chapter – iv challenges and prospects of food …
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CHAPTER – IV
CHALLENGES AND PROSPECTS OF FOOD SECURITY IN INDIA
4.1 INTRODUCTION
Ensuring food security for the country has been a major preoccupation
of the government since independence.1 “Food security implies access by all
people at all times to sufficient quantities of food to lead an active and healthy
life.”2 As noted by P.V. Srinivasan, this requires not just adequate supply of
food at the aggregate level but also enough purchasing capacity with the
individual/household to demand adequate levels of food. Food security is
access to enough food by all people at all time for an active and healthy life.
India is truly developing now and its income, infrastructure, per capita income
has also developed .But the major problem faced by India is “the problem of
food management and it’s distribution”. Today, India ranks second worldwide
in farm output. India is the largest producer in the world of milk, cashew nuts,
coconuts, tea, ginger, turmeric and black pepper. It is the second largest
producer of wheat, rice, sugar, groundnut and inland fish. It is the third largest
producer of tobacco. India accounts for 10% of the world fruit production with
first rank in the production of banana. Despite ensuring ample availability of
food, existence of food insecurity at the micro-level in the country has
remained a formidable challenge for India. India is one of the largest producers
of food in the world. Still India is not in the condition to meet the basic food
requirements of people. There are many people in India who strive hard even
for the square meals. Not only the people in village areas are facing this
problem, but also people in major cities face the same problems! Lack of food
supply and the nutritional deficiency causes not only a bad mark for the
1 Uma Kapila, “Indian Economy – Issues in Development and Planning and Sectoral Aspects”,
Academic Foundation, New Delhi, 2002-2003, p. 313. 2 P.V. Srinivasan, “Agriculture and Food Security”, in Shovan Ray (ed.), Handbook of Agriculture in
India (New Delhi, 2007), p. 130.
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country’s image in the international level, but also causes adverse effect on
country’s developing economic policies and it’s structure. Mismanagement of
food products and it’s supply also puts country under many dreadful diseases
too! This chapter is focused on the several foods security issues prevalent in the
Indian scenario. It also covered the several development programmes taken up
by the Indian government to counter various food security issues including
several schemes and yojanas. India’s biggest challenge still remains ensuring
food and nutritional security to its masses.3
The need for achieving food security is felt significantly in the recent
years due to enormous pressure from the ever increasing population in India.
India after 66th year of independence has not only seen development and
progress but also becoming one of the fastest growing economies in the world.
This accomplishment takes a shattering twist when one looks at the hunger
problem booming within it.
The existence of this problem is not merely confined to rural areas but
also extend to urban region. To combat this perennial problem, Government
did introduce some major programme such as Public food distribution system
(PDS), the Integrated Child Development System (ICDS), Mahatma Gandhi
National Rural Employment Guarantee Act (MGNREGS), Antyodaya Anna
Yojana (AAY) etc. This major programme fails to penetrate in every section of
the society and hunger continues to thrive among the poor people. The
disappointment in the failure of this programme can mainly be attributed to the
prevalence of inequality among the society, unsuccessful delivery of public
services, pathetic liability system and infringement in the implementation of
pro-poor policies. In this backdrop, the National Advisory Council (NAC)
drafted a new “Food Security Bill” in 2010, the bill which is considered as the
biggest ever experiment in the world for distributing highly subsidized food for
any government through a “rights based” approach. The National Food
3 Dr. Sultan Singh Jaswal, “Challenges to Food Security in India”, IOSR Journal of Humanities and
Social Science (IOSR-JHSS), Vol. 19, Issue 4, Ver. 11 (April 2014), available at www.iosrjournals.org.
188
Security Bill after much debate and analysis was passed and became a law on
12th September, 2013. According to this Act, Food Security is defined as the
availability of sufficient food grains to meet the domestic demand as well as
access, at the individual level, to adequate means of food at affordable prices..
The globally recognized definition of food security is access to food at the
household level at all times to ensure a healthy and active life for all its
members. The household is accepted as the unit for consideration, rather than,
let us say, a country or an administrative subunit of it because for food security
to be meaningful, food must not only be available at these higher levels, but
must be accessible at the lowest unit, the household, and indeed every single
member within it too. In fact, a central aspect of food security is the
discrepancy between availability (at a higher level) and accessibility (at the
lowest level). The paradox or scandal noted above is a manifestation of that
discrepancy.
Consider the situation in our country. Foodgrain production increased
from around 50 million tonnes at the time of Independence to over 200 million
tonnes in recent years. Although what was being produced at the time of
Independence and for a couple of decades thereafter was not adequate to meet
the caloric requirements of the people, we have now reached a situation where,
if what is produced is distributed equally, the minimum requirements of all can
be met in spite of the tremendous increase in population over more than half a
century. In no part of the world is the foodgrains equally distributed, but the
hypothetical calculation goes to show that availability is not the main issue.
Calculations show that in the future also, say in 2030 or 2050, the situation is
likely to be similar. Not that all matters relating to availability have been
solved. But India, though still in the low ranks in terms of per capita
availability of food, has reached the stage where, as far as food security is
concerned, the accent can be, and has to be, on access of different sections of
the population to what is available.4
4 Ibid.
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The present study is based on the secondary data published by various
agencies and organizations. The present study makes use of data and
information provided by IFPRI, Global Hunger Index of 2013, FCI, Ministry of
Agriculture, Newspapers, Magazines, Books, Economic journals and Internet
etc.
4.2 NEED OF FOOD SECURITY IN INDIA
The International food policy research institute (IFPR) classified the
status of hunger into five category-low, moderate, serious, alarming and
extremely alarming. India falls into the category of alarming. The most
important aspect contributing to this development is the non availability of
basic requirement of food. It has been observed that the consumption of food,
in terms of nutrition and quantity, is lacking far behind. According to the study
conducted by National Institute of Nutrition, the minimum per capita food
grain required for an adult is 182.5kg/year whereas in India, the availability is
only 173.6kg/year and as far as the protein requirement is concerned, the daily
intake should be 50mg but the situation seems to remain stagnant, the per
capita daily intake is only 10mg. Despite buoyant economic growth in recent
years around one-third of India’s population still lives below the poverty line.
All these estimates point to the existence of food insecurity at the micro-level
in terms of either lack of economic access to food or lack absorption of food
for a healthy life.5
Further studies have indicated that consumption and expenditure on food
grain have decrease up to a certain level due to increase in food prices and
enlargement in the consumption of non-food item. Malnutrition and poverty are
the main causes for the adoption of food security in India. Every year nearly
5000 children die due to inadequate food consumption. HUNGAMA report
published by Nandi Foundation in 2011 found that 42% of the children under
the age of five are underweight and 59% are stunted. Above this, a study
5 Dr. Krusha Chandra Dev and Dr. (Mrs.) Jyotsna Rani Kuanas, “Food Security in India: The
Challenges Ahead”, Indian Bar Review, Vol. XL, 2013.
190
conducted by Food and Agricultural Organisation found that 225 million
people i.e. 23% of our population are undernourished and 260 million people
falls under the category of above the poverty line (APL). The increase in the
number of APL household is supposed to decrease the number of
undernourished people but it is happening the other way round.
4.3 CHALLENGES BEFORE FOOD SECURITY IN INDIA
Food security is the back bone of national prosperity and well being.
The health of any nation is directly linked to food security. Food security may
be defined as availability of food and access to it. A family is considered to be
food secure when it’s members do not live in hunger or fear of starvation. As
per definition of FAO- Food Security exists 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. There is
direct relationship between food consumption levels and poverty.In India, 30
million people have been added to the rank of hungry since the mid 1990s and
40% children are underweight. World wide 852 million people are hungry due
to extreme poverty and2 billion people lack food security intermittently due to
varying degree of poverty. 600 million children die of hunger every year and
17000 everyday. In India approximately, 320 Indians go to bed without food
every night and recent data is very much alarming and situation is going even
worse. Food riots have taken in many countries of the world. It’s becoming
very difficult to maintain food security. In rural context, agriculture
development for small and marginal farmer is the most important dimension of
food security. The diversification of agriculture for food e.g., cereals, pulses,
edible oil yielding, vegetable, fuel &, timber yielding plants, medicinal and
fodder crops are necessary to meet the food and augment income to farmers to
meet the food security. Natural vagaries like excessive rainfall, drought, and
availability of water for irrigation, undulating topography, soil erosion, and soil
type such as degraded soil, acidic &alkaline soil affect the food security. The
income levels of farmer families govern the access to food affordability. Food
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distribution is a big problem. PDS (Public Distribution System) is not
satisfactorily functioning. The families very poor within adequate income
cannot escape food crisis. Globalization may and may not help food security.
However, there are people who feels that globalization will definitely help food
security due to trade but it’s matter of debate. We will have to aim at food
security in developing countries through increased and stabilized food
production on an economically and environmentally sustainable technologies/
methods. Diversification in agriculture is highly required. We can not afford to
huger, malnutrition and famine.6
Accordingly, all of us including Govt. policies seriously need to
redesign in order to meet the present demand and fill the gap of exiting system
in order to ensure food security to every citizen of the country. While making
grain available to all is important, it is equally essential to ensure that all food
supplied for consumption remains unadulterated and uncontaminated.7
4.4 THE PROBLEM OF FOOD SECURITY
As far as the question of ‘adequate supply’ is concerned, it involves two
dimensions: (i) the quantitative dimension (in the sense that the overall food
availability in the economy should be sufficient to meet the demand), and (ii)
the qualitative dimension (in the sense that the nutritional requirements of the
population are properly looked after). As far as the question of ‘enough
purchasing capacity’ is concerned, it involves the introduction of employment
generation programmes so that the income and purchasing power of the people
increases. To tackle the quantitative and qualitative aspects of the food security
problem, the Government of India has relied on the following three food-based
safety nets: (1) public distribution system (PDS). (2) integrated child
development services (ICDS) and (3) mid-day meals programme (MDM).8
6 Dr. Suresh Kumar Khurana, “Food Security in India: Status, Issues and Measures”, International
Journal of Business and Management and Scientific Research, Vol. 17, May 2016 available at www.eminencejournal.com.
7 Ibid. 8 R. Radhakrishna, “Feed and Nutrition Security of the Poor”, Economic and Political Weekly, April
30, 2005, 1817.
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PDS has been the focus of most of the attention and debate over the years, a
major part of this chapter is devoted to its discussion.
4.5 THE NATURE OF THE PROBLEM
4.5.1 The Quantitative Aspect
Because of chronic food shortages that the country faced in the years
following Independence, the focus of food policy was to achieve self-
sufficiency. ‘Agricultural Inputs and Green Revolution’, the period after the
Third Plan has been marked by rapid strides in foodgrains production
(particularly wheat and, in recent years, rice as well). This has enabled the
economy to overcome the problems of foodgrains shortages and build up large
stocks of foodgrains to counter any scarcity conditions. In fact, as noted by R.
Radhakrishna, India achieved self-sufficiency in foodgrains in the 1970s and
has sustained it since then. It improved its capacity to cope with year-to-year
fluctuations in food production by building up large buffer stocks through the
agency of FCI (Food Corporation of India) and supplying these stocks to the
people through the PDS. During some of the recent years, the buffer stocks
considerably exceeded the minimum norms causing the problem of ‘excess
stocks’.
While the foodgrains stock position thus looks satisfactory at present,
there are some issues of concern. Analysis point out that while population
growth and shift in food habits away from coarse grains with the rise in
incomes, will push up the consumption of wheat considerably in year to come,
the production is not likely to rise as neither area under wheat is likely to
increase nor are any further increases in productivity in evidence. As far as rice
is concerned, its production in recent years has been more than consumption
except 2002-03. However, rice output has not grown strongly with yields
stagnating at around 2,000 kgs per hectare since the late 1990s. Accordingly,
many observers believe that rice production is also beginning to plateau. As far
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as vegetable oils and pulses are concerned, India already imports their large
quantities.
4.5.2 The Qualitative Aspect
Even more worrisome is the quantitative aspect of the problem as the
following facts clearly bring out:
1. According to the Global Hunger Index 2013, released in October 2013, India
ranks an abysmal 63 in a group of 78 developing countries – way below
neighbouring countries like China (rank 6), Sri Lanka (rank 43) and Nepal
(rank 49). Even Pakistan ranks higher at 57 while Bengladesh’s rank in 58.9
4.6 PUBLIC DISTRIBUTION SYSTEM IN INDIA
In India as stated earlier, this has been the most important food based
safety net introduced by the Government of India.
The basic objective of the public distribution system in India is to
provide essential consumer goods at cheap and subsidised prices to the
consumers so as to insulate them from the impact of rising prices of these
commodities and maintain the minimum nutritional status of our population.
To run this system, the government resorts to levy purchases of a part of the
marketable surplus with traders/millers and producers at procurement prices.
The grain (mainly wheat and rice) thus procured, is used for distribution to the
consumers through a network of ration/fair price shops and/or for building up
buffer stocks. In addition to foodgrains. PDS has also been used in India for the
distribution of edible oils, sugar, coal, kerosene and cloth. The most important
items covered under PDS in India have been rice, wheat, sugar and kerosene.
Coarse grains (jowar, bajra, maize etc.) virtually do not figure in the PDS as
their combined sales have amounted to less than 1 per cent of the total PDS
sales. Pulses, which constitute an important source of protein for the poor, have
had a share of less than 0.2 per cent in total PDS sales. PDS in India covers the
whole population as no means of direct targeting are employed. The criterion is
9 International Food Policy Research Institute, Global Hunger Index 2013, p. 15.
194
to issue ration cards to all those households that have proper registered
residential addresses. The number of fair price shops (FPS) has increased over
the years from 0.47 lakh at the end of 1960 to 3.12 lakh in 1984 and is
presently 4.74 lakh. PDS distributes commodities worth more than Rs. 30,000
crore annually to about 160 million families and is perhaps the largest
distribution network of its kind in the world.10
4.6.1 State Intervention in Foodgrains and FCI
The main agency providing foodgrains to the PDS is the Food
Corporation of India (FCI) set up in 1965. The primary duty of the Corporation
is to undertake the purchase, storage, movement, transport, distribution and sale
of foodgrains and other foodstuffs. It ensures on the one hand that the farmers
get remunerative prices for their produce (not less than the
support/procurement prices fixed by the government), and on the other hand,
the consumers get foodgrains from the central pool at uniform prices (known as
issue prices) fixed by the Government of India. The Corporation has also been
entrusted with the responsibility of maintaining buffer stocks of foodgrains on
behalf of the government. With the increasing production of wheat and rice in
recent years and the increasing demands on the PDS, the role of FCI has also
increased as it is the sole repository of foodgrains meant for the PDS. FCI has
the following achievements to its credit: (i) ever since FCI started its
procurement operations, the levels of procurement have increased considerably
enabling the government to build up adequate buffer stocks on the one hand,
and to meet the requirements of the PDS on the other; (ii) with increase in the
domestic procurement of food grains by the FCI, dependence on imports of
foodgrains has declined considerably enabling the country to save valuable
foreign exchange; (iii) since a major part of the FCI’s procurement operations
is in the nature of price support purchase, the FCI has arrested price declines to
unremunerative levels; (iv) by supplying foodgrains through the PDS at
10 Govt. of India, Planning Commissions, Tenth Five Year Plan, 2002-07 (Delhi, 2003), Volume II,
p. 367.
