the scintillating urban and the static rural

Higher urban wages attract rural poor, leading to migration, unemployment, emergence of squatter settlements etc.

Higher wages or the ‘expected higher wages’ in the urban sector drive the immigrants.

Of course migration cannot be stanched. Two pronged policies:

• Cities should expand to keep pace with immigrant population. Policies to integrate informal into mainstream economy, Govt provision of adequate physical infrastructure.

• Productivity in rural areas can be enhanced (for example through imposition of minimum wages).

In India, rural labour market seems to have settled at a low productivity equilibrium encouraging migration.

Productivity in Agriculture sector has not progressed over past few years:

If there is a bad harvest, there isn’t enough foodgrains. If there is a good harvest, there is wastage of grains!

Budget FY11 underlines the need for accelerated investment for the construction of warehouses and cold storage facilities. The Govt has now also allowed ECB for this purpose. Besides, various excise, customs and service tax exemptions are available on equipments used in agri produce preservation and storage. Subsidies already in place included Rs 1.3 crore per cold storage facility.

Why with all the subsidies to the private sector, why does the Govt also spend on FCI rentals? FCI has been hiring godowns from private parties for a guaranteed period of seven years.

The Govt should link the subsidy to each warehouse with two years of one third warehouse space let out to the Govt, for no cost.

For the entrepreneur, if with Rs x profit per sack of grain led to a breakeven in t years, the break even under the proposed structure increases by just two-third of a year. The govt in the meanwhile can save on rent and build godowns that it now needs to do given the revised buffer foodgrain norms following the introduction of Food Security Bill.

Outsourcing malnutrition

Per cap grain availability has averaged over 300 Kg/year between 2000-10. Yet we continue to see a high incidence of malnutrition and malnourished deaths. WHO estimates 178 million malnourished children around the world.

Clearly, food production is not yet a bottleneck, and hunger is perhaps a direct consequence of the utter poverty of the lowest income groups.

The increasing number of agricultural land acquisitions in the lower income economies, by the advanced nations, is incredible, and highlights the role of govt policies and safety nets.

India's Food Security Bill is a commendable step towards achieving food security. However, more than intention, it is implementation which will determine the success of food security.