International Journal of Agriculture and Food Science Technology. ISSN 2249-3050, Volume 4, Number 6 (2013), pp. 627-634 © Research India Publications http://www.ripublication.com/ ijafst.htm Implications of National Food Security Ordinance (NFSO) P. Venkatesh 1 , R. Sendhil 2 and V. Sangeetha 3 1 Division of Agricultural Economics, Indian Agricultural Research Institute, New Delhi, INDIA. 2 Social Sciences, Directorate of Wheat Research, Karnal, Haryana, INDIA. 3 Division of Agricultural Economics, Indian Agricultural Research Institute, New Delhi, INDIA. Abstract The implications of National Food Security Ordinance (2013) for farmers and government, and impact on production and consumption pattern have been examined. The study also analysed the trends on food subsidy, production and procurement of foodgrain and storage capacity. The analysis shows that the Ordinance may become adverse to the farmers due to price disadvantage, particularly for small and marginal land holders. Presently, the low procurement rate in total cereal production (one third of total production) and poor storage facilities forced the farmers to sell their produce at open market for a lesser price than the minimum support price. In addition, the proposed subsidised price of rice and wheat would significantly and negatively influence the market price resulting in profit reduction. On the other hand, the food subsidy burden is expected to increase enormously from INR 0.58 lakh crores in 2010-11 to INR 1.24 lakh crores in 2013-14, further widening the fiscal deficit. The mammoth pressure on procurement and handling of foodgrains is also a key concern. Despite 42 mt storage capacity of FCI, about 56 mt of rice and wheat was procured for the central grain pool during 2010-11 leading to a huge wastage. Unless otherwise additional storage facilities are created shortly, under the NFSO the wastage is bound to increase as the government is expected to procure about 75 mt per year. Further, the states takeover of the food economy would shrink the efficiency and crowd out private sector competition. Another major implication of the Ordinance is that cereal centric approach would put pressure on non- cereal crops and would affect the food diversity both in terms of