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‘affordable’ prices, the FCI has helped in reducing the inflationary pressures on
the one hand, and has enabled the low income groups to meet their foodgrains
requirements on the other hand; and (v) the FCI has played an important role in
building up scientific storage capacity in the country. This has not only enabled
the country to buildup buffer stocks, it has also helped in reducing losses on
storage.11
The PDS in India has been criticized on various counts. The main
criticism are as follows:-
(i) Limited benefit to poor from PDS
PDS was evolved for management and distribution of food stocks at
affordable prices to the poorest of the poor, with a view to minimize the
problems of hunger and malnutrition in the country.12 In a study on the
effectiveness of PDS in reaching the poor, Kirit S. Parikh says. “The cost-
effectiveness of reaching the poorest 20 per cent of households through PDS
cereals is very small. For every rupee spent, less than 22 paise reach the poor in
all States, excepting in Goa, Daman and Din where 28 paise reach the poor.
This is not to suggest that PDS does not benefit the poor at all, but only to
emphasise that this support is provided at high cost.” In this context, it would
also be pertinent to point out that ration cards are issued only to those
households that have proper registered residential addresses. This means that a
large number of poor who are homeless and others without proper residential
addresses (for example, migrant labourers) are automatically left out of the
food security system.
Using 1986-87 household level data, Radhakrishna, K. Subbarao, S.
Indrakant and C. Ravi estimated the extent of income transfer through PDS to
the poor, and the consequent reduction in poverty in terms of percentage and
severity. They concluded that there were negligible welfare gains due to PDS.
11 Madhoo Pavaskar, “Public Intervention in Agricultural Marketing”, in M.L. Dantwala (ed.), Indian
Agricultural Development Since Independence, (New Delhi, 1991), p. 315. 12 L. Reddeappa, “Food Security in India”, ed. 2011, Kanishka Publishers, Distributors, New Delhi,
p. 7.
196
The per capita income gain to the poor from all consumer subsidies was no
more than Rs. 2.01 per month, or 2.7 per cent of their per capita expenditure, in
rural areas. The overall transfer gains were very meager. Not only this, the
transfers were regressive, i.e., non-poor cornered greater benefits. With the
exception of Kerala and Andhra Pradesh, PDS also had a negligible effect on
poverty and nutritional status. Considering the country as a whole, there was a
reduction of barely 2 percentage points in the poverty ratio due to combined
incidence (income gains) of food and non-food consumer subsidies.13
Even the TPDS (Targeted Public Distribution System) introduced in
1997, has not made a significant impact on the access of food since delivery
systems in the poorer States are weak.14
(ii) Regional Disparities in PDS Benefits
For example, in 1995, the four Southern States of Andhra Pradesh,
Karnataka, Kerala and Tamil Nadu accounted for almost one-half (48.7 per
cent) of total PDS offtake of foodgrains in the country while their share in all-
India population below the poverty line in 1993-94 was just 18.4 per cent. As
against this, the four Northern States of Bihar, Madhya Pradesh, Rajasthan and
Uttar Pradesh (or BIMARU States) having as much as 47.6 per cent of the all-
India population below the poverty line in 1993-94 accounted for just 10.4 per
cent of all-India offtake of foodgrains from PDS in 1995. A more accurate
picture of differences across States and regions emerges when we examine the
distribution of per capita quantities, that is, after adjusting for population size.
A study published in 2005 has shown that in poor States like Bihar, Madhya
Pradesh, Uttar Pradesh and Rajasthan with a high incidence of poverty, the per
capita monthly purchases of cereals from PDS was less than half a kg. while it
13 Quoted in S. Mahendra Dev, “Public Distribution System: Impact on Poor and Options for Reform”,
Economic and Political Weekly, August 29, 1998, p. 2286. 14 R. Radhakrishna, “Food and Nutrition Security”, in Kirti S. Parokh, and R. Radhakrishna, India
Development Report 2002, (New Delhi, 2002), p. 55.
197
was 4.6 kg in Kerala, 3.3 kg in Tamil Nadu and 2.3 kg in Andhra Pradesh
which have a low incidence of malnutrtion.15
(iii) The Question of Urban Bias
A number of economists have pointed out that PDS remained limited
mostly to urban areas for a considerable period of planning while the coverage
of rural areas was very insufficient. In fact, in an article published in 1984, P.S.
George estimated that the offtake in the urban areas was about 85 per cent of
the total offtake from the public distribution system.16 However, using data
available from the 42nd round of NSS, S. Mahendra Dev and M.H.
Suryanarayana indicated that for most of the States, with the exception of West
Bengal, the urban bias may not be present. In fact, based on certain criteria they
argued that the PDS is rural biased at the all-India level for rice and coarse
cereals.17
However, with the expansion of PDS in rural areas in later period, this
bias has been corrected. Nevertheless, the mere expansion of PDS in rural areas
does not mean that it is “effective” in delivering the goods. In fact, a report
released by the Government of India in 1991 pointed out that while more than
75 per cent of the fair price shops are in rural areas, “the level of their
effectiveness in terms of actual supply of essential commodities, particularly in
the rural, backward, remote and inaccessible areas, raises questions as to the
meaningfulness of their existence.18
(iv) The Burden of Food Subsidy
PDS is highly subsidised in India and this has put a severe fiscal burden
on the government. Subsidy on PDS arises from the difference between the
issue price and the economic cost of the FCI. While the economic cost of FCI
15 R. Radhakrishna, (2005) op. cit., p. 1820. 16 P.S. George, “Some Aspects of Public Distribution of Foodgrains in India”, Economic and Political
Weekly), September 29, 1984, p. A-108. 17 S. Mahendra Dev and M.H. Suryananaryana, “Is PDS Urban Baised and Pro-rich?”, Economic and
Political Weekly, October 12, 1991, pp. 2365-6. 18 Government of India, Report on the Operations of the Food Corporation of India (New Delhi, 1991),
p. 287.
198
is going up considerably due to the regular hikes in procurement prices, rising
costs of storage and distribution etc., the issue prices are deliberately kept low
by the government in order to supply foodgrains to the masses at low prices. In
1997, the government adopted the Targeted PDS in which issue prices for BPL
families were fixed at 50 per cent of the economic cost of FCI while the issue
prices for APL families were fixed equal to the economic cost. The drastic
reduction in the issue prices for BPL families raised the subsidy burden
considerably. On the other hand, fixation of issue prices at a level equal to the
economic cost for APL families created a situation where APL price under
PDS rose higher than the market price reducing the incentive for APL families
to purchase from the PDS. As a result, the stocks of foodgrains with the FCI
swelled. This created a problem of excess food stocks. To solve the problem of
excess stocks, the issue price for APL families had to be reduced to 70 per cent
of economic cost.
(v) Inefficiencies in the Operations of FCI
The Bureau of Industrial Costs and Prices (BICP) of the Government of
India and some researchers have pointed out a number of inefficiencies in the
operations of the Food Corporation of India. The economic cost of FCI
foodgrains operations has been rising on account of increase in procurement
prices and ‘other costs’ (which include procurement incidentals, distribution
cost and carrying cost). Critics have pointed out that the way out of this malaise
is the entrust the task of procurement and distribution of foodgrains to private
agents in place of the FCI as they are likely to operate more efficiently.
However, as correctly pointed out by V.M. Rao, the food security
system as has evolved in India over the past four-and-a-half decades can be
operated only by a FCI-like organisation. The surpluses of wheat and rice (the
crops to which the food security system in India is limited) are concentrated
only in a few States and thus the procurement operations are also concentrated
in these States. Given the minimum support prices which remain fixed for a
crop year, the farmers take the first opportunity to deliver their produce when
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harvesting starts except when a substantial rise in the price of grain is expected
in the later part of the season. The quantities of grains thus mobilised have to
be allocated to areas allover for country maintaining a steady flow of monthly
installments of grains supplied at a subsidised price. Obviously, this has to be a
command operation which private trade channels working for profit are not
likely to find sufficiently attractive to undertake. The inefficiencies in the
operations of FCI are due to its “highly centralised and bureaucratic mode of
operation.” To rectify this, V.M. Rao advocates the ‘toning up’ of the personnel
and working of FCI on the one hand, and reorganising the food security system
on a decentralised basis on the other hand.
(vi) PDS Results in Price Increases
Some economists have pointed out that the operations of the PDS have,
in fact, resulted in an all-round price increase. This is due to the reason that
large procurement of foodgrams every year by the government actually reduces
the net quantities available in the open market. Taking advantage of the low
supplies in the market, the traders have indulged in speculation raising the
foodgrains prices in the open market to unusually high levels. This dual market
system – the PDS and the open market – operates to the disadvantage of the
poor. As noted earlier, the PDS meets only a fraction of the requirements of the
poor. Therefore, they are compelled to make purchases in the open market
where prices are high. Thus, PDS not only does not meet significant
requirements of the poor but also operates against their interest by pushing up
the open market prices. People not serviced by the PDS at all like casual
labourers on daily wages, migrant workers, and those without proper residential
addresses are doubly disadvantaged because they are not only not covered by
the PDS but also have to pay higher prices for their entire purchases in the open
market.
(vii) Leakages from PDS
Another criticism of PDS relates to the problem of leakages from the
system in the form of losses in the transport and storage and diversion to the
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open market. The major part of the leakage is due to diversion of foodgrains to
the open market because of the widespread prevalence of corrupt practices.
Instead of selling ration at subsidised rates, shopkeepers sell them in the open
market at higher prices, pocketing the difference. According to a study
conducted by Tata Consultancy Services, the all-India diversion of PDS
foodgrains is 31 per cent for rice and 26 per cent for wheat.19 Sometimes,
shopkeepers make bogus entries in the ration cards. S. Mahendra Dev gives the
example of a village in Dahanu taluka in Maharashtra where the tribals had not
even tasted sugar for more than a year. The situation is similar in other Dahanu
villages. The delivery systems in rural areas are very poor. Even if the fair price
shop exists, foodgrains are not available in many places.
4.6.2 Targeted Public Distribution System (TPDS)
With a view to reducing the burden of food subsidy and targeting it
better to the really needy people, the Government of India adopted the Targeted
Public Distribution System (TPDS) from June 1, 1997. TPDS aims at providing
foodgrains to people below the poverty line at highly subsidised prices from the
PDS and foodgrains to people above the poverty line at much higher prices.
Thus, the TPDS adopted by the Government of India maintains the universal
character of the PDS but adds a special focus on the people below the poverty
line (known as BPL).
The key features of TPDS as adopted by the Government of India are as
follows:
(i) Targeting
The most distinctive feature of the TPDS in relation to the previous
policy is the introduction of targeting by dividing the entire population into
below poverty line (BPL) and above poverty line (APL) categories, based on
the poverty line defined by the Planning Commission. The maximum income
19 Quoted in M.D. Asthana, “Rationale for Recent Changes in Foodgrains Distribution under the
Targeted Public Distribution System”, Paper presented at a Seminar held at Centre for Economic and Social Studies, Hyderabad, March 25-27, 2000.
201
level for the population to be covered under BPL was kept at Rs. 15,000 per
annum. Initially a quantity of 10 kg of foodgrains per household per month was
approved. Later on, this was raised to 25 kg per month.
(ii) Dual (Multiple) Prices
The second distinguishing feature is that the PDS now has dual central
issue prices: prices for BPL consumers and prices for APL consumers. A third
price, introduced in 2001, is for beneficiaries of the Antyodaya Anna Yojana
(AAY). In March 2000, a major policy change occurred when it was
announced in the Budget that central issue prices – that is, prices at which the
Food Corporation of India sells grains for the PDS to State governments will be
set at 50 per cent of the ‘economic cost’ of PCI for BPL families and at 100 per
cent of the ‘economic cost’ for APL families. Because of the high prices for
APL families, many of them stopped purchasing from PDS resulting in heavy
build-up of stocks with FCI. Consequently, prices for APL families were
reduced.
(iii) Centre-State Control
A third important feature of the TPDS is that it has changed Centre-State
responsibilities with respect to entitlements and allocations to the PDS. PDS
was and is designed and managed by State governments, and State
governments differ with respect to entitlements, the commodities offered, the
retail price (State issue price) and so on. In the past, the State governments
demanded a certain allocation from the Central pool, and based on certain
factors, most importantly, past utilisation and the requirements of statutory
rationing, the Central government allocated grain and other commodities to
States for their public distribution systems. With the TPDS now, the size of the
BPL population and the entitlement for the BPL population are decided by the
Central Government.
Total number of families covered under BPL and AAY is presently 6.52
crore. Allocations of foodgrains are made to these families at the rate of 35 kg
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per family per month. For APL families, allocation varies from 15 kg per
month to 35 kg per month in different States.
4.6.3 Targeting Review of TPDS
TPDS has been criticized on the following grounds.
The major criticism of TPDS is that it has led to the large-scale
exclusion of genuinely needy persons from the PDS. In this context, Madhura
Swaminathan discusses two types of issues - (i) conceptual issues, and (ii)
operational issues.20 The first concern ‘the definition of the poor’ and the
second concern ‘identification of poor in practice’. Both these issues are very
important and crucial to the working of the TPDS as its very success hinges on
the inclusion of genuinely needy persons under the programme.
(i) Conceptual issue : Definition of poor
The main issue here in how appropriate is the definition of poor applied
in the TPDS? The current definition of eligibility for BPL status is based on the
official poverty line as estimated by the Planning Commission in 1993-94
(adjusted for population levels in 2000). If we use the income poverty line, then
the target group comprised 37 per cent of the rural population and 32 per cent
of the urban population in 1993-94. However, the official poverty line
represents a very low level of absolute expenditure. Low and variable incomes
imply that a much larger section of the population is vulnerable to income
shortfalls than observed by means of a static poverty line. Madhura
Swaminathan has shown that if alternative criteria like nutritional status or food
share are considered, the number of poor who should be granted the BPL status
would be much larger than what the income poverty line estimates.
(ii) Operational issues: Identification in practice
Even if the income poverty line is a conceptually suitable criterion, a lot
of problems have to be confronted in identifying households on the basis of the
20 Madhura Swaminathan, “Strategies towards Food Security”, Social Scientist, September-October
2003, p. 62.
203
criterion at the ground level as we do not have any estimate of the actual
incomes of households. This is quite natural because in a country where the
majority of the population works in the informal sector and receives income on
an irregular basis, income is very difficult to measure.
The fact of the matter is that the whole process of identification of BPL
families in many States has been carried out in a very arbitrary manner. As a
result, there have been large errors of misclassification with genuinely
deserving households excluded and some affluent households included in the
BPL category. About 62 per cent of all BPL and AAY cards were in the hands
of non-poor households, suggesting a large systemic inclusion error.21 High
exclusion errors mean a low coverage of BPL households. High inclusion
errors implies that the APL households receive an unacceptably large
proportion of subsidised grains. A recent study conducted by NCAER has put
the number of ‘ghost’ public distribution cards at a staggering 2.3 crore and
what is even more damning, revealed that as many as 1.21 crore ‘deserving’
poor have been left out of the food security umbrella. The report also found
that the rich have been given the lowest income group ration cards – AAY
cards in 70 per cent of the cases in the North-East and in 30-35 per cent of the
cases in other States.22 In her fieldwork in Bihar, Jos Mooij has discovered that
there are many poor people who never received the BPL ration card.23
To sum up, given the problems both at the conceptual level and
operational level in identifying households below the poverty line, the chances
of mis-identification and excluding the vulnerable population from the TPDS
are very high.
