Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 148]
Warning (2): Cannot modify header information - headers already sent by (output started at /home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php:853) [CORE/src/Http/ResponseEmitter.php, line 181]
LATEST NEWS UPDATES | Food Security: Messy Jam, But Here’s a Map by Ashok Gulati

Food Security: Messy Jam, But Here’s a Map by Ashok Gulati

Share this article Share this article
published Published on Jun 24, 2011   modified Modified on Jun 24, 2011

Ensuring food security to all is one of India’s top policy agendas today. Given a large mass of poverty in the country, it is not surprising and no one would perhaps disagree with the need to achieve this as soon as possible. But the varied policy instruments that can be used towards achieving this goal draw sharp differences among the stakeholders.

What is food security? The World Food Summit of 1996 clearly states, “Food security at the individual, household, national, regional and global levels [is achieved] when all people, at all times, have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life” (FAO, 1996). This definition translates into four pillars of food security: (a) augmenting per-capita availability of food through domestic production and/or imports, (b) increasing economic access to food, especially for poor and vulnerable sections of the society, (c) improving absorption of food for better nutritional outcomes, and (d) ensuring relative stability in the food system to minimise the impact of an external or internal shock. Each one of these is discussed in detail in Gulati, Ganguly and Shreedhar, 2011, but here we focus on the pillar of economic access to food, which is being fiercely debated in India right now.

The UPA-II government has promised food security to all. What is under discussion is the National Food Security Bill (NFSB), likely to be introduced in Parliament soon, in a way guaranteeing the Right to Food. The main instrument being conceived to achieve this is distribution of subsidised rice and wheat through the Public Distribution System (PDS). To people in the special category — below a certain cutoff point of poverty line, to be determined by the Centre — wheat is likely to be distributed at . 2 per kg and rice at. 3 per kg against their likely economic cost of more than . 16 per kg and . 20 per kg, respectively.

The special category will get 7 kg of cereals per person per month — against their consumption of about 12 kg per person per month. We do not know yet at what price people in the general category will get wheat and rice, and in what quantity. There are various versions of the likely NFSB, ranging from the NAC, PMEAC, food ministry, etc. Depending on whatever is decided by the government, the minimum commitment seems to be 60 million tonnes of cereal distribution and maximum of about 80 million tonnes. Accordingly, the food subsidy Bill may vary from around . 70,000 crore to over . 90,000 crore.

Notwithstanding the well-documented leakages from the PDS — where as high as 58% of food distributed does not reach the poor — a few other points need to be noted so that this Right to Food turns out to be really ‘right, and not wrong’. First, even in a bumper year of 2010-11 when grain production may cross 236 million tonnes (mt), breaking all records, the procurement of rice and wheat has been around 57 mt. If the commitment to distribute through PDS is within 60 mt, we may be able to mull it from domestic production in a year of good harvest. But if the commitment is 70 mt or more, or if there is a severe drought, we will have to go for largescale import of rice and wheat. The very news that India wants to import 10-15 mt of rice or wheat may send the world markets into a tizzy, pushing the global wheat price possibly beyond $400 per tonne (currently it is about $320 per tonne fob US gulf). This would put a lot of pressure on the government to raise domestic minimum support price (MSP) by at least 30-50%, and if the issue price for the poor remains unchanged, it will immediately push the subsidy bill beyond . 1,00,000 crore, and within three years, beyond . 1,25,000 crore.
 
Second, even if we commit only the bare minimum of 60 mt to be distributed through PDS, we will also have to keep some strategic reserves of, say, 10-15 mt for an unforeseen situation, including drought. This would mean larger procurement of 70-75 mt out of a marketed surplus of maximum 120 mt of wheat and rice, at least for the first year. That means state takeover of more than twothirds of the grain (rice and wheat) trade in the country. The procurement, stocking and distribution costs of state agencies are very high. Just to give an example, the departmental labour of the Food Corporation of India (FCI) — unskilled labour that only loads and unloads — costs at least 5-6 times (. 30,000-40,000 per month) more than the market rate (. 5,000-6,000 per month). There are hundreds of labourers in FCI that earn more than . 1,00,000 per month by just loading and unloading grain bags! All these high costs and ‘rent-seeking’ are hidden in the food subsidy Bill for the poor.

Third, the high costs and rent-seeking are not only at the level of labour of FCI, but are also inflicted by some states (Punjab, Haryana, Andhra Pradesh, etc) that impose various taxes and levies as high as 14.5% (Punjab) and 10% (Haryana) on primary commodities such as wheat and rice. Once other states know this, and start procuring large quantities for PDS, they will not shy away from imposing a tax of even 20% to squeeze some resources from the Centre. The subsidy Bill may go well beyond . 1,25,000 crore, all in the name of the poor!
 
