The poor need assured supplies of food along with cash but diverting their income through part-payment in kind is regressive
K S Gopal
Former member, Central Employment Guarantee Council
“In the Food Assurance Scheme, we found that aggregate food availability is high. So if one person works, his entire family receives adequate food. This eliminates hunger in the community”
Mahatma Gandhi once said that to poor and famished people, food is god. Most opposition to the inclusion of foodgrain in the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is because of the negative experience of Food for Work (FFW) programmes. Such programmes can be effective and will result in six outcomes, or six Cs.
Its biggest boon would be to instil confidence in the people who don’t have to worry about their next meal. MGNREGS is the ideal vehicle for this and validated by practice in Andhra Pradesh. A pilot conceived and implemented by this writer in the National Food for Work formed the basis of what is MGNREGS today. The scheme called “Food Assurance” provided 50 kg of rice and six kg of red gram every month. These were delivered by the fifth of every month to each family that reported to work. Foodgrain was provided regardless of the progress of work. Its value was adjusted from the wages. The price of rice was well above the public distribution system, or PDS, prices and dal was procured from the market and priced accordingly. With about 16 kg available from the PDS, the grain was sufficient for an average-sized family. We tied in legumes, too.
Government officials who were worried whether workers would come to work at all were in for a surprise. Workers completed work in two or three months while they were to receive the food items for the next eight months. Supply was kept monthly unlike in FFW schemes in which 200 to 300 kg are suddenly dumped on the worker — only to be sold in bulk. All this gave FFW a bad name. But the villagers had the last laugh — every state government getting huge quantities of FFW grain from the Centre lost in subsequent elections.
We should decouple food and work. So, while work is given only in some months, food can be given every month. It is for the government to get work out of the people. If you give food even for 20 days, it will provide enough food even at above poverty line prices every month.
The next C is customer. The wage worker is paying for foodgrain and cannot accept poor quality. With relaxations in procurement standards and available stocks of old foodgrain, the government should not be tempted to dump them on the gullible poor. I sincerely hope this is not the intent driving the food ministry to suggest including foodgrain in MGNREGS or that the finance ministry has found a way to show a lower deficit. The approach must be to regard the worker household as a valued customer and not a beneficiary. Otherwise, the poor will dump this government since food is a very sensitive issue and injustice is not tolerated.
The next C is calories. Manual work is very hard and demands more energy calories. Timely and adequate food consumption, therefore, is very important. It is worth noting that most workers are anaemic women.
The other C is the community impact. Only able-bodied people find work in MGNREGS. Many among the poor cannot do such work but are desperate for employment and income. In the Food Assurance Scheme, we found that the aggregate food availability is high and, more importantly, available to the poor. So if one person works, his entire family including the old and infirm, children and single women receives adequate food. This eliminates hunger in the community.
Another C of interest to the government is cost. The turnaround is shorter so stock accumulation is reduced. This will lead to fresh and better quality grain being made available to the people. It will impact procurement and efficient use. Poor quality will not get an attractive procurement price and will instead be processed or used as feed elsewhere.
In my 30 years of development work experience, rarely did I find joy and fruition except when I saw the warm response from poor households, especially women, to the Food Assurance Scheme. I can say with confidence that all that the poor need is assured and timely supplies of food with some cash. This provides them the power to negotiate their exploitation and exclusion.
Ashwani Kumar
Professor of Development Studies, Tata Institutes of Social Sciences
“The sudden shift to payment in kind will lead to inequity of the worst kind. It has the potential to depress the marginal propensity of the poor to absorb additional income”
Reviving the memories of “Food or Loot for Work Programme”, as described by one of the original architects of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the ministry of rural development’s proposal to provide foodgrain as part of wages is retrograde, counterproductive and diversionary. Since the public distribution system (PDS) has shown signs of “impressive revival” and the Food Security Act is on the anvil, diverting the hard-earned income of wage-seekers through food vouchers or coupons is a regressive idea. At a time when wage-seekers continue to be paid less than the notified wages owing to the piece rate payment system – even to the tune of Rs 1 as daily wage in Tonk District in Rajasthan – the sudden shift to payment in kind will lead to inequity of the worst kind.
Despite MGNREGA’s alleged crime of adversely affecting growth in agriculture, paradoxically, the food ministry has registered a record surplus this year and now wants to offload this as part-payment in kind to wage-seekers. Technically, the proposal to provide foodgrain under Section 31 in Schedule 2 is feasible, but it has not been considered a viable option since the inception of MGRNEGA in 2006. Not surprisingly, payment in kind was not an agenda of MGNREGA 2.0. In short, payment in kind has the potential to depress the marginal propensity of the poor to absorb additional income and dilute the multiplier accelerator effects of MGNREGA.
Development economists and policy makers have noted that public works programmes often increase the purchasing power of wage-seekers and this leads to the diversification of expenditure and enlargement of the consumption basket. Field studies have also pointed out that augmenting income has helped the rural poor improve food security, cope with medical emergencies and facilitate the education of children. In other words, the additional income so generated leads to further demand for employment causing a “mutually reinforcing relationship between investment and income”, as noted by development economists such as Mihir Shah and Indira Hirway in their Keynesian multiplier analysis of MGNREGA. Also, additional income incentivises the creation of durable assets, especially on the lands of the rural poor. Take the case of category-IV work in the Act on the private lands of scheduled castes and tribes, the beneficiaries of Indira Awaas Yojna and land reforms, and small and marginal farmers. As a macro-economic stabiliser, MGNREGA is much more than a relief work programme or a fashionable direct cash transfer schemes.
Further, part-payment in foodgrain raises the concern of effectively negating the positive rise in the wages of the rural poor. Even the neoliberal critics of MGNREGA grudgingly agree that the scheme’s most significant impact has been on the Minimum Wages Act of 1948, since a historical correction in the rural labour market has occurred. Though the government has indexed wages with consumer price index of agricultural labour and is still grappling with the issue of notified wages lower than statutory minimum wages in six states, the average wage per day for MGNREGA labourers has risen from Rs 60 in 2006 to Rs 120 in 2011.
The rise in the cash component of rural wages has also emerged as a “weapon of the weak” since this has led to the reversal of power relations between labourers and the so-called kisan (farmer) or malik (master). More importantly, part-payment in kind raises the prospect of reversing the trend of gender equity in the rural labour market. Based on the 64th round of National Sample Survey, progressive economists such as Jayati Ghosh and Chandrashekhar have argued that MGNREGA has attracted the overwhelming support of women because it has narrowed the gender gap in the wages being paid. Field studies have also pointed out that MGNREGA has led to a reduction of drudgery for women and corrected the anti-gender rate in public works.
In the end, we are all committed to feeding the starving poor. But rather than using MGNREGA as a proxy for a universal right to food, the time has come to consolidate the positive gains of MGNREGA and urgently implement the Food Security Act as part of the agenda of right to work with dignity!