21 Peter Svedberg, “Reforming or Replacing the Public Distribution System with Cash Transfer?”
Economic and Political Weekly, February 18, 2012, p. 56. 22 Jos Mooij, “Food and Power in Bihar and Jharkhand: PDS and its Functioning”, Economic and
Political Weekly, August 25, 2001, pp. 3290-1. 23 Governments of India, Planning Commission, Eleventh Five Year Plan, 2007-12 (Delhi, 2008),
Volume II, Table 4.1.8, p. 138.
204
(iii) Late and irregular arrival of grains in fair price shops
According to Jos Mooij, PDS commodities arrive late and irregular at
the fair price shops if at all. The villagers are poorly informed, and certainly not
in advance. This means that when foodgrains arrive in the shop, the poorest
among the poor may not have sufficient cash readily available to purchase
them. The PDS dealer will only transport so much as he expects to sell within
one or two days. “In short, there is a physical access problem, in the sense that
the commodities may come with irregular intervals or not at all. There is also a
problem of economic access, in the sense that the poorest people do not have
cash ready at the moment stocks arrive.”24
(iv) No variation in purchase across expenditure groups
To assess whether TPDS has really succeeded in targeting the poor
people, we need to examine the purchase from the PDS by households in
different expenditure groups. A successful targeting can be said to be one in
which quantity purchased from the PDS declines systematically with increase
in expenditure class. The Indian TPDS fails this test miserably. In many States,
the data do not show any variation in purchase across expenditure groups. In
States like Kerala and Andhra Pradesh where the PDS was functioning well,
the TPDS has perhaps excluded some persons from the highest expenditure
group but, on the whole, the level and pattern of purchase has not changed
much.25
(v) Decline in offtake and the question of viability of fair price shops
As noted earlier, there was a steep decline in offtake from the PDS in
1990s. The main factor in the decline in offtake was the total collapse in
demand for grain from APL consumers as the price differential between issue
prices for APL families and the open market prices had considerably narrowed
down. This fall in offtake of APL families from the PDS, in turn, adversely
24 Supra note 22. 25 Madhura Swaminathan, op. cit., p. 67.
205
affected the viability of the fair price shops. With a small number of ration
cards to serve, and upper bounds on margins that can be charged to BPL
consumers, the net profits of fair price shop owners/dealers declined. As a
result, many ration shops became unviable.
(vi) TPDS has failed in transferring cereals from surplus to deficit
regions
According to Madhura Swaminathan, TPDS has failed in the regional
task that was performed by the earlier PDS, namely of transferring cereals from
surplus to deficit regions of the country. Historically, PDS supply and offtake
were higher in the Southern States as well as in the West, the North-East, the
Hill States and the Islands. The areas where PDS offtake was relatively high
were not only deficient in terms of cereal production but also tended to be areas
of low cereal consumption. The policy of targeting and allocation of grain on
the basis of the income poverty line has worked against the earlier objective of
price stabilisation through grain movements across the country.
(vii) Burden of subsidy has increased
While one of the basic objectives of TPDS was to reduce the burden of
food subsidy, it has in effect achieved just the opposite – the burden of food
subsidy has increased. This is on account of various reasons: (i) non-exclusion
of APL families from the TPDS; (ii) low-offtake from the PDS by APL
families which increased the stocks with the PCI forcing upon it costs of
handling and storage etc.; and (iii) low prices for BPL families. Introduction of
Antyodaya Anna Yojana in 2001 which envisages the supply of wheat and rice
at only Rs. 2 per kg and Rs. 3 per kg respectively to the poorest 2.5 crore BPL
families has pushed up the burden of subsidy further.
A Programme Evaluation Organisation (PEO) Study (2005) points out
another important fact. According to this study, during 2003-04, out of an
estimated subsidy of Rs. 7,258 crore under TPDS, Rs. 4,123 crore did not reach
206
BPL families. Moreover, Rs. 2,579 crore did not reach any consumer but was
shared by agencies involved in the supply chain.26
The above discussion shows that the TPDS has failed on many counts. It
has failed to reach the genuinely needy and failed to provide them adequate
food at a reasonable price. It has failed to reduce the burden of food subsidy. It
has weakend the entire food delivery system and adversely affected the
viability of fair price shops. It has also weakened the pattern of grain allocation
across States and thereby weakened the transfer of grain from areas of surplus
production to areas of deficit production and low consumption. Moreover, it
has increased the incentives for leakages and malpractices and, hence,
corruption.
Because of the above criticisms of TPDS, many economists in recent
times have advocated the dismantling of the entire structure and giving cash
transfers to the poor. For instance, a panel headed by Planning Commission
deputy chairman Montek Singh Ahluwalia has, in a Report submitted in March
2011, recommended that rather than foodgrains, the poor in India should get
money in an electronic account every month and should have the freedom to
buy food of their choice from the fair price shops. The Committee has
recommended that in the first week of every month, the Government directly
transfer the subsidy amount to a unique identification (UID) or Aadhaar
number-linked smart card, to be in the name of a woman family member above
18 years of age. According to Ahluwalia, “Giving choice to beneficiaries will
empower them. It will also help plug leakages.”27
However, as correctly pointed out by Himanshu, cash transfers cannot
serve any purpose in the case of large-scale deficits of basic services. They can
help in creating demand for basic services but can work only when these
services have been provided universally and efficiently. “In other words, the
saturation in the supply of basic services is a precondition for cash transfers to
26 Eleventh Five Year Plan, op. cit., Box 4.1.1, p. 135. 27 Dipa Sinha, “Cost of Implementing the National Food Security Act”, Economic and Political
Weekly, September 28, 2013, p. 31.
207
work. Such transfers are neither a solution to nor a substitute for the lack of
supply of essential services. Their role is to ensure access to basic services for
those households that are unable to access them because of extraneous
reasons.”28 At high levels of malnutrition, cash transfers cannot substitute the
essential role that the PDS plays.
4.7 NATIONAL FOOD SECURITY ACT, 2013
The objective of the National Food Security Act (NFSA) was defined as
to ensure “public provisioning of food and related measures, to enable assured
economic and social access to adequate food with dignity, for all persons in the
country, at all times, in pursuance of their fundamental right to be free from
hunger, malnutrition and other deprivations associated with the lack of food
and related matters.” The NAG recommended the shifting from household food
entitlements to individual food entitlements. It presented two arguments in
favour of this. First, per capita entitlements are ‘fairer’: households with more
members will be entitled to more food. Second, per capita entitlements would
do away with the need for a precise definition and identification of
‘households’, which tends to be difficult and prone to manipulation.
The National Food Security Act (NFSA), 2013 seeks “to provide for
food and nutritional security in human life cycle approach, by ensuring access
to adequate quantity of quality food at affordable prices to people to live a life
with dignity and for matters connected therewith or incidental thereto”.
4.8 A CRITICAL EVALUATION OF NFSA
There are so many grounds and reasons on the basis of which the
National Food Security Act has been criticized. To make it more implementing
and to get maximum utilization of this Act, we need to critically analyse the
concept and its drawbacks.
28 Prachi Misra, “Financial and Distributional Implications of the Food Security Law”, Economic and
Political Weekly, September 28, 2013, p. 30.
208
4.8.1 Cost of Implementation
According to the estimates put forward by the Union Food Minister in
various interviews and in his speech in Parliament, as a result of NFSA, the
annual food subsidy will go up to Rs. 1.3 lakh crore. Although the details of the
estimate are not available, the following calculations could explain the basis.
According to Schedule IV of the NFSA, the foodgrains to be allocated to the
PDS under the Act will be 54.9 million tonnes. Further, about 6.5 million
tonnes are now allocated for other welfare schemes. This makes a total of 61.4
million tonnes. Dipa Sinha estimates the average subsidy at Rs. 21.5 per kg.29
Then for 61.4 million tonnes, the total subsidy comes to Rs. 1.32 lakh crore
(which is 1.3 per cent of GDP at current market prices). Given the fact that
about Rs. 85,000 crore of food subsidy was already being provided in 2012-13,
supporters of NFSA feel that raising another Rs. 45,000 crore should not be a
big burden. However, some critics point out that the incremental cost of NFSA
will be much more than Rs. 45,000 crore if various other expenditures on
implementation are also taken into account – like the costs to be incurred for
setting up and running of Food Commissions and District Grievance Redressal
Offices; expenditures on inter-State transportation of foodgrains; costs to be
incurred on identifying beneficiaries, for strengthening the capacity of food and
civil supplies corporations, for setting up vigilance committees to monitor the
implementation; cash benefits to pregnant and lactating women; food security
allowances to be paid in the case of non-supply to entitled persons, etc. and
other sundry expenses. Prachi Misra estimates that the incremental cost of
NFSA could vary from Rs. 44,711 crore to as high as Rs. 76,486 crore in 2013-
14.30 The cost will increase further in 2014-15 and 2015-16. A Discussion
Paper prepared by Ashok Gulati et al. for CACP (Commission for Agricultural
29 Dipa Sinha, “Cost of Implementing the National Food Security Act”, Economic and Political
Weekly, September 28, 2013, p. 31. 30 Prachi Misra, “Financial and Distributional Implications of the Food Security Law”, Economic and
Political Weekly, September 28, 2013, p. 30.
209
Costs and Prices) estimates the food subsidy at Rs. 6.8 lakh crore over the three
year period 2013-14 to 2015-16.
4.8.2 Problems in Procurement
The above-mentioned CACP report argues that production has to go up
by 25 million tonnes to meet NFSA needs. The figure is arrived at assuming
that procurement must be maintained at 30 per cent of production of wheat and
rice. Dipa Sinha raises the following objections to this estimate: First, it is not
clear why procurement cannot be increased by a few percentage points,
especially when our current procurement is already more than 30 per cent of
production. Second, this calculation assumes a requirement of 75 million
tonnes for the NFSA whereas what is required is only 62 million tonnes. Third,
the projected increase in agricultural production is not taken into account, and
it is assumed that foodgrains production will remain constant. Fourth, the
production of only wheat and rice is considered, and coarse cereals have not
been included in the CACP’s numbers.31
Dipa Sinha rightly argues that production and procurement of cereals
has overall been increasing since 2000-01 (the production of cereals rose from
185.7 million tonnes in 2000-01 to 238.7 million tonnes in 2012-13 while
procurement rose from 35.9 million tonnes to 70.6 million tonnes over the
period). The current procurement is 30 per cent of the production and is
sufficient to implement the Act.
4.8.3 The Risk of Leakages
A study of PDS and TPDS earlier in this chapter points to the fact that
there are large leakages from the system. This is indeed a cause for concern.
However, recent studies show some improvement in this respect. Although
even 35 per cent is unacceptably high yet in States where PDS reforms are
being undertaken (like doorstep delivery, computerisation, effective grievance
31 Supra note 29 at 32.
210
redressal mechanism etc.), declining trends in leakages are being observed,
raising hopes regarding the future.
4.8.4 Identification of Beneficiaries
The main problem in implementing the NFSA is how to identify the
beneficiaries? Although the Act purports to cover 67 per cent of the population,
it does not provide any identification criteria based on which beneficiaries will
be chosen. The Socio-Economic and Caste Census (SECC) data can give some
direction on how this can be done, but it has not yet been verified and made
public. However, as correctly pointed out by Dipa Sinha, instead of trying to
identify the poor, it would be better to adopt an ‘exclusion approach’ under
which the rich are kept out and all the rest are covered. This can be done easily
with the increased coverage, especially in rural areas. In this respect, one can
take a clue from the Chhattisgarh Food Security Act (CFSA) which proposes
four criteria – excluding income tax payees, households owning a pucca house
in urban areas that has a carpet area of more than 1,000 square feet, and/or
liable to pay property tax and households in non-scheduled areas that hold
more than 4 hectares of irrigated land or more than 8 hectares of non-irrigated
land. Such simple and objective criteria can be developed for each of the
States.
The main importance of the Act is that it brings the right to food within
the framework of legally mandated entitlements. This can be a tool for people
to demand the State’s accountability for hunger. One more important point that
is often missed in the discussion is the likely impact of NFSA on other sectors
of the economy. As correctly pointed out by Arun Kumar, the NFSA will raise
the demand for other goods and give the sluggish economy a much-needed
boost. This is because the availability of cheap foodgrains will lower the food
bill of the families and they would spend the extra amount thus saved on other
items. This amount could be substantial because the poor spend 50-60 per cent
of their budget on food. “If it is assumed that an additional 30 crore people
211
would get the cheaper food, the demand for other items of consumption would
rise significantly, giving the sluggish economy a boost.”32
4.8.5 Don’t Need Another Program
They feel that the Food Bill is yet another welfare scheme, imposed on
the already existing social welfare programs – such as the Antyodaya Anna
Yojana which is a part of the Targeted PDS scheme, the midday meals scheme
of certain states and the Anganwadis along with ICDS. They feel that only the
weakest section (under the Antyodaya scheme) of the society needs assistance
(and not the wider section of the populace) and these existing schemes are
already enough to cater to their needs. Rather than yet another Act, the
government should strengthen these programs and plug loopholes. Expanding
the scope of the Antyodaya Anna Yojana could have been a good start.
These critics appear to be under the misconception that the government
is making new financial and grain commitments under the NFSB. In fact, the
NFSB does little more than turning the existing food security schemes such as
the Integrated Child Development Services (ICDS) Scheme, Midday Meal
(MDM) Scheme, Public Distribution System (PDS) and maternity entitlements
etc into legal entitlements.
4.8.6 Criticism by the Right to Food Campaign
The Right to Food Campaign, appears to have several objections and
finds the Food Bill too inadequate. It finds the Bill extremely inadequate in
offering food entitlements, particularly towards combating the widespread
malnutrition and needs serious amendments before passage. The proposed Bill
appears to have delinked food security from nutritional security which is
contrary to the 1996 Rome Declaration on World Food Security signed by
India.
The Declaration reaffirmed “the right of everyone to have (physical and
economic) access to safe and nutritious food, consistent with the right to
32 Arun Kumar, “It’s a Win-Win Situation”, Hindustan Times, August 21, 2013, p. 10.
212
adequate food and the fundamental right of everyone to be free from hunger.”
Further Article 47 of the Constitution of India instructed the State to raise “the
level of nutrition and the standard of living of its people …”
It has been consistently demanding a comprehensive food security law
that incentivises agriculture production, provisions for local procurement and
local storage along with a decentralized and deprivatized universal PDS. It also
wants safeguards against commercial interference including GMs in any of the
food/nutrition related schemes.33
Some of its major objections are:
1. It does not specify any time frame for rolling out the entitlements in the
Act. ― It will be implemented as and when the States get ready. Several
entitlements and the grievance redressal structure would require state
legislatures make adequate budgetary allocations. Implementation of the
Act may be affected if states do not pass requisite allocations in their
budgets or do not possess adequate funds.
2. It continues with a Targeted PDS, excluding 33 % of the population
from accessing the PDS as a right, giving scope to large exclusion errors
of the poor in the country as a whole.
3. While the ICMR norms recommend that an adult requires 14 kgs of food
grains per month and children 7 kgs; the Act provides for reduced
entitlements to 5 kgs per person per month. There is an absence of
entitlements to pulses and oil in the PDS, so fails to address the
widespread problem of malnutrition. [In fact, members of the Right to
Food Campaign met members of Parliament and gave them 165 gm of
foodgrains (the daily allowance adding up to the entitled 5 kg of
foodgrains per month) to show how paltry the provisions of the Bill are.]
