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Why not cash for work?

By Chandra Bhan Prasad

Is the government's Food For Work Programme really helping to 'empower' the poor? By paying for their labour in foodgrain the implication is: the poor are hungry, let them eat food. But what about their other needs including medicines, homes, schoolbooks, social emergencies...

The Union government's Food For Work Programme (FFWP) is being hailed as a novel public policy package aimed at empowering the poor. It should ideally be rated as a joke on the poor. The FFWP targets 150 most backward districts in India where below-the-poverty-line (BPL) families are provided work near their homes. The work involves building link roads, ponds and other rural infrastructure-related projects. The districts, spread all across India , must have large concentrations of dalits/tribes.

Wages under the FFWP are calculated in a unique manner. First, the total value of the wage must conform to the minimum wage as fixed by the states (in one particular case it is Rs 35). The wage consists of a minimum of 5 kg of grain; the rest is paid in cash. The grain is priced at Rs 5 a kg. According to a government directive, 75% of the wage must be paid in grain and the remaining 25% in cash.

The FFWP is a fully Union government-supported programme; the states bear all the transportation and implementation charges. The idea is to "save" people from hunger.

The Union government has a fair number of policy advisors, drawn from academia, the non-government sector and party circles, who have long been backing pro-poor policies. They now have a wonderful opportunity to experiment with what they have been advocating.

While on the face of it the FFWP appears to be a wonderful public policy initiative, one needs to explore the ethical and human dimensions of the project. Why should the poor be paid in kind and not in cash? Would the people involved in this 'novel experiment' accept rice or wheat as their salaries/honorarium/conveyance charges? Why should this form of payment be applied only to the poor?

In the agrarian wage culture, wages were traditionally paid in kind. For instance, during wheat harvesting workers were paid wheat as wages and during paddy harvesting, paddy. Then, labour movements in the countryside began demanding wages in cash for workers as the grain they received would invariably be of very poor quality. Slowly, cash payments replaced payment in kind.

The ministry of rural development's guidelines make interesting reading. Section 03.4 says: "Payment of wages shall be made on a fixed day in a week preferably a day before the local market day." It would appear that the pragmatic government bureaucracy inserted this clause into the payment structure knowing full well that the 'food' paid out to workers would be bartered at the weekly market. In the bartering process, the poor-quality grain the worker 'earns' is invariably undervalued and the commodities he buys overvalued.

The authorities making payment have every opportunity to pay out the worst quality grain. As witnessed with the public distribution system (PDS), whenever better quality grain is supplied to distributors it is sold in the open market and rotten grain is distributed. The poor have no choice but to buy the inferior grain. If payments were made in cash, this form of corruption would be eliminated.

What a unique way of 'empowering' the poor. The poor are hungry, give them 'food'. The 'food' by implication will take care of their need for medicine, clothing, textbooks, everything...

The Union government must display some basic honesty. We all know that millions of tonnes of grain are rotting in government godowns, with no takers. It would seem that, by way of the FFWP, the government is trying to get rid of these stocks. Indeed, keeping foodgrain is proving more expensive than disposing of it. The government wants to be rid of the headache of managing excessive food stocks, and yet claim the moral high ground of "saving the poor".

(Chandra Bhan Prasad is a writer and columnist based in New Delhi )

InfoChange News & Features, May 2005