Last September, inflation, as indicated by the wholesale price index, rose to a seven-month high of 6.46 percent. Food inflation was at 18.4 percent, and was led by skyrocketing onion prices, which increased by a whopping 323 percent. While the Union Minister for Agriculture, Sharad Pawar, ascribed the phenomenon to nothing more than a seasonal shortage, practices such as cartelisation, hoarding and price manipulation (all common in the industry) are more likely responsible. The fact that Pawar's Nationalist Congress Party traditionally holds sway in Nashik, which handles 70 percent of India's onion trade, may explain his reasoning. Whatever the causes, if even the well-heeled cannot at times afford basic ingredients such as onions, one may ask in perfect seriousness – and without inviting ridicule – what, if anything, are the poor expected to eat?
In this context, the passage in early September 2013 of the National Food Security Bill in both Houses of the Indian Parliament is good news. The National Food Security Act (NFSA), as it is now known, has been hailed by some as a revolutionary step towards addressing hunger and malnutrition in India, while others have seen little more than rank opportunism in its pre-election promulgation. Over 300 amendments were made to the Bill, most of them to expand its scope through a universalised Public Distribution System (PDS) covering pulses, oil, salt and staple grains, and introducing schemes such as community kitchens for the destitute.
Not surprisingly, the NFSA has been savaged by many mainstream economic experts who label the plan 'unaffordable'. Some have propagated fears that the Act will actually harm the economy and result in crores of rupees 'down the drain' due to the high levels of leakage and waste occurring in the existing PDS. The validity of these 'concerns' is, however, questionable. Indeed, those doubting the Act's economic viability do so based on erroneous calculations and the absurd assumptions on which they are premised. Contrary to the Union Food Minister K V Thomas's estimate that the annual food subsidy will increase to 1.3 percent of GDP, for example, economist Surjit S Bhalla projects the cost to rise to 3 percent of GDP. Bhalla's figures are, however, based upon applying the average consumption of PDS beneficiaries to the entire population, most of which do not use the service. Moreover, whether projected economic losses due to leakage could be avoided simply by addressing existing lacunae through institutional reforms (as has been successfully carried out in Tamil Nadu and Chhattisgarh) is a question that needs to be asked. But even if the challenges of storage, distribution and corruption are addressed effectively and the fears of its strongest detractors allayed, there are many reasons as to why the NFSA cannot be termed 'revolutionary' in any meaningful sense.
Ignoring for a moment the benefits it might bring to the consumer, what – if at all anything – the NFSA means for producers in India's crisis-ridden agri-sector is unclear. If events at a December meeting of the World Trade Organisation (WTO) in Bali are any indication, the Act does not bode well for the Indian farmer. The overturning of India's provision of subsidies on staple food crops – against stiff pressure from other developing countries – represents nothing but an abject succumbing to US pressure and the dispensations of the Global North, making any of the Act's promises to Indian farmers redundant. This must be condemned. Coming down heavily on the Indian government's apparent lack of spine, Suman Sahai of the Gene Campaign noted with acerbic irony that, "After Bali we should expect an influx of heavily subsidised agri-produce from outside. This will knock the stuffing out of Indian farmers already reeling under adverse domestic policies and the utter neglect of the agriculture sector." According to Sahai, Indian leaders at the WTO meeting should have argued on the basis of welfare and human rights given the country's appalling figures on hunger and malnutrition.