4. The maternal entitlements for lactating mothers will be according to the
specifications of the Central government scheme which has two child
norm. So the Act is unfair to the children after second live birth.
33 The National Food Security Bill, 2013: Will it Really Assure the Poor Freedom from? Available at
http://socialissuesindia.wordpress.com/
213
5. The Act continues to allow for the entry of private contractors and
commercial interests in the supply of food in the ICDS, especially by
insisting on specific norms related to Food Safety Acts and
micronutrient norms (prescribed in Schedule 2). These standards can
only be met through centralized factory based food production. The
Supreme Court has also ordered to keep private contractors away from
the food schemes for children, particularly in a take-home ration of
ICDS scheme. Further, the effort to provide local food through self-help
groups etc. have also been completely ignored.
6. The Act does not have an effective grievance redress mechanism. In the
Act, it begins at the district level which is ridiculous; people need it the
local Panchayat or Gram Sabha level. The grievance redressal
framework may also overlap with that provided in the Citizens’ Charter
Bill that is pending in Parliament.
7. The Act does not provide any agriculture and production-related
entitlements for farmers in spite of the fact that more than 60% of the
people in this country are dependent on agriculture for their livelihoods.
8. The Act is silent about the destitute, homeless and starving persons in
the final version. They were considered in the 2011 version.34
4.8.7 Criticism by the National Commission for the Protection of Child
Rights (NCPCR)
Country’s watchdog for child rights, the National Commission for the
Protection of Child Rights (NCPCR) is unhappy about the following
provisions:
Children under the age of two years have been excluded from the take
home ration provided under the nutrition scheme of Integrated Child
Development Scheme (ICDS).
34 Ibid.
214
The two-child norm that will, in effect, deny entitlements to the third
and onward born.
The term malnutrition does not figure in the Food Act as though the
term malnutrition has nothing to do with food security or insecurity.
There are no entitlements for children in the situation of malnutrition,
which would be 70-80 per cent of all poor children and 40-50 per cent of
all children in the country. Without focus on child malnutrition the Bill
has no meaning for the country.
4.8.8 No Role for State Governments in Decision Making
The Food Act denies flexibility to states running the food program based
on local realities. Under the National Food Security Act, the State governments
do not have the right to identify the beneficiaries, extension of rights or making
efforts at giving better security.35
At least 15 states including Chhattisgarh, Bihar, Tamil Nadu, Madhya
Pradesh, Delhi and all 4 southern states already have their own subsidized food
program and their own count of beneficiaries. The entitlements and count of
beneficiaries under the Central Food Act are different and the Act is supposed
to be implemented by the state governments. Most states provide wider
coverage than the Central Act. The content of the proposed Act appears to
assume that there are no state food programs. Thus, there will be confusion and
implementational issues once the Act is passed.36
There are other issues too that deny flexibility to the states in helping the
masses. The Chief Minister of Chhattisgarh, for instance, has raised some good
points. For example, he suggested allowing the states to decide whether to
organize PDS distribution on a household or per-capita basis. It is an important
point: The per-capita approach is more logical, but requires a level of
administrative capability that is yet to be developed in some states. He also
argued for enhancing PDS entitlements, beyond the norm of ‘5 kg per person’
35 Ibid. 36 Ibid.
215
that is now being proposed. This also makes sense: if an infrastructure of
redistribution is in place, it might as well be used for bigger provisioning -
including other food commodities such as pulses and oil.37
States like TN and Chhattisgarh have almost universal coverage,
implementing the Central Food Bill would mean roll back of their superior
programs. Although the food minister assures of protecting their existing food
grain allocations, but they are skeptical and feel it can be changed anytime in
the future. Tamil Nadu has expressed its desire to be exempted from the
Central Bill saying that it already has a more effective, robust and time tested
program. 38
The Act requires a food commission in each state and a grievance
officer in each district to look into complaints and implementation. This sounds
good but states have their own mechanisms to handle grievances. Again it will
create confusion and perhaps state-Center issues. In fact, a part of the states’
lack of enthusiasm towards the Central Food Act comes from such stiff
provisions that will deny them flexibility in implementation. Since all Central
schemes are invariably implemented through the state governments, there is
always a basic question about the role of the Central government. The pointer
is given by comments of state Chief Ministers in the NDC meetings.39
4.8.9 ICDS and Mid-Day Meal Scheme
(i) Integrated child development services
Integrated Child Development Services (ICDS) launched in 1975 is a
centrally sponsored scheme implemented by the Ministry of Human Resource
Development. The Central Government is responsible for programme planning
and operating costs while State governments are responsible for programme
implementation and providing supplementary nutrition out of their own
resources. ICDS integrates supplementary nutrition with primary health care
37 Ibid. 38 Ibid. 39 Ibid.
216
and informal education. It is one of the largest child intervention programmes
in the world with a holistic package of six basic services for children upto 6
years of age, and for pregnant and nursing mothers. These services are: (1)
supplementary feeding (the ICDS provides to a child food ration for 300 days,
containing 500 calories and 12-15 gms protein and to pregnant and lactating
women food ration containing 600 calories and 18-20 gms protein); (2)
immunisation; (3) health check-ups; (4) referral services; (5) health and
nutrition education to adult women; and (6) non-formal pre-school education to
3-6 years old. ICDS is being implemented through one platform, i.e.,
anganwadi centre (or child care centre). The staff includes CDPO (Chief
Development Project Officer), supervisors, anganwadi workers and helpers.
The most important programme under ICDS is the Rs. 8,000 crore a year
Supplementary Nutrition Programme (SNP) to fight child malnutrition.
(ii) Mid-day meal scheme
The national programme of nutritional support to primary education,
commonly known as the mid-day meal (MDM) scheme launched in 1995, is a
nationwide Central scheme intended to improve the enrollment and regular
attendance and reduce dropout in schools. It is also intended to improve the
nutritional status of primary school children. MDM is the world’s largest
school feeding programme reaching out to about 11 crore children in over 12
lakh schools (EGS) centres across the country. The scheme is being
implemented in all States and Union Territories. In order to improve the quality
of meal and ensure better infrastructural facilities, the scheme has been revised
many times over the years. The scheme aimed at providing cooked mid-day
meal with 300 calories and 8-12 grams of protein to all children studying in
Classes I-IV in Government and aided schools and alternate and innovative
education centres.
217
Supreme Court Orders
Since 2001, the Supreme Court has been monitoring the implementation
of ICDS in the context of a “Public Interest Litigation” (PIL) on the right to
food. In response to this PIL, Supreme Court has been issuing interim orders
that reinforce the mandate and importance of ICDS, which had faded somewhat
between 1975 and 1990s.
The order dated November 28, 2001 gave an unprecedented boots to
ICDS, with the Supreme Court stating that the scheme must be implemented in
full and must be extended to each child, adolescent girl, pregnant woman and
nursing mother in India. The Court further stated that additional supplementary
nutrition under the scheme should be made available to each malnourished
child and that every settlement should have an anganwadi. The order states,
“We direct the State governments and Union Territories to implement the
Integrated Child Development Services (ICDS) in full and ensure that every
ICDS disbursing centre in the country shall provide as under: (a) each child
upto six years of age to get 300 calories and 8-10 grams of protein; (b) each
adolescent girl to get 500 calories and 20-25 grams of protein; (c) each
pregnant woman and each nursing mother to get 500 calories and 20-25 grams
of protein; (d) each malnourished child to get 600 calories and 16-20 grams of
protein; (e) have a disbursement centre in every settlement.”40
Further orders were issued in April 2004 and October 2004. For
example, on April 29, 2004, the Supreme Court directed that “all 0-6 years old
children, adolescent girls, pregnant women and nursing mothers shall receive
supplementary nutrition for 300 days in a year.” The Supreme Court also
ordered that ICDS contracts should be handed over only to local self-help
groups, women’s groups, or mahila mandals, and village communities.
However, the implementation of the ICDS and mid-day meal scheme
has remained woefully inadequate. Taking serious note of the poor
40 Nandini Nayak and Naresh C. Saxena, “Implementation of ICDS in Bihar and Jharkhand”, Economic
and Political Weekly, August 26, 2006, p. 3664.
218
implementation of ICDS, the Supreme Court directed the Government in
December 2006 to:
1. Set up at least 14 lakh functional anganwadi centres in a phased manner
by December 2008. While doing so, the Centre should identify SC and
ST hamlets/habitations for anganwadi centres on a priority basis.
2. Ensure that the population norms are maintained – the upper limit is of
one anganwadi centre per 1,000 population, the minimum limit is 300.
3. Entitle rural communities and slum dwellers to “anganwadi on demand”
for a settlement with at least 40 children under 6 but no anganwadi.
4. ICDS services should extend to every child under the age of 6, all
pregnant women and lactating mothers and all adolescent girls.
In order to comply with the above directives of the Supreme Court, the
government expressed its commitment to expand the scheme in order to cover
all habitations and settlements during the Eleventh Plan period and to reach out
to pregnant women, lactating mothers and all children below the age of six.41
In line with this commitment, the Government has increased the budget
allocation for ICDS and MDM schemes considerably during the recent years.
In addition, ICDS has been universalised. The benefits of MDM scheme have
been extended to as many as 11.04 crore children across the country.
(iii) A critical appraisal of ICDS and mid-day meal scheme
There are many reasons for the dismal performance of ICDS and MDM
scheme as the following discussion brings out:
1. The overall impact of ICDS and MDM scheme on malnutrition has
remained very limited due to a meagre allocation of resources to this
programme and faulty project design.
2. The programme is regressively distributed between the States. The
States with a high degree of malnutrition like Bihar, Madhya Pradesh
and Uttar Pradesh have a relatively low coverage.
41 Ibid.
219
3. The poor quality of food served under MOM in many schools in
different States across the country is a serious cause of concern. Reports
of children falling ill after consuming contaminated food continue to
pour in from various parts of the country. In 2010, a Planning
Commission report on implementation of the scheme across 17 States
showed that most schools had inadequate infrastructure, served food of
questionable quality and lacked basic hygiene. Schools in Bihar, where
water in scarce, were cooking meals using water from ponds, making it
difficult to maintain hygiene. Even in the capital Delhi, a lot of samples
collected from the municipal schools fail the nutritional test. The meal
has a high calorie and protein count, but is deficient in vitamins and
micronutrients. In fact, in 2012, the corporations (comprising North,
South and East Corporations of Delhi State) found 83 per cent meals
nutritionally deficient. Moreover, utensils and dining areas were often
found to be unclean and there were three incidents of food poisoning in
the last three years.42
4. While ICDS is meant to be a package of 'integrated services' including
nutrition services, nutrition counselling, micronutrient supplementation,
and antenatal care for pregnant women, in practice the focus has tended
to get limited to supplementary nutrition programme (SNP). Further, the
main focus of SNP has been on children in the age group of three-six
years. Younger children have been comparatively neglected if not
excluded. As correctly pointed out by Shanti Ghosh, there is a need to
pay more attention to children under the age of three years as this is the
critical period in the development of the child, when his or her
‘capabilities’ (health, nutrition, learning abilities etc.) are largely
determined.43 For example, this is the time when 90 per cent of the brain
develops.
42 Times of India, July 19, 2013, p. 4. Mint, July 18, 2013, p. 1. 43 Shanti Ghose, “Food Dole or Health, Nutrition and Development Programme?”, Economic and
Political Weekly, August 26, 2006, p. 3671.
220
5. Tara Gopaldas has pointed to the need to distinguish between overt (or
raw) hunger and ‘hidden hunger’. The former implies the need to fill the
belly every few hours due to the ‘pangs of an empty stomach’ while the
latter implies micronutrient deficiencies such as inadequate intake of
iron, calcium, iodine or Vitamin A. The ‘hidden hunger’ has been
neglected in ICDS as it is “not felt, recognised or voiced by the child or
her parents.”44 However, it has serious consequences for the child’s
health.
6. The FOCUS (Focus on Children Under Six) survey shows that health
services under ICDS are quite patchy. The main activity in this field is
child immunisation and, in this respect, the programme does not seem to
playa useful role. Pre-school education (PSE) is another neglected
aspect of ICDS with only Tamil Nadu doing well.
7. The most serious problem in ICDS relates to ‘implementation and
accountability’. Since children have no ‘voice’ in the system, there is no
self-correction mechanism whereby implementation failures lead to
outspoken protest and timely redressal. As a result, ICDS is poorly
implemented and suffers from sheer neglect. While the government
claims to have univeralised the ICDS by sanctioning more than 13 lakh
anganwadi centres, the truth is that more than 1.25 lakh have no
anganwadi workers. Additionally, more than 1.10 lakh sanctioned posts
of helpers are lying vacant. The workers are paid Rs. 3,000 and the
helpers Rs. 1,500 per month. This is the remuneration for taking care of
children below the age of six, for nutruting our country’s future. Despite
the claim of universalisation, only 63 per cent of such children are
covered under the scheme. As far as MDM scheme is concerned, it
survives on a monthly honorarium of Rs. 1,000 paid to an estimated 27
lakh workers. A study by Archana Prasad of Jawaharlal Nehru
University finds that, as of April 2012, the revised cooking cost
44 Tara Gopaldas, “Hidden Hunger: The Problem and Possible Interventions”, Economic and Political
Weekly, August 26, 2006, p. 3671.
221
provided per child for a meal was Rs. 3.11 at primary and Rs. 4.65 at
upper primary level – totally insufficient to provide nutritional food to
the children.45
8. One of the most important reasons for failure of ICDS and mid-day meal
scheme is rampant corruption. The FOCUS report released on December
19, 2006 points out that “rampant corruption, fudged records and bland
‘panjiri’ (ready-to-eat energy mix)” is the reality of the ICDS. For
example, in Uttar Pradesh the government spends Rs. 500 crore a year to
procure pushtahar (nutritious food) for distribution among children and
pregnant and lactating women living in rural areas through 1.38 lakh
anganwadi centres under the ICDS. But the food does not reach most of
them. It has been reported that at several places, panjiri meant for mid-
day meals is being used illegally to feed the cattle of the rich and
influential by the ‘panjiri mafia’ that controls the supply of nutrition to
the poor.
(iv) Financial implications of the NFSA
Public discussion of the NFSA has centered mainly on its economics;
the costs of such an ambitious program are deemed unaffordable for India.46 In
addition to the food grain subsidy, the NFSA would create expenditures due to
the cash incentive scheme, cost-sharing for transportation and food security
allowance, institutional mechanisms, and PDS reforms. Cost estimates for these
expenditures are not possible presently, due to lack of clarity on these issues;
however, a previous government estimate had mentioned that the cash
incentive scheme and reforms to improve efficiency may cost about US$3
billion.
It has been predicted that the NFSA would worsen the already
45 Quoted in Sitaram Yechury, “Getting Our Priorities Right”, Hindustan Times, November 19, 2013,
p. 14. 46 A. Gulati, J. Gujral, T. Nandakumar, National Food Security Bill—Challenges and options. New
Delhi: Commission for Agricultural Costs and Prices, Government of India, 2012.
