Lessons from the fracas over foodgrains

Source: The post is based on the article “Lessons from the fracas over foodgrains” published in “The Hindu” on 5th July 2023.

Syllabus: GS 2- Government policies and intervention & GS 3 – issue related to poverty and hunger

News: The Karnataka government recently decided to convert the promised Anna Bhagya scheme to a direct benefit transfer temporarily. It has brought into focus the limits of a state government’s policy intervention on a crucial matter such as food security.

What is Karnataka’s Anna Bhagya Scheme?

The Anna Bhagya scheme, an initiative by Karnataka, aims to supply 5 kg of free rice monthly to 4.42 crore beneficiaries. This group consists of 45 lakh Antyodaya Anna Yojana (AAY) cardholders, 3.58 crore Priority Household (PHH) cardholders, and 39 lakh cardholders from a special PHH category within Karnataka. These provisions would be over and above the regular allocations provided under the National Food Security Act (NFSA).

What are the Challenges for Karnataka’s Anna Bhagya Scheme?

Sudden change in OMSS-D policy: The biggest challenge for the Anna Bhagya scheme was the sudden change in the Open Market Sale Scheme-Domestic (OMSS-D) policy by the central government. The Union Food Ministry stopped the sale of surplus grains to states, under this scheme. The OMSS is now limited to accommodate small and marginal buyers and traders. It was a major route to supplement the allocation for rice-deficit states.

Effective communication gap: There was also a lack of effective communication between different departments at the national level and the state government. If there had been better coordination, the difficulties in launching the scheme could have been mitigated.

Financial burden: Lastly, the financial cost of the scheme is another significant hurdle. With FCI agreeing to supply grains at ₹36.6 per kg, the monthly cost for the state would amount to around ₹840 crore.

Lastly, supplies for the scheme would not have been fulfilled, just by OMSS-D.

What is OMSS Policy?

Read here: The Open Market Sale Scheme for wheat and rice

Why has the central government shifted the OMSS Policy?

This Shift in policy due to a) lower quarterly stocks of rice and wheat, which was at the lowest in three years, b) uncertainty about the upcoming monsoon season and its potential impact on food grain production, c) concerns over state-level food schemes which rely on the central government and FCI to support such schemes without considering broader trends and realities.

What are the lessons for states from this event?

States must have comprehensive plans and mechanisms in place before launching any large-scale scheme.

The states must consider the macro picture to ascertain the practicality of their new schemes, in the light of national food security and financial implications.

It also underscores the need for states to consider all aspects before making promises that rely heavily on central support.

Political parties should exercise restraint while making electoral promises, especially on critical issues like food security.