NEW DELHI: The National Food Security Bill (NFSB), in its present form, throws up major operational and financial challenges and would have enormous ramifications on the cereal economy, markets and the farm sector, a government paper has said.
The discussion paper by the commission for agricultural costs and prices (CACP) said the long-term feasibility of the strategy under NFSB needed to be carefully analyzed and debated in the national interest.
The CACP is an entity under the ministry of agriculture which advises the government on price policy for major farm commodities.
The paper comes at a time when Congress president Sonia Gandhi has said that the food security bill would be brought to Parliament soon.
"It is imperative that a holistic approach is adopted while analyzing the entire system of food production, food procurement and distribution of food for achieving food security on sustainable basis," the paper authored by CACP chairman Ashok Gulati and six others drawn from various fields including CACP said.
The authors said the discussion paper series by CACP was an attempt to encourage unbiased discussion on critical issues affecting the agricultural sector and food security. However, they made it clear that the views belonged purely to the authors and did not reflect the views of the organizations they belonged to.
The paper said it was important to ensure adequate availability of grain with the public authorities to fulfill the underlying obligation in the bill.
"Given the current trends and volatility in rates of growth in food grain production and yields, the growing pressures on land and water in the wake of climate change, dependence on monsoon rains — there is a possibility that food grain availability on sustainable and stable basis would require lot of government intervention in augmenting production, enhancing procurement, and stocking large amounts of grains to meet the commitments of food distribution," the paper said, adding that this may have several undesirable side effects.
It said that any further procurement by the state would crowd out private sector operations and this would have an adverse effect on overall efficiency of procurement and storage operations, as well as on magnitude of food subsidies and open market prices.
The government already procures one-third of the cereals production (which amounts to almost half of marketed surplus of wheat and rice).
"This would also slow down or even regress the process of overall diversification in agriculture, and go contrary to the emerging demand patterns in the country," the paper said, referring to any fresh increase in procurement.
It said the food subsidy in coming years will balloon due to the lower central issue price of grain, a significant rise in the number of entitled beneficiaries and the need to keep raising the minimum support price (MSP) to cover the rising costs of production and to incentivize farmers to increase production of cereals.
The document said the existing food security complex of procurement, stocking and distribution would further expand and increase the operational expenditure of the scheme given its creaking infrastructure, leakages (which amount to about 40%) and inefficient governance.
"This raises not only the issue of sustainability of the financial obligations entailed in NFSB, but also its efficacy in trying to extend food security," the paper said.
Enormous impact of Food Security Bill on farm sector: Panel
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Enormous impact of Food Security Bill on farm sector: Panel
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Enormous impact of Food Security Bill on farm sector: Panel