222
compromised fiscal situation of the country.47 However, it is difficult to make
sense of claims that the recent depreciation of the Indian rupee and the reaction
of markets are a fallout from the passage of the NFSA48, when the immediate
direct contribution of the NFSA to the fiscal deficit is to raise it by only about
0.4% of GDP for the first year of implementation. The rise in fiscal deficit is
primarily due to the slowing down of GDP growth, depreciation of the rupee,
and higher global oil prices. A continuous policy logjam at the level of the
government and financiers that has brought infrastructure development to a
standstill, coupled with volatility in fuel prices, has been held responsible for
the slowing of economic growth.49
It is indeed surprising that government spending on education, nutrition,
primary healthcare, and research and development continues to be counted
toward the revenue deficit, as if such spending were unproductive, NCT of
Delhi when such investments help toward improvement of human and social
capital and yield returns through intergenerational equity.50 In a broader
perspective, India spends about 2% of its GDP on social protection schemes,
less than its neighbors such as Sri Lanka.51 Any attempts to increase social
sector spending should therefore be welcome, and an argument against the
NFSA based solely on rising costs cannot be relevant.
4.8.10 Population Growth as an Obstacle
The reasons why population growth is regarded as an obstacle to
economic development are divided into the following categories: (1)
Population growth and the declining land-man ratio, (2) Population growth and
capital formation, and (3) Other adverse effects of population growth.
47 S.S. Manmonias Bhalla, FSB: 3% of GDP. The Indian Express, 6 July, 2013 available at:
http://tinyurl.com/ pq7csoq. 48 Dhasmana I. Rupee depreciation partly reflects high CAD: Moody’s Business Standard, 29 August,
2013. Available at: http://tinyurl.com/pkoq7zs. 49 Reserve Bank of India. Macroeconomic and monetary developments. Second quarter review 2013–
14. Mumbai: Reserve Bank of India, 2013. 50 S. Roy, India’s rising fiscal deficit: Should we worry? Wall Street Journal India, 5 October, 2009.
Available at: http:// tinyurl.com/ngpf6zd. 51 Asian Development Bank. The social protection index. Assessing results for Asia and the Pacific.
Mandaluyong City, Philippines: Asian Development Bank, 2013.
223
(i) Population growth and the declining land-man ratio
In the first place, it is asserted that the pressure of population on land has
been steadily increasing and with it land-man ratio is becoming increasingly
adverse. This, in turn, is proving to be a serious obstacle to development. This
increase in density of population may look alarming, if one makes the
assumption that over the years neither the utilisable resources have increased,
nor the technological knowledge has grown. Had nothing of this sort happened,
the population growth would indeed have been disastrous for the country.
However, population growth should always be seen in relation to the
development of productive forces. In an economy where productive forces
remain arrested due to retrogressive socio-economic relations, favourable land-
man ratio will be of little help. The near stagnation in India during the British
period in spite of lower density of population, clearly proves this point. Since
Independence though the country has recorded a rate of population growth
which is unprecedented for the subcontinent, and the density of population in
isolation looks quite alarming, yet the country has not only succeeded in
breaking the low level equilibrium trap, but has also made some advance on the
path of development. A lot of evidence on development from other densely
populated countries further confirms that there is no negative correlation
between density of population and underdevelopment. But in India’s case, it
must be admitted that some of the gains of economic growth have been wasted
on supporting the growing population. Had India’s population growth been
modest, the country’s development performance would have looked far more
impressive.
Some other economists follow a different line of argument. Their main
contention is that due to rapid growth of population over the years, its pressure
on agricultural land his increased and cultivable land per capita has declined. In
their opinion, this situation is hardly conducive to development. The growing
pressure of population on land has also resulted in subdivision and
224
fragmentation of holdings. On these fragmented holdings, there is not much
scope for raising the farm productivity.
(ii) Population growth and capital formation
The impact of rising population acting as a drag on economic resources
is felt in a variety of ways. A high growth rate of population has been a
retarding factor to raising the levels of per capita income earlier. Ever since
Mathus wrote his celebrated essay on population attention was focused on the
problem of population versus food security. There is no doubt that per capita
cultivated area is gradually on the decline in India.52 The other argument which
finds extensive support in academic as well as non-academic circles is that
rapidly growing population makes increasing demands on resources for
unproductive purposes and thus hinders capital accumulation. And since
growth is assumed to be a function of capital accumulation, it is quite logical to
infer from the fact that in a country like India, where rate of population growth
continues to be high, much development would not materialise. This argument
though not entirely wrong misses two basic points having great relevance for
any backward economy, including India.53
In the first place, savings in such an economy are done mostly by the
people in relatively higher income brackets. From whatever limited information
is available about birth rates among various sections of people, it is clear that
the birth rate is far lower among the relatively well-off people than the overall
birth rate for the country. Therefore, the overall high birth rate in a country like
ours does not erode the saving potential of the country. Secondly, for the poor
people an additional child is not a liability, as they hope to derive greater
benefit from him in terms of income, services and security than the cost they
would be required to incur on his upbringing.54
52 Ruddar Datt, K.P.M. Sundhram, “Indian Economy”, S. Chand & Company Ltd., 2009, pp. 56-57. 53 Ibid. 54 A.N. Aggarwal, “Indian Economy – Problems of Development and Planning”, New Age
International Publishers, ed. 2011, p. 96.
225
Even if their expectations prove to be incorrect, the country’s savings
would not be affected; the only thing that might happen then would be that
their personal consumption would fall. Under these circumstances, many of
these people will find themselves being pushed below the poverty line. Thus, in
spite of the fact that rapid population growth may not necessarily adversely
affect the capital formation and also the rate of economic growth, the well-
being of the people particularly of those in the lower income category, will
receive a severe knock. India’s case clearly proves this point. Since a major
part of the increase in population takes place in the rural areas, it also signifies
that the share of fairly consumption in total food production will increase and
much less will be left over as marketable surplus.55
(iii) Other adverse effects of population growth
In addition to the above arguments, it has been asserted that rapid
population growth adversely impacts employment situation and standard of
living. It also results in food shortage and import of foodgrains and usually
prevents change in occupational distribution of a backward economy.
1. Adverse impact on employment situation. The rapidly increasing
population of the developing countries has resulted in large-scale
unemployment and underemployment. Because of the failure of the
secondary and tertiary sectors to expand employment opportunities at a
fast enough rate, more and more people have to fall back on agriculture
to eke out a living. The pressure on agriculture increases leading to the
problem of disguised unemployment. In labour surplus economies like
India, disguised unemployment is said to have assumed serious
proportions with the result that the marginal productivity of labour falls
to very low levels and may even touch zero.
2. Adverse impact on per capita income and standard of living. Rapid
growth of population in the developing countries has made it difficult to
55 Ibid.
226
raise the level of per capita income and the standard of living of the
masses. As noted above, the pressure of population on land has
increased leading, in turn, to low agricultural productivity and large-
scale disguised unemployment. Naturally, these result in low per capita
income and low standard of living. The dependency burden in the
developing countries is greater than in the developed countries since the
working force in the former is required to support almost twice as many
children as they do in the latter countries. This also results in a lower
standard of living in the developing countries.56
3. Shortage and import of foodgrains. Because of their rising population,
the demand for food in many developing countries is increasing rapidly.
However, because of low agricultural productivity, the supply of
foodgrains has failed to keep pace with their increasing demand. This
has led to serious food crises in many developing countries pushing a
number of persons in them to the verge of starvation at times. This has
forced these countries to resort to large- scale imports of foodgrains off
and on. Because their export earnings are limited, such imports of
foodgrains have created serious balance of payments crisis for the
developing countries. Their programmes of industrialisation have also
suffered a setback because foreign exchange resources which could have
been used to import capital goods to speed up the pace of
industrialisation are used up for the imports of foodgrains.
4. Adverse impact of feeding growing population. With rapidly growing
population, it becomes necessary for the government to arrange for
adequate surplus of foodgrains for the growing masses. Thus, price
incentives have to be provided to farmers to encourage them to produce
more. At the same time, it becomes necessary to provide ample quantity
of foodgrains at low prices to a large number of people whose incomes
56 A higher dependency burden can also worsen income distribution because a higher proportion of the
population is at the young low-earning end of the spectrum. See Robert Cassen, “Development and Population”, Economic and Political Weekly, Special Number 1976, p. 1183.
227
are very low. As a result, the burden of food subsidy increases to very
high levels and the resources that could have been used for increasing
production and productivity levels in the economy are used up just to
provide for the consumption needs of the population.
5. Prevents change in occupational distribution of population. Rapid
population growth prevents change in occupational distribution of
population in a backward economy “as long as employment creation
remains an important goal of economic policy”. Since most low income
economies cannot afford to risk large-scale unemployment, rapid
population growth in these countries “postpones the transformation of
traditional economy into one dominated by the manufacturing sector.
This is not only because of the agricultural requirements of growing
numbers, but also because of the relative investment costs of job
creation in agriculture and manufacturing.”
(iv) Storage and import of foodgrains
Because of their rising population, the demand for food in many
developing countries is increasing rapidly. However, because of low
agricultural productivity, the supply of foodgrains has failed to keep pace with
their increasing demand. This has led to serious food crises in many developing
countries pushing a number of persons in them to the verge of starvation at
times. This has forced these countries to resort to large-scale imports of
foodgrains off and on. Because their export earnings are limited, such imports
of foodgrains have created serious balance of payments crisis for the
developing countries. Their programmes of industrialisation have also suffered
a setback because foreign exchange resources which could have been used to
import capital goods to speed up the pace of industrialisation are used up for
the imports of food grains.
228
4.8.11 Importance of Human Resource Development
The earlier economists recognized that role of human resources and
explicitly included human beings, or their acquired abilities and skills, as a
component of capital.57 Human resource development plays an important role
in economic development. In fact, effective use of physical capital itself is
dependent upon human resources. This is due to the reason that if there is
underinvestment in human resources the rate at which additional physical
capital can be productively utilised will be limited since technical, professional
and administrative people are required to make effective use of material
resources. Modem economists in recent decades have pointed out that many
Third World countries have remained underdeveloped an account of
underdevelopment of human resources. For instance, the general masses in
these countries are either illiterate or their level of education is very low, most
of them are unskilled and untrained, and their general health is very poor.
Therefore, large-scale investments in human resources are needed if physical
capital available in these countries is to be exploited more fully and in a more
efficient way. It has also been observed that the development of human
resources is intricately related to the process of economic development. Both
proceed together and reinforce one another.
(i) Role of health in improving the quality of human capital
Improvement in the health of masses increases their productive capacity
and leads to qualitative improvement in human capital. Therefore, expenditures
on health are important in building and maintaining a productive labour force
as well as in improving the lives of the people and the quality of society.
Basically, expenditures on health take the form of investment in medical
knowledge, in disease prevention and in treatment and rehabilitation. Because a
large number of poor living below subsistence levels in underdeveloped
57 B.F. Kiker, “The Historical Roots of the Concepts of Human Capital”, Ronald A. Wykstra (ed.),
Human Capital Formation and Manpower Development, (New York, 1971), p. 8.
229
countries suffer from malnutrition, the health care programmes in these
countries can be taken to include all steps aimed at improving the level of
nutrition of these people.
(ii) Poor health of an average Indian
Efficiency of workers depends considerably on their health. Workers
whose health is not good ad who fall sick quite often, cannot do their job
efficiently and thus their efficiency is bound to remain low. Improvement in the
health of workers automatically raises the national output. The general health
standard in India is quite low. It is not at all surprising that most of the people
in India have poor health and fall sick quite often. This is somewhat inevitable
in a country where even now more than 30 per cent of the population is below
the poverty line. Let us now consider whether there has been any improvement
in the health of an average Indian during the planning period. Quite often
figures of life expectancy are quoted in support of the contention that there has
been a considerable improvement in the general health of the people in this
country. The poor health standard is clearly reflected in the high incidence of
morbidity in the country.
The main reasons which are quite often mentioned for the poor health of
the population in this country are lack of nutritious diet, inadequate medical
care and living under unhygienic conditions. But all these factors are not
independent of the poverty of the people. People, who do not even get two
square meals a day, cannot dream of balanced and nutritious diet. They cannot
afford even medical care since it has become very costly. Hospitals which are
located in urban areas are not within the reach of most of the rural population.
Therefore, the basic cause of poor health of mass of the population in this
country is widespread poverty.
4.8.12 Poverty and Food Security
Because income affects food consumption, poverty is one of the main
230
causes of food insecurity.58 Poverty is often defined using a poverty line which
is fixed as the level of income below which it is possible to say that a person is
poor (World Bank59). In contrast with this simplistic definition, Nobel Prize
laureate Amartya Sen defines poverty by the absence of a sufficient level of
fundamental entitlements such as the right of access to essential goods which
may be either the right on what is being produced, or a right of access to goods
and services acquired through exchange on markets – including through sale of
one’s own labour. He also recognizes extended rights - based on social
relations, gifts and counter-gifts and public goods - which can be exchanged by
an individual. The amount of goods available to an individual - ‘‘exchange
entitlement set’’- can therefore be modified either through a variation in the
entitlements of individuals or through a variation of his/her real rights to
exchange.60 Poverty is therefore above all a heavily contextualised complex
and multidimensional concept linked to the low (or unequal) capacity of choice
that individuals have. Thus income is only one of the dimensions, alongside
social, institutional and even cultural dimensions.61 The concept is related to a
multidimensional view of development which has been the basis for the Human
Development Report which has been produced annually by the United Nations
Development Programme (UNDP) since 1990.
Poverty is one of the main causes of food insecurity. For poor
households, once expenditures on basic necessities (energy, clothes, shelter and
others) have been deducted, there are not sufficient resources left to meet other
family needs, including food. Poverty itself is both a cause and a consequence
of undernourishment resulting from chronic food insecurity.62 Numerous
studies have demonstrated that chronic undernourishment is a factor in the
58 Food Security – Definitions and Drivers available at http://www.hungerexplained.org/
Hungerexplained/Food_security_files/Food%20security%20-20definitions%20and%20drivers_1.pdf 59 www.worldbank.org/poverty/ 60 V. Reboud (Ouvrage collectif), Amartya Sen : un économiste du développement ?, AFD 2008. 61 A. Sen, Poverty and Famines: an Essay on Entitlement and Deprivation, Clarendon Press/Oxford
University 8 Press, 1981. 62 S. Broca, Food Insecurity, Poverty and Agriculture: A Concept Paper, ESA Working Paper No. 02-
15, FAO, 9 2002. http://www.fao.org/righttofood/kc/downloads/vl/docs/Broca%20twin_track%20 approach.pdf
231
perpetuation of poverty. An undernourished person attains a lower level of
physical and intellectual development, and his/her capacity to work is
constrained, especially by lack of available energy. He/she is also more likely
to be sick and therefore not to be able to work at all. Undernourishment is also
a vector for the inter-generational inheritance of poverty, as women weakened
by an inadequate diet during their pregnancy, give birth to small and fragile
infants who will have some kind of physical or even intellectual handicap from
the moment of their birth. Similarly, an undernourished child will not do well
at school, both as a result of reduced concentration - because of hunger - and
also in many cases because of insufficient intellectual development. Finally,
poverty is often the enemy of risk: a poor person will hesitate to embark on
risky economic activities which often offer the highest potential profits.
In almost all underdeveloped countries where per capita income is very
low, income inequality has resulted in a number of evils, of which poverty is
certainly the most serious one.
