum support prices paid by the government to the farmers.
The first major constraint of such an extensive coverage is the inadequate foodgrains. As pointed out by the PMEAC, the total quantity of grain for such a massive entitlement scheme will be in the 54-59 million tonne range and may even go up to the 59-64 million tonne range if the offtake goes up to 100% because of the substantially lower prices. This is much more than the 49-56 million tonnes of foodgrain requirement estimated by the NAC. The PMEAC then points out that there are additional requirements of 8 million tonnes for various other welfare programmes and another 6 million tonnes as food security reserve. All these would push up the overall food requirements for the welfare schemes and other needs to the 70-80 million tonne range. Procurement of such large stocks will create various problems, like a sharp decline in open market availability of grains, storage problems and also substantially raise food subsidy costs. Apart from this, there are also the perennial problems like the identification of the deserving poor and the issues of the large leakages from the PDS system, which would only further compound the constraints thrown up by the food security Bill.
