Delivering Food Subsidy - The Oxford Topic of Food, Politics, and Society - page 299

Chapter 12
Delivering Food Subsidy
The State and the Market
Ashok Kotwal and Bharat Ramaswami
Introduction
For the 3 billion people in the world who live under $2 a day, no question is more
important than where their next meal will come from. Undoubtedly, over the long
run it is difficult to address the problem of food security without eradicating pov-
erty or, in other words, without economic development. However, development is a
long and uncertain process, and leaving generations of the poor to an uncertain future
is neither morally defensible nor politically acceptable. Moreover, there is growing
awareness that a crucial determinant of economic progress is the development of
human capital, which in turn implies availability of food for all. Developing countries
therefore have no alternative but to act now by devising schemes of subsidizing food
for the poor. Given the enormous number of competing claims on the meager fiscal
resources that a developing country can command, the issues of food subsidy become
inevitably contentious.
The debate is especially intense in a country where a sizable proportion of the popula-
tion is poor enough to need food subsidy. On one hand, a vast majority needs the sub-
sidy, and on the other hand, a subsidy to so many puts a big dent in the national budget
of a poor country. It creates two camps: “Can we afford to let the poor starve?” versus
“Can we afford the subsidy bill?” It matters how this question is answered—it will dictate
whether the subsidy ought to be universal (with minimal exclusion of only the obviously
affluent) or narrowly targeted.
In this context, the issues of waste and corruption become paramount. Any delivery
system that is prone to a sustained leakage of the government resources through inef-
ficiency, fraud, and corruption becomes a liability. In a country where a vast majority is
poor, it becomes difficult to argue openly against food subsidy on the grounds of fiscal