As pointed out by Tendulkar Committee, the concept of poverty is
associated with socially perceived deprivation with respect to basic human
needs. “These basic human needs are usually listed in the material dimension
as the need to be adequately nourished, the need to be decently clothed, the
need to be reasonably sheltered, the need to escape avoidable diseases, the need
to be (at least) minimally educated and the need to be mobile for purposes of
social interaction and participation in economic activity.”63
The strategy of poverty alleviation adopted by the Government of India
suffers from the following limitations:
The programmes have done little for disabled, sick and socially
handicapped individuals who cannot participate in normal economic activities.
The strategy for poverty alleviation has also failed to do justice to women in
intra-family distributions.
63 Government of India, Planning Commission, Report of the Expert Group to Review the
Methodology for Estimation of Poverty (Tendulkar Committee), submitted in November 2009, p. 2.
232
Income and employment-oriented poverty alleviation programmes put
additional income in the hands of the poor which they can use for buying food.
But these programmes do not ensure that the poor can really manage to get
adequate food all the year round for the family with the increased income,
because this depends on the price, supply ease and tome distribution of income.
The poverty line crossing criterion for evaluating the success of the
poverty alleviation programmes is insensitive to the income changes occurring
below poverty line. For overcoming this problem, A.K. Sen has suggested
attaching of weights to various income slabs below poverty line.64
The government has failed to make necessary changes in anti-poor laws
and policies. These laws and policies harm particularly the tribals who depend
on non- timber forest products for their subsistence and cash income.65
S.C. Jain thus argues, “If the broader concept of poverty alleviation is
accepted, the choice of progress indicators has to embrace a wider spectrum
than reporting the number of families crossing the poverty line, investment
expenditure, and mandays of employment generated along with physical
quantities of assets created. The levels of the protection of couples in service
group families against unwanted births, school retention rates, infantile
mortality, longevity and productivity trends, levels of employment and wage
payments, extent of income and savings, leakages in wasteful consumption,
etc., could form indicators to assess gaps in the levels of development of the
service groups as compared to the average levels in the district.”66
4.8.13 Climate Change
Food security is severely influenced by climate change. The changing
climate will influence the food grain production in different ways. For
example, the temporal and spatial variations in precipitation including rainfall
64 A.K. Sen, “The Welfare Basis of Rural Comparison”, Journal of Economic Literature, Vol. 17,
March 1979. 65 S. Mahendra Dev and Ajit Ranade, “Poverty and Public Policy: A Mixed Record” in Kirit S. Parikh
(ed.), India Development Report 1997 (Delhi, 1997), p. 73. 66 S.C. Jain, “Poverty Alleviation Programmes in India: Some Issues of Macro Policy”, Indian Journal
of Agricultural Economics, July-September, pp. 393-94.
233
may result in deficit moisture stress, i.e. drought or excess moisture stress
condition, i.e. flooding. Similarly, extreme high or low temperatures result in
variations in the length of crop growing season. These factors would also affect
the crop productivity and farm net income and hence climate resilient
agricultural practices have to be promoted. This is applicable to all the nations,
including India. Understanding the impact of climate change on Indian
agriculture is quite complex as several factors are involved in this phenomenon.
For example, the negative effect of global warming on crop productivity in
India may be compensated by carbon fertilization to some extent. Several
researchers conducted studies on the interrelationship between climate change
and food security in relation to impacts of climate change on crop productivity,
food production and socio-economic aspects. It is already established that some
factors of climate such as increased carbon dioxide level would play a positive
role in enhancing crop productivity. However, the crop productivity would be
negatively influenced by changes caused by extreme variation in temperature
and nutrient interactions and higher rate of natural disasters such as floods and
droughts.67,68,69 The fourth assessment report (AR4) of The International Panel
on Climate Change predicted an increase in global temperature by 2–6°C by
the year 2100 which is alarming.70 The expected crop yield due to climate
change can also be predicted over a period of time through modelling. Jones
and Thornton71 conducted study on the simulations of maize production in
Africa and Latin America based on the climate data derived from the HadCM2
model and an overall yield reduction of 10% was predicted by 2055.
The changing climate affects food security at the global level as it brings
67 G. Frenck, L.V.D. Linden, T.N. Mikkelsen, H. Brix, and R.B. Jorgensen, Increased (CO2) does not
compensate for negative effects on yield caused by higher temperature and (O3) in Brassica napus L. Eur. J. Agron., 2011, 35, pp. 127–134.
68 N.K. Fageria and A. Moreira, Chapter four – The role of mineral nutrition on root growth of crop plants. Adv. Agron., 2011, 110, pp. 252–331.
69 V. Chhotray and R. Few, Post-disaster recovery and ongoing vulnerability: Ten years after the super-cyclone of 1999 in Orissa, India. Global Environ. Change, 2012, 22, pp. 695–702.
70 IPCC, Climate Change, The fourth IPCC assessment report. Cambridge University Press, Cambridge, The United Kingdom, 2007.
71 P.G. Jones and P.K. Thornton, The potential impacts of climate change in tropical agriculture: the case of maize in Africa and Latin America in 2055. Global Environ. Change, 2003, 13, pp. 51–59.
234
remarkable changes in land utilization pattern and water resource
availability.72,73,74 At the same time, increased human interference may fasten
the changes. It was reported that ever increasing human population coupled
with their changing dietary preferences significantly increased global demand
for food and thereby generating tremendous pressure on native vegetation and
ecosystems.75 India also faces a similar grim situation in tackling the issues
related to food security and policies related to globalization further affected the
environmental health stressing the need for regulation of the same.
Though climate change related agricultural research has been focused on
assessing the response of various growth parameters of crops due to specific
changes in climate, accurate analysis of food security indicators could not be
achieved which reflects the vulnerability of food systems to global climate
change. This is due to the fact that the individual assessments in general study
climate variability without any integrated approach as they mainly focus on
bio-physical aspects of production only. As a result, the food accessibility and
food consumption elements of food security get little attention. There is an
urgent need to address the food security concerns that are central to economic
and sustainable development issues in both India and the other nations which is
possible by integrating bio-physical and socio-economic aspects of food
systems.
Climate change in the recent years has resulted in higher frequency of
floods and droughts, making the objective of attaining food security very
complex. Hence, the future research efforts related to management aspects of
tackling vulnerability caused by natural hazards must consider the social,
economic and geo-political constraints. Enhancing the resilience of human
72 P. Nema, S. Nema and P. Roy, An Overview of Global Climate Changing in Current Scenario and
Mitigation Action. Renewable Sustain. Energy Rev., 2012, 16, pp. 2329–2336. 73 L. Sylla, D. Xiong, H.Y. Zhang and S.T. Bagoura, A GIS Technology and Method to Assess
Environmental Problems from Land use/cover changes: Conakry, Coyah and Dubreka Region Case Study. Egyptian J. Remote Sensing Space Sci., 2012, 15, pp. 31–38.
74 T.R. Green et al., Beneath the Surface of Global Change: Impacts of Climate Change on Groundwater. J. Hydrol., 2011, 405, pp. 532–560.
75 D. Tilman et al., Forecasting Agriculturally Driven Global Environmental Change. Science, 2001, 292, pp. 281–284.
235
systems to cope with extreme climatic stresses should become the main
objective. There is a strong need to address changes in institutions and resource
accessibility to tackle the climate induced natural hazards.76 Overall, the
agricultural practices have to be reoriented which would provide better climate
resilience and enhanced net farm income. The capacity of people to cope with
climate change and its related edaphic changes varies from one region to
another in India.77
4.8.14 Hunger
The United Nations Secretary General Ban-ki-moon describes the
problem of hunger saying “nothing is more degrading than hunger especially
when man made”.78 Our food grain production is now well over 220 million
tonnes. We are facing double digit inflation in case of food items. There is an
extremely high prevalence of hunger and malnutrition. At some places the
poorest families are eating on alternative days. As we celebrate the 64th year of
our independence, the rampant malnutrition, anemic mothers and stunted
children indicate our failure to feed the empty stomachs. The international food
policy research institute, Washington has placed India in the 66th position out
of 88 countries for global hunger index. India ranks below all other South
Asian nations, except Bangladesh; Kenya, Nigeria, Cameroon and Sudan fared
better than India. India has more states under ‘alarming to extremely alarming’
categories with Madhya Pradesh being the worst affected. No state in India is
in the ‘low to moderate hunger index’ category.
4.8.15 Food Wastage
A recent headline that captured the attention of all was that food grains
76 N. Adger, Social Vulnerability to Climate Change and Extremes in Coastal Vietnam. World Dev.,
1999, 2, pp. 249–269. 77 P.K. Aggarwal, P.K. Joshi, J.S.I. Ingram and R.K. Gupta, Adapting Food Systems of the Indo-
Gangetic Plains to Global Environmental Change: Key Information Needs to Improve Policy Formulation. Environ. Sci. Policy, 2004, 7, pp. 487–498.
78 Ban-ki-moon, (2008), “Addressed at High Level Conference on World Food Security”, Rome (Italy), 03 June, 2008 available at http://www.un.org/apps/news/infocus/sgspeeches/searchfull.asp?statID=255.
236
worth 580 billion got spoiled due to lack of storage facilities with the Food
Corporation of India. It is no less than a sin to waste such huge quantities of
food grains when millions in the country remain unfed and their daily ration of
calories of many others is much below the minimum necessary for their
survival. It necessitates looking for alternatives to Public Distribution System.
The use of food stamps can be such alternative. Under this scheme the intended
beneficiaries are provided with food stamps which recipients can exchange for
an equivalent amount of food at any shop. The shopkeepers can get them
credited in their Bank accounts. The biggest advantage of Food stamps is that it
can plug the leakages associated with the PDS.
4.8.16 Dry Land Agriculture and Agro Infrastructure
Dry land is home to more than 450 million farming people. It
contributes 42% of total food grains especially coarse grains, 75% of pulses
and oilseeds and 40% of wheat. Climate change would expand dry land by
11%. Dry lands are characterized by low level of fertility, low productivity,
frequent crop failure, uneven and untimely rainfall, extensive holdings,
prolonged dry spell and low moisture retention capacity.79
We still are lacking in the desired infrastructure for providing irrigation
to the cultivable areas, technology for soil and moisture conservation,
infrastructure for storing perishable products, road connectivity for bringing
perishable products in the market at the earliest, chain of cold stores at the
village level, small scale industries for value addition and water harvesting
structures for conserving water.80
4.8.17 Challenge of Contamination
Still, food security, which seeks to end starvation, does not abolish food
adulteration. Virtually all items of food in India have chemicals or
79 An Article on “Food Security: The Challenges Ahead”, by Parveen Kumar, Yojana Magazine, Vol.
54, October 2010, p. 29. 80 Ibid.
237
adulterants added to them, which make them unsafe to various degrees.
Therefore, every public institution where food is served must ensure that
what is served is chemically safe, nutritionally healthy and makes for the
health of the nation.
This means an organised system of inspecting the quality of food offered
in public places. We should be under no illusion that even godowns
where grain is kept for easy distribution have enough safety features
incorporated in them.
The business of making food appear appealing and attractive often
spoils the quality of what we eat. To make the nation healthy, every
citizen must be able to buy food that is free from contamination. This
will involve a comprehensive process involving testing facilities or
laboratories even in the villages. We must have a food safety project that
makes what we eat wholesome. Food security cannot be guaranteed
merely by the provision of a certain quantity of grain to each family but
by ensuring that every grain that is distributed is wholesome and
nourishing, and not noxious. The ideology of food safety is a composite
one, beyond merely making grain available physically.
We must have a state-sponsored food safety foundation that has
branches all across each State, with equipment that can test food safety.
An empowered force of trained food safety personnel should visit
eateries, food stores, even festival venues where food is served, and take
action where adulteration or contamination is detected through scientific
means. The food safety police must have suitable powers conferred on
them under legislative sanction. There should be an Act that provides
statutory instrumentality to thus ensure the health of the people. A safety
police force operating under the Health Ministry with powers of seizure
is a new concept that will require an amendment to the Food Safety Act.
Policing the process is a fundamental obligation of the state.
238
The destiny of India is as yet uncertain. Jawaharlal Nehru said in a
celebrated speech: “The service of India means the service of the
millions who suffer. It means the ending of poverty and ignorance and
disease and inequality of opportunity. The ambition of the greatest man
of our generation has been to wipe every tear from every eye. That may
be beyond us but as long as there are tears and suffering, so long our
work will not be over.”
The Food Safety Bill has a serious shortcoming, and this must be
corrected by means of suitable amendments and policy reformation. The
prices of vegetables and other necessary commodities for food
consumption keep rising and it is still not clear what the government is
doing to control the trend.
To end starvation, the prices of all food commodities must be regulated.
Real food safety is the have-not humanity’s instrument of contentment.
4.8.17 Farmers Issue
Dang Kim Son, Director General of the Institute of policy and strategy
for agricultural and rural development has rightly said that food security in a
country starts with the farmer who provides the food. Today we talk of making
tall claims about record foodgrain production and providing then to the people
at an affordable cost but there is another side of coin too. A report of national
crime records bureau came out with the shocking revelation. The number of
suicides increased in the year 2009 and it was also stated in the report that the
suicides are not region specific but are spread across India.81 The prevailing
situation in the contemporary farming community needs serious attention in
order to produce 61.2 million tonnes of food grain. Food and non- food prices
have increased significantly in recent years and it's becoming unaffordable for
the poor families to cope with the rising price. The expenditure on cultivation
has increased extensively but the agricultural income has not increased in
81 Dr. Parveen Kumar, Food Security v. Farmer Security, Kurukshetra – A Journal on Rural
Development, Nov. 2013, p. 10.
239
proportion with its input. In recent years, real wages in agriculture has
increased much faster than the real growth in gross value added in agriculture.
This has put serious distress among the farmers. Another equally
significant factor is the energy. Energy plays an important role in determining
the output of production. The increase in the price of the energy has affected
the food prices in two ways. Firstly, the rise in the price of petroleum product
motivates the government and the corporate sector to go for producing bio-fuel.
The policy for production of bio diesel from Jatropha plant and ethanol from
molasses has already been initiated. This will seriously reduced the land area
under cultivation for the production of food grain.
Secondly, the raising price in the inputs likes fertilizers, pesticides and
cost of mechanical cultivation has made agricultural production very
expensive. In recent years, with the increase of income and changes in the
dietary pattern, the middle class families have been spending more on
horticulture and livestock product as it provides more nutrients. And on the
other hand the poor farmers whose income remains more or less stagnant see
this as means to earn more income. Marginal farmers change to more income
oriented occupation to support their household. Considering this, there is a
possibility that the production of horticulture or livestock production may
increase tremendously but the whole purpose of food security will be useless as
this product are costly and poor people will not be able to afford it. This current
development will have serious effect on the sustainability of food security. Not
only it will reduce the area under cultivation but it will also increase the
demand for feed grain and subsequently increasing the cereal prices, affecting
the poor household.
Another critical issue which need to be focused for food security is the
diversion of cultivated land towards wood farming. High GDP growth is
leading to the increase consumption of wood and wood products like furniture,
timber, pulp and paper. The cultivation of poplar tree in some states of northern
India has turned out to be more remunerative than crop cultivation. And many
farmers are leaning towards as it is more profitable.
