In recent debate on Food Security Bill, which will promote Govt. procurement on massive scale, one aspect of implementing this bill has been overlooked – Efficiency of Govt system of procurement, storage & distribution. We all know how inefficient this system has been from our past experience. However if further evidence of the same was needed, we have example of Madhya Pradesh.
MP Govt. announced a bonus of Rs 100/- per quintal over and above the Minimum Support Price of Rs 1120/-. The price became very attractive for farmers, enabling the MP Govt. to procure 48.40 MT of wheat, nearly 10 times more than what was procured during 2008. While undoubtedly the procurement process has been most successful, however it has created its own problems. The state govt. never had the capacity to store such large amount of wheat that it procured, leaving huge amount of grains to rot in the open fields. While the farmers have rec’d far more than Rs 5000 crores from the state govt. however question needs to be considered, is it really an efficient way of providing food security.
In view of the above experience, it is worth asking if the Food Security Bill being considered by the Central Govt. will also result in similar wastages, but at much larger scales. Estimate of the likely cost of the Food Security Bill is around Rs 92,000 crores. Perhaps use of Cash Transfers could be a better option than large scale procurement by the Govt.
Any suggestions / comments ?
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