Fourth, to procure this enhanced quantity of rice and wheat for PDS, reliance on Punjab, Haryana and western Uttar Pradesh will become critical and even increase. This is a belt where productivity and surplus are high, but the water table is receding very fast (by more than 33 cm a year, as per Nasa satellites). This will go totally against the efforts of diversification in this region, and adversely affect the sustainability of farming operations. This would be a long-term damage to the grain bowl, which is not in the interest of the country.

Given all these potential problems, a question that crops up is whether we learn a lesson from other large countries as to how did they solve their food security problem, especially economic access to food. It may be good to look at two models, China and Brazil, within the Brics countries. China relied primarily on growth of agriculture, which it triggered by switching over from commune system to household responsibility system, and by significantly liberating price controls on primary crops, including rice, wheat, corn, etc. As a result, while agri-GDP in China increased by 7.1% per annum during 1978-84, farmers’ incomes increased by 14% per annum (due to freeing up of prices) during the period. This powerful agri-growth reduced poverty from 31% to 15% in just six years. Today, as per Chinese definition of poverty, less than 3% people are below poverty line. It is worth mentioning that average holding size in China is half (0.5 ha) of India’s, and yet their productivity levels are almost double than India’s. For instance, China produces almost 200 million tonnes of paddy from 29 million hectares, while India produces less than 150 million tonnes of paddy from 44 million hectares. China has 63% of rice area under hybrids, while India has less than 3%! That speaks volumes in terms of how to achieve food security.

The other example is Brazil, where agriculture is dominated by large farms, and even corporates plough millions of hectares with latest technologies and machines. A farmer’s field that I had an opportunity to visit had 30,000 hectares! They have reclaimed millions of hectares of land and brought them under cultivation to grow soybeans to feed the rising demand from Asia (China imported 58 million tonnes of soybean last year). But many small holders and urban poor have been left out of this booming agricultural prosperity in Brazil, and the government has launched a special programme, Bolsa Familia (Family Allowance) — as part of its Zero Hunger initiative — for the poor. It relies primarily on conditional cash transfers.

What is India’s story? India’s economic reforms largely bypassed agriculture. Till 2002-03, public investment in agriculture was falling. Agri-markets still remain strangulated with controls on exports, levies on rice as high as 75%, stocking limits and movement restrictions, and the list is endless. No wonder, agriculture kept limping and could not achieve the targeted rates of growth in the last two Five-Year Plans. Now there is some recovery in investments, but there is a long way to go. The total annual budget of the ministry of agriculture (including Indian Council of Agricultural Research), which is to guarantee availability of food, is about . 21,000 crore, while the food subsidy Bill is more than . 60,000 crore and is likely to go up significantly to about . 90,000 crore with the NFSB. We announce the launch of second Green Revolution with a paltry sum of just . 400 crore, while we spend . 40,000 crore on NREGA, which is basically a welfare scheme. This is the paradox of Indian policymaking. You cannot make the system run, where the productive wheel is that of a Nano car, and the welfare wheel of a tractor! The system will simply break down halfway, under the pressure of its welfare commitments! There do not seem to be many soft options for India to ensure food security to its masses, but to raise agri-productivity, agri-growth and agri-income by liberating it from archaic marketing controls. Remember, one percentage increase in agri-GDP growth is at least 2-3 times more effective in reducing poverty compared to same growth coming from nonagri sectors. In case of China, it was 3.5 times more effective and in case of Brazil, 2.7 times, as delineated in the World Development Report of 2008.

This is the key point that is being missed in the debate and the cart is being put before the horse! I hope Indian policymakers can learn from this global experience, and innovate the hybrid model based on higher agri-GDP growth (5-6%), conditional cash transfers for the poor where they can be reached, and a pruned and effective PDS for places and people who cannot be reached through cash transfers. That will be in line with overall economic reforms and diversification of agriculture, will reduce poverty faster and give economic access to food in a much more cost-effective manner than is being planned under the NFSB.

(The author is chairman of the Commission for Agricultural Costs and Prices)

The Times of India, 23 June, 2011, http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD/2011/06/23&PageLabel=15&EntityId=Ar01500&ViewMode=HT


Related Articles

 

Write Comments

Your email address will not be published. Required fields are marked *

*

Video Archives

Archives

Im4Change.org हिंदी वेबसाइट का परिचय. Short Video on im4change.org...

Im4Change.org हिंदी वेबसाइट का परिचय. Short Video on im4change.org...

"Session 1: Scope of IDEA and AgriStack" in Exploring...

"Session 2: Farmer Centric Digitalisation in Agriculture" in Exploring...

"Session 3: Future of Digitalisation in Agriculture" in Exploring...

Objectives | About Us | Workshops | Disclaimer
share on Facebook
Twitter
RSS
Feedback
Read Later

Contact Form

Please enter security code
      Close