240
4.8.18 Safe Storage of Food Grains and Inadequate Storage Facilities
Generally it is seen that the birds feast on wheat spilling out of damaged
sacks at an open storage facility of the Food Corporation of India on the
outskirts of Karnal in Haryana.
The revelation exposes how government is struggling on two counts –
safe storage of foodgrains and inadequate storage facilities for food items.
Their year’s yield of tomatoes on the roads. Having spent nearly 8 rupees
($0.15) for producing one kg of tomato and failing to get even 1 rupee ($0.02)
in the market, most farmers resort to selling their produce at a loss. Ironically,
while farmers are incurring huge losses, end consumers are shelling out 12-15
rupees for a kg of tomatoes.
4.8.19 Lack of Money to Purchase Food and Storage Facilities
In spite of surplus food-grains stock, it is also a reality that a vast
number of people do not have enough money to feed themselves twice a day.
1. Inadequate and improper storage facilities for grains, which are often
stored outside under tarps that provide little protection from humidity
and pests.
2. Insufficient cold storage and cold chain transportation system is a major
cause for fruits, vegetables and other perishable products to rot.
3. Poor roads and inefficient transport systems can cause massive delays.
This in turn causes decay of temperature sensitive produce.
4. Limited reach of Mandis, which are currently the point of aggregation
for agricultural produce. This poses problems for small farmers who
don’t have proper transport facilities at their disposal and have to travel
and average of 12 km to the closest Mandi.
5. Multiple layers of middlemen between the farmer and the end consumer,
driving up prices and reducing bargaining power and price transparency
for the farmers. These intermediaries have led to a cost inflation of
250% (over the cost of production).
241
6. Lack of a well-developed agricultural banking sector, which forces
formers to take loans with high interest from commission agents.
7. Lack of education and training on new techniques, technologies and
agricultural products.
8. There has been a gradual shift from cultivation of food crops to
cultivation of fruits, vegetables, oil seeds, and crops which act also as
industrial raw materials. This had led to the reduction in net sown area
under cereals, millets and pulses.
9. The use of more and more land for construction of factories, ware-
houses and shelters has reduced the land under cultivation and now
fertile land for farming, is no longer available.
10. The productivity of land has started showing a declining trend.
Fertilizers, pesticides and insecticides, which once showed dramatic
results, are now being held responsible for reducing fertility of the soil
4.9 INDIAN AGRICULTURE AND FOOD SECURITY
Agriculture plays an important role in the process of economic
development of developing countries like India. Besides providing food to
nation, agriculture releases labour, provides savings, contributes to market of
industrial goods and earns foreign exchange. Agricultural development is an
integral part of overall economic development.82 At the time of independence,
agriculture was the main source of national income and occupation in India.
Agriculture and allied activities contributed nearly 50 per cent to India’s
national income. Around 72 per cent of total working population was engaged
in agriculture. These confirm that Indian economy was a backward and
agriculture based economy at the time of Independence. After 61 years of
Independence, the share of agriculture in total national income declined from
50 per cent in 1950 to 18 per cent in 2007- 08. But even today more than 60 per
cent of workforce is engaged in agriculture. In spite of this, it is also an
82 Shyam Kartik Mishra, Babita Agrawal, “Food Security in India: Policies and Challenges, New
Century Publications, ed. 2013, p. 46.
242
important feature of agriculture that growth of other sectors and overall
economy depends on the performance of agriculture to a considerable extent.
Because of these reasons agriculture continues to be the dominant sector in
Indian Economy.83
Agriculture is the backbone of Indian Economy. About 65per cent of
Indian population depends directly on agriculture and it accounts for around 18
per cent of GDP. Agriculture derives its importance from the fact that it has
vital supply and demand links with the manufacturing sector. During the past
few years agriculture sector has witnessed spectacular advances in the
production and productivity of food grains, oilseeds, commercial crops, fruits,
vegetables, food grains, poultry and dairy. We are talking about the second
GREEN REVOLUTION; India has emerged as the second largest producer of
fruits and vegetables in the world in addition to being the largest overseas
exporter of cashews and spices. Further, India is the highest producer of milk in
the world.84
4.9.1 Climate and Agriculture
India has Monsoon climate in which a year has been divided into two
distinct seasons of summer and winter. Rainfall occurs mainly in summer.
Solar radiation, temperature, and precipitation are the main drive of crop
growth; therefore agriculture has always been highly dependent on climate
patterns and variations. Since the industrial revolution, humans have been
changing the global climate by emitting high amounts of greenhouse gases into
the atmosphere, resulting in higher global temperatures, affecting hydrological
regimes and increasing climatic variability. Climate change is projected to have
significant impacts on agricultural conditions, food supply, and food security.
Overall, climate change could result in a variety of impacts on
agriculture. Some of these effects are biophysical, some are ecological, and
83 An Article on “Indian Agriculture and Food Security: Problem and Prospects” by Dr. Shaukat
Haseen, Md. Rehan Khan available at https://mpra.ub.uni-muenchen.de/33748/MPRA paper No. 33748, 2011.
84 Ibid.
243
some are economic, including:
A shift in climate and agricultural zones towards the poles
Changes in production patterns due to higher temperatures
A boost in agricultural productivity due to increased carbon
dioxide in the atmosphere
Changing precipitation patterns
Increased vulnerability of the landless and the poor
However, agriculture is itself responsible for an estimated one third of
climate change. It is generally agreed that about 25 per cent of carbon dioxide
emissions, are produced by agricultural sources, mainly deforestation, the use
of fossil fuel-based fertilizers, and the burning of biomass. Most of the methane
in the atmosphere comes from domestic ruminants, forest fires, wetland rice
cultivation and waste products, while conventional tillage and fertilizer use
account for 70 per cent of the nitrous oxides. According to the
Intergovernmental Panel on Climate Change, the three main causes of the
increase in greenhouse gases observed over the past 250 years have been fossil
fuels, land use, and agriculture.
Over the past centuries, human ingenuity has led to technological
advances in agriculture that have allowed substantial increase in crop yields, in
part stimulated to meet population growth. Intensive agricultural methods are
reported to have detrimental effects on the environment.
The agricultural sector has become one of the main driving forces in gas
emissions and land use effects. For example, agriculture contributes to
greenhouse gas increases through land use in different ways:
CO2 emissions linked to deforestation in temperate regions:
where forests and woodlands are cleared to make room for fields
and pastures.
Methane emissions from rice cultivation and enteric fermentation
in cattle
Nitrous oxide emissions from fertilizer applications
244
Together, these agricultural processes comprise 54 per cent of methane
emissions, roughly 80 per cent of nitrous oxide emissions, and virtually all
carbon dioxide emissions tied to land use. Deforestation for land cleaning
purposes also affects regional carbon reuptake, which can result in increased
concentrations of CO2, the dominant greenhouse gas.85
4.9.2 Major Crops
Rice, Wheat, Sugarcane, Oilseeds, Pulses, Cotton, Jowar, Bajra, Ragi,
Tea, Coffee, Coconut, Cashew, Rubber, Spices, Cauliflower, Onion, Cabbage,
Mango, Banana, Sapota, Acid lime are the major crops. India is among the
world’s leading producers of paddy rice, wheat, buffalo milk, cow milk and
sugar cane. It is either the world leader or the second largest producer in eight
out of its top ten products. Some of these are widely traded while others are
more specialist products.
There was positive growth in area, production and yield in 2003-04 but
it is clear from the graph that in subsequent year, 2004-05, there has been
negative growth. Again in 2009-10, area, production and yield have registered
negative growth. Concluding from the graph we can say that there has been a
continuous fluctuation in the area, production and yield of foodgrains in
India.86
4.9.3 Plantation
Tea, Coffee, and Natural rubber are the main plantation crops in India
that contribute in Indian export to a considerable extent. India is the largest
producer and consumer of tea in the world. It contributes 4 per cent to global
coffee production and enjoys a niche market by producing both Arabica and
Robusta coffee. In rubber also, it ranks third in production and fourth in
consumption of natural rubber in the world.87
85 Shaukat Haseen and Md. Rehan Khan, Indian Agriculture and Food Security: Problem and Prospects
available at https://mpra.ub.uni-muenchen.de/33748/MPRA paper No. 33748, Sept. 2011. 86 Ibid. 87 Ibid.
245
4.9.4 Horticulture
India has a great potential in the production of horticultural crops, which
includes fruits, vegetables, spices, floriculture, and plantations. Acreage under
horticulture is around 20 million hectares. India is the second largest producer
of both fruits and vegetables in the world. It occupies first position in the
production of cauliflower, second in onion, and third in cabbage.88
4.9.5 Allied sectors
(i) Dairy
India ranks first in the world in milk production, which was around 100
million tonnes in 2006-07.Strong networks of Milk Cooperatives, have been
instrumental in this phenomenal performance of dairy sector in India.
Presently, 1.13 lakh village level cooperative societies spread over 265 districts
in the country form part of the national Milk Grid. This Grid links milk
producers throughout India and consumers in 700 towns and cities. De-
licensing of dairy sector in 1991 has directed considerable amount of private
funds both from inside and outside country in this sector especially in
manufacturing facilities while investment in cooperative sector are
concentrated largely in procurement and processing of milk.89
(ii) Livestock
Livestock sector contributes about 27 per cent of the G.D.P. from
agriculture and allied activities. This sector has excellent forward and
backward linkages, which promote many industries and increase the incomes
of vulnerable groups of the society such as agricultural labourers and small and
marginal farmers. India possesses the second largest livestock population in the
world. Production and export of poultry products have shown considerable
growth in the recent decades. Export of such products to countries including
Bangladesh, Sri Lanka, Middle East, Japan, Denmark, USA, and Angola augers
88 Ibid. 89 Ibid.
246
well for this industry.90
(iii) Fishery
Fishing, aquaculture and a host of allied activities are a source of
livelihood to over 14 million people and a major source of foreign exchange
earner. This sector contributed alot in growth of G.D.P. and agricultural sector
thus gives geographical basis for the development of marine fishery sector and
cultural factor boosts the inland fishery sector in India.91
4.9.6 Agricultural Finance
(i) Credit
Availability of adequate credit is vital for every sector and agriculture is
not an exception. In India, Commercial Banks, Cooperative Banks, and
Regional Rural Banks (RRBs) are responsible for smooth flow of credit to
agricultural sector. Besides there is a huge unorganized market that exists for
credit to agricultural sector in India, which provide timely fund to this sector
but at the exorbitant rate of interest. Among organized credit disbursement to
agriculture commercial banks play a vital role with a share of about 70 per cent
where as cooperative sector and RRBs contribute 20 per cent and 10 per cent
respectively. Kisan Credit Card (KCC) scheme was introduced to provide
adequate and timely support from the banking system to the farmers for their
cultivation needs. This scheme has made rapid progress and more than 645
lakh cards issued up to October 2006.
The ‘Farm Credit Package’ announced by the Government of India in
June 2004 stipulated doubling the flow of institutional credit for agriculture in
ensuing three years. Annual targets for this package are being surpassed in the
two consecutive years from its introduction and it is likely to surpass in the
third year also.92
90 Ibid. 91 Ibid. 92 Ibid.
247
4.9.7 Agricultural Insurance
Insurance is a prime necessity to mitigate uncertainty that persists in
agriculture. In India, agriculture is still affected by such factors, which are
beyond the control of human being. So, there is a great need for agricultural
insurance in India. Keeping this in mind, Government of India in coordination
with the General Insurance Corporation of India (GIC) had introduced National
Agricultural Insurance Scheme (NAIS) from rabi 1999-2000 season. The main
objective of this scheme is to protect the farmers against losses suffered by
them due to crop failure on account of natural calamities. Agricultural
Insurance Company of India (AICIL) which was incorporated in December
2002 took over the implementation of NAIS. AICIL introduced Rainfall
Insurance Scheme called ‘Varsha Bima’ during 2004 southwest monsoon
period. Varsha Bima provided for five different options suiting varied
requirements of farming community:
1. Seasonal rainfall insurance based on aggregate rainfall from June to
September.
2. Sowing failure insurance based on rainfall between June 15 and August 15.
3. Rainfall distribution insurance with the weight assigned to different
weeks June and September.
4. Agronomic index constructed on the basis of water requirements of
crops.
5. A catastrophe option covering extremely adverse deviation of 50 per
cent and above in rainfall during the season.93
4.9.8 Rural Infrastructure Development Fund (RIDF)
RIDF was announced by the Government of India in 1995-96 to boost
public sector investment in agriculture and rural infrastructure. The Fund is
raised from the commercial banks to the extent of their short fall in agricultural
lending as priority sector. The activities, which have been made eligible for
loans from RIDF, include rural roads and bridges, irrigation, mini and small
93 Supra note 85.
248
hydel projects, community irrigation wells, soil conservation, watershed
development and reclamation of waterlogged areas, flood protection, drainage,
forest development, market yard, godowns, apna mandi, rural haats and other
marketing infrastructure, cold storages, seed/agriculture/horticulture farms,
plantation and horticulture, grading and certifying mechanisms such as testing
and certifying laboratories, fishing harbors/jetties, revering fisheries, animal
husbandry, modern abattoir, drinking water supply, infrastructure for rural
educational institutions, public health institutions, construction of toilet blocks
in existing schools and ‘pay and use’ toilets in rural areas, village knowledge
centers, desalination plants in coastal areas, infrastructure for information
technology in rural areas, and construction of anganwari centers.94
4.9.9 Micro Finance
Micro finance scheme has been introduced by National Bank for
Agriculture and Rural Development (NABARD), the apex bank for agriculture
and rural development in India, to improve the access of the rural poor to
formal institutional credit and other financial products. In all 547 banks, which
include 47 commercial banks, 158 RRBs, 342 cooperative banks are now
actively involved in the operation of Self Help Group (SHG)- Bank Linkage
Programme to spread the facility of micro finance to the needy small and
marginal farmers and tiny entrepreneurs. The programme has enabled nearly
329 lakh poor families in the country to gain access to micro finance facilities
from the formal banking system.95
4.9.10 Market for Agricultural Products
Agricultural markets in India are dominated by the existence of
unorganized and unregulated agricultural mandies with the presence of a large
number of middlemen and widespread prevalence of malpractices. Absence of
proper warehousing facilities in the villages, lack of proper transportation
94 Supra note 85. 95 Ibid.
249
facilities and infrastructure such as rails and good quality all weather roads and
ignorance about the market prices of the products are some of the important
factors for exploitation of farmers from middle men. They are forced to sell
their products to middlemen at the farm gate at throwaway prices.96
4.9.11 Agricultural Market Reforms in India
Ministry of Agriculture had formulated a model law on agricultural
marketing in consultation with State/Union territory governments to bring
about marketing reforms in line with emerging trends. This model act enables
establishment of private markets/yards, direct purchase centers,
consumers/farmers markets for direct sale, and promotion of public-private
partnership (PPP) in the management and development of agricultural markets
in the country. It also provides for exclusive markets for onion, fruits,
vegetables, and flowers. Regulation and promotion of contract farming
arrangement has also been made a part of this legislation. A provision has also
been made for constitution of State Agricultural Produce Standard Bureau for
promotion of grading, standardization, and quality certification of agricultural
produce. So far, 15 States and 5 Union Territories have amended their
Agricultural Produce Marketing Committee (APMC) Act to derive the benefits
of market reforms.97
4.9.12 E-Chaupal
E-Chaupal is a business platform consisting of a set of organizational
subsystems and interfaces connecting farmers to global markets. It has been
initiated by International Tobacco Company (ITC) who are quite active in
agricultural sector in India. This e-chaupal business platform consists of three
layers each of different level of geographic aggregation. Each of the three
layers is characterized by three key elements-
1. the infrastructure (physical or organizational) through which transaction
takes place
96 Ibid. 97 Ibid.
250
2. the entity (person or organization) orchestrating the transactions , and
3. the geographical coverage of the layer.
