Has its way on food security; to sign the TFA
The deal reached between India and the US over stockpiling of food grains has cleared the way for the former to sign the contentious Trade Facilitation Agreement. It has vindicated the stand the Narendra Modi Government had taken in July — that it would not ink the agreement unless the country’s food security needs were adequately addressed. It was criticised on two grounds: One, that New Delhi should not have gone back on the acceptance the previous regime had made to the World Trade Organisation; and two, that it had isolated itself among the world community by its intransigence. The recent breakthrough has put paid to those concerns because not only has India got a fair deal as a result of the negotiations it entered into with the US in the last three months, but it has also demonstrated its commitment to the TFA. Once the WTO’s General Council ratifies the deal in December, the new regime will kick in. Clearly, standing firm on food security needs of the poor has worked for the Government and silenced its critics. The timing of the India-US agreement cannot have come at a better time; the Prime Minister is in Australia for the G20 summit where he deliberates with a host of leaders of the West who had reservations when India refused to sign on the dotted lines of the TFA. The India-US deal puts in place a ‘permanent peace clause’ by which India will not be legally barred from stockpiling food grains until such time as it believes the interests of the poor have been taken care of. The earlier ‘temporary peace clause’ had given time to countries until 2017 to put in place a suitable mechanism, after which any stockpiling of food grains for distribution to the poor would be open to legal challenge. The Modi Government had contended that India, with millions of people needing food grain subsidy, could not be bulldozed into accepting an impractical deal.
Now that the impasse has been broken, India will have to get cracking. The effective implementation of the TFA requires the country to put in place a system that will cut down or even eliminate delays in clearing procedures at ports; and work with determination to rationalise food grain subsidies over the coming years, with an emphasis on targeted subsidies. The stockpiling has been essentially needed to provide the poor enough food grains at affordable prices, but it has also often resulted in needless conservation of the product at Government-owned godowns. Much of the produce goes waste due to poor storage facilities. Moreover, with previous Governments on a buying spree of paddy and wheat, farmers had little option but to produce more of the same, leading to a skewed balance of food grains.
The Government has already taken a few steps to tackle troublesome issues concerning the sector. It has made a very modest hike in minimum support prices for paddy and wheat, and has disincentived States from giving ‘bonuses’ which are over and above the Centrally-decided MSP. This should reduce the stockholding to just what is needed as buffer. The corollary to this is that the Governments, both at the Centre and the States, will be compelled to use the stocks in a more targeted manner. Perhaps the breaking of the deadlock could result in a revamp of the creaking Public Distribution System.