The first layer consists of the village level kiosks with internet access (e-
chaupals), managed by an ITC trained local farmer and within walking distance
(1-5 kilometers) of each target farmer. Each cluster of five villages gets an e-
chaupal, which is justified by sparse population in rural India. The second layer
consists of a brick and mortar infrastructure called hubs managed by the
traditional intermediary who has local knowledge/skills called a Samayojak
and within tractorable distance (25-30 kilometer) of then target farmer.98
4.9.13 Agricultural Production and Procurement
It has been pointed out that the NFSA would necessitate an increase in
procurement of grains, and this cannot be achieved without additional
investments in agriculture.99 In the NFSA, the total requirement of grain under
all centrally funded food and nutrition schemes is likely to increase per year
during the first 3 years in terms of production.100 It may be pointed out that this
was achieved with little increase in procurement infrastructure. However, in the
coming years, requirements are bound to increase exponentially with
population growth, and hence strategies to improve procurement will become
necessary. Such efforts are likely to provide room for development of
procurement infrastructure in states outside those where procurement is
currently concentrated, i.e., Punjab, Haryana, Andhra Pradesh, and parts of
Uttar Pradesh and Madhya Pradesh, thereby benefiting more farmers in other
states.
With or without the NFSA, Indian agriculture is already in a crisis.
Growth has decelerated over the last two decades under various pressures, such
as urbanization, industrialization, uncertain market prospects, and
98 Supra note 85. 99 A., Gulati, J. Gujral, T. Nandakumar, National Food Security Bill—Challenges and Options. New
Delhi: Commission for Agricultural Costs and Prices, Government of India, 2012. 100 Government of India, Ministry of Consumer Affairs, Food and Public Distribution. Monthly Food
Grains Bulletin, August 2013. New Delhi: Department of Food and Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution, Government of India, 2013.
251
environmental and climate change.101 The ability to produce enough food
grains and other foodstuffs to support the growing population in the near future
has been speculated upon, although no clear indications of failure or resilient
growth are available. However, even without taking into consideration the
requirements of the NFSA, it is time that India attempted to revitalize
agriculture through an evergreen revolution, as has been suggested102, rather
than perpetuating an unhealthy trend of sustaining farmers’ interests solely
through subsidies and increasing support prices for grains. Such efforts should
also focus on crops other than paddy and wheat, such as millets, pulses,
vegetables, fruits, and oil seeds, to meet the demands imposed by increasing
dietary diversification.
Procurement of grains for the TPDS has also come within the radar of
the World Trade Organization (WTO) Agreement on Agriculture. Procurement
of grains from farmers by government agencies at minimum support prices for
public stockholding is included in the “green box” (non-trade-distorting
subsidies) under the Agreement on Agriculture; however, unlike other green
box subsidies, the clause that the difference between the procurement price and
an outdated “external reference price” (averaged international price for 1986–
88) should be accounted for in the Aggregate Measure of Support indirectly
limits such subsidy and provides room for litigation against countries such as
India, where most of the green box subsidies are of this type.103 In comparison,
over the years, developed nations have managed to transfer most of their trade
distorting subsidies (production-linked payments and price supports, etc.) into
decoupled payments, crop insurance, and environmental protection subsidies,
which need not be included in the Aggregate Measure of Support. India, on
behalf of a group of 33 developing nations (G-33), submitted a proposal that,
among other causes, sought to remove the regressive clause on public
101 R. Chand, S.S. Raju and L.M. Pandey, Growth Crisis in Agriculture. Severity and Options at
National and State Levels. Econ Polit Wkly 2007; 42, pp. 2528–33. 102 M.S. Swaminathan and R.V. Bhavani, Food Production and Availability—Essential Prerequisites
for Sustainable Food Security. Indian J Med Res 2013; 138, pp. 383–91. 103 World Trade Organization. Uruguay Round Agreement. Agreement on Agriculture. Geneva: World
Trade Organization. Available at: http://tinyurl.com/q2wjbk6.
252
stockholding and update the external reference price.104 Heavy opposition from
the United States and the European Union almost derailed this proposal and
would have jeopardized the NFSA.105 However, the firm stand that the
Government of India adopted in this issue finally resulted in the WTO
ministerial conference held in Bali in December 2013, which decided to permit
public stockholding for food security purposes in the interim, without the risk
of challenge by other WTO members, until a permanent solution is
negotiated.106
4.9.14 Storage and Transport Infrastructure
Development of storage infrastructure has not kept pace with increases
in procurement; consequently, the storage gap for central pool food grains
increased from about 6 MMT in 2008 to 33 MMT in 2012. This leads to
delayed pickup of food grains from the procurement centers and storage in
open spaces, which in turn leads to degradation and wastage of grains. Further,
injudicious planning of movement and distribution, coupled with inadequate
transport infrastructure, can lead to suboptimal capacity utilization of available
storage space, as low as 57%.107 Thus, it is essential to improve storage
capacity as well as institute modern stock management protocols if the
increased stocks procured under the NFSA are to be utilized efficiently.108
4.9.15 Room for State Government Innovations
Several contentious issues are yet to be resolved between the
Government of India and the state governments; these include, among others,
104 C. Bellmann, J. Hepburn, E. Krivonos, J. Morrison, G-33 Proposal: Early Agreement on Elements
of the Draft Doha Accord to Address Food Security. Geneva: International Centre for Trade and Sustainable Development, 2013 available at: http://tinyurl.com/qapek5g.
105 South Centre. The WTO’s Bali Ministerial and Food Security for Developing Countries: Need for Equity and Justice in the Rules on Agricultural Subsidies. Geneva: South Centre, 2013 available at: http://tinyurl.com/ok5rxgo.
106 World Trade Organization. Draft ministerial decision on public stockholding for food security purposes. Geneva: World Trade Organization available at: http://tinyurl.com/nekterl.
107 Indian Audit and Accounts Department. Report of the Comptroller and Auditor General of India on storage management and movement of food grains. Food Corporation of India. Report No. 7 of 2013. New Delhi: Ministry of Consumer Affairs, Food and Public Distribution, Government of India, 2013.
108 Ibid.
253
cost-sharing mechanisms for the proposed cash incentive scheme for pregnant
and lactating mothers; transportation and retailer margins, as well as the
proposed food security allowance; issue prices for the additional quantity of
grains allotted to some states in excess of original allocations; and innovations
such as food coupons and cash transfers.
It has also been pointed out that the rigorous legal framework of the
NFSA may inadvertently scuttle state-level innovations in the TPDS. Under the
PDS (Control) Order, 2001, which has guided the TPDS all along, the
Government of India and the states have had considerable leeway in
implementation.109 By restricting the scale of entitlements to levels lower than
those prescribed by the Government of India, several states were able to
expand coverage to additional families, decrease issue prices, and also add
other commodities, such as pulses, to the PDS to meet local demands. The
NFSA, on the contrary, resorts to strict prescriptions. Although such an
approach may be quite necessary for underperforming states, it could increase
the burden on the state governments to continue with or introduce schemes to
improve demand and supply.
4.9.16 Alternatives to TPDS
It has been suggested that in emerging economies, a higher fiscal deficit
incurred through social sector spending can be offset by the returns on such
investments; however, if outcomes do not match investments, such expenditure
would burden the economy.110 Thus, doubts expressed about the wisdom of
more investments in the TPDS, known for its unacceptable levels of corruption,
are not without merit. However, with institutional mechanisms to address
corruption and the promise of a rights-based approach in improving consumer
demand and awareness, it is likely that the prevailing trend of improved
efficiency in TPDS can be sustained and accelerated by the NFSA.
Further, although it is imperative to explore alternative strategies to
109 Government of India, Ministry of Law and Justice. PDS (Control) Order, 2001. New Delhi:
Ministry of Law and Justice, Government of India, 2001. 110 S. Roy, India’s rising fiscal deficit: Should we worry? Wall Street Journal India, 5 October, 2009
available at: http:// tinyurl.com/ngpf6zd.
254
address household food security that are more efficient, the available options
are not entirely clear. The Direct Benefits Transfer (DBT) scheme that has been
rolled out recently in a project mode is looked upon in certain quarters as a
possible way forward and an alternative to the TPDS.111 The DBT works by
linking the unique government-issued identification numbers (Aadhaar) of
beneficiaries with bank accounts to which government subsidy can be
transferred directly, thereby avoiding the leaky government channels for fund
flows. Currently, food and fertilizer subsidies are outside the ambit of DBT.
The direct cash transfer option can be more effective than the TPDS in
ensuring income transfers to the poor without being diluted by huge operational
costs, but the effects of unconditional cash transfers on household expenditure
patterns and food security have not been studied. Further, the substitution of
TPDS with cash transfers would necessitate alternative models to ensure
national food security and a major change in food and agricultural policies, and
is unlikely in the near future. Therefore, the best option would be to allow both
schemes to coexist and utilize the opportunities offered by Aadhaar to
streamline TPDS, to improve targeting and decrease leakage.112
4.9.17 International Trade & Indian Agriculture
Reforms introduced in India in the early 1990s have greatly increased
overall trade flows. However, it has consistently run a trade deficit unlike
China and Brazil (US$35 billion in 2004-2005). The EU (27) ranks as India’s
largest trading partner accounting for about 21 per cent of total Indian trade in
2005, ahead of the United States and China. Meanwhile India is the EU’s tenth
largest trading partner accounting for 1.8 per cent of total trade. In 2005 its
trade deficit with the EU was about €2 billion. India is one of the leading
members of the G-20 within the DDA negotiations. It has a preferential trade
agreement with Mercosur since 2005. It is also part of the South Asia Free
Trade Agreement (SAFTA) covering seven nations (India, Bhutan, Nepal, Sri
111 A. Gulati, J. Gujral, T., Nandakumar, National Food Security Bill—Challenges and Options. New
Delhi: Commission for Agricultural Costs and Prices, Government of India, 2012. 112 B. Patnaik, India’s DBT and PDS: Can they Work Together? Brasilia, DF: International Policy
Centre for Inclusive Growth, United Nations Development Programme, 2013.
255
Lanka, Pakistan, Bangladesh and the Maldives) which came into effect in
January 2006 with the aim of reducing tariffs for regional trade. And it is
currently negotiating Free Trade Agreements with the EU and ASEAN.
Turning our focus on trade in agricultural and food products, these accounts for
a relatively small share of overall Indian trade. Agricultural exports represent 9
per cent of the value of total exports while the share of agriculture in total
imports is just 5 per cent. When compared with other main players on world
markets and considering the size of the country, Indian agricultural trade flows
appear relatively modest. As the key goal of agricultural policy since
independence has been to achieve self-sufficiency, trade has been relatively
limited. However, technological developments and macroeconomic policy
reforms have brought increased liberalization, following the implementation of
the Uruguay Round Agreement, and have contributed to changes in agricultural
trade. Indian agricultural exports totalled $9.3 billion in the year 2005 while
imports were worth roughly $5.5 billion.
Agriculture occupies a prominent position in Indian policy-making not
only because of its contribution to GDP but also because of the large
proportion of the population that is dependent on the sector for its livelihood.
The growth in population and wealth has stimulated demand to the extent that
domestic production has not always been able to keep up and there is
increasing speculation that the Indian economy may be overheating leading to
inflation. The downside of the increased import demand and the current
commodity boom is that India’s food import bill will rise sharply.
However, it is clear that India’s agricultural sector has made huge strides
in developing its potential. The green revolution massively increased the
production of vital food grains and introduced technological innovations into
agriculture. This progress is manifested in India’s net trade position. Where
once India had to depend on imports to feed its people, since 1990 it is a net
exporter of agri-food products. Its agriculture is large and diverse and its sheer
size means that even slight changes in its trade have significant effects on
world agricultural markets. How India will develop is still a big unknown, with
the picture changing rapidly. Questions have arisen about India’s capacity to
256
compete in global markets under the current farm structure and farm policy. As
the service economy grows, the share of agriculture will diminish, which may
also have implications for India’s stance on trade and agriculture policy in the
future. The leading forecasting institutions expect that India will play a bigger
role in world markets in future. In a number of markets it is expected to
consolidate its position among the world’s leading importers (vegetable oils)
and exporters (rice). Given the size of Indian agriculture, changes in its balance
sheets for key commodities have a potentially large impact on world markets.
4.10 WTO AND INDIAN AGRICULTURE: CHALLENGES AND
PRIORITIES IN THE GLOBAL ECONOMY
4.10.1 Agreement on Agriculture (AoA)
As we shall discuss in detail in the chapter on ‘India and the World
Economy’, the Uruguay Round of negotiations led to the birth of the World
Trade Organisation (WTO) in January 1995. Under the Uruguay Round, all
member nations of GATT participating in negotiations committed themselves
to a widespread reduction in tariffs, removal of quantitative restrictions and
opening up their economies to international competition in most fields of
economic activity. Thus, the new international economic order that is taking
shape under the aegis of WTO is likely to pull down drastically the levels of
domestic protection in all areas of economic activity. As far as agriculture is
concerned, the Agreement on Agriculture (AoA) provides framework for the
long-term reform of agricultural trade and domestic policies over the years to
come, with the objective of introducing increased market orientation in
agricultural trade. AoA deals specifically with: (1) providing market access, (2)
regulating domestic support, and (3) containing export subsidies.
4.10.2 Providing Market Access
As far as providing market access is concerned, AoA required that the
prevailing non-tariff barriers in agriculture, which were considered trade
distorting, were to be abolished and converted into tariffs so as to provide the
257
same level of protection and subsequently the tariffs were to be progressively
reduced by a simple average of 36 per cent by the developed countries over 6
years (year ending 2000) and by 24 per cent by the developing countries over
10 years (year ending 2004). The minimum market access opportunities were
to be provided at 3 per cent of the domestic consumption in 1986-88 (to be
established by the year 1995) and rising up to 5 per cent by the end of the
implementation period.113
4.10.3 Reducing Domestic Support
As far as the question of reducing domestic support is concerned, AoA
divides domestic support into two categories - (1) trade distorting, and (2) non-
trade distorting (or minimal trade distorting). All trade distorting domestic
support is placed in, what is called, ‘Amber Box’. As far as non-trade distorting
or minimal trade distorting domestic support measures are concerned, they
have been divided into: (1) Green Box, (2) Blue Box and (3) Special and
Differential (S&D) Box. The Green Box measures include assistance given
through environmental assistance programmes, services such as research
training and extension, marketing information, certain types of rural
infrastructure, etc. The support under Green Box is excluded from any
reduction commitments and is not subject to any upper limit. Subsidies under
Blue Box include direct payments given to farmers in the form of deficiency
payment (i.e., the difference in the government’s minimum support price and
market price is paid directly to the farmers, as is the practice in USA), direct
payments to farmers under production limiting programmes, as in European
Union, etc. Support under Blue Box is also exempted from any reduction
commitments but it has an upper limit. The Special and Differential (or S&D)
Box measures include measures taken by developing countries, otherwise
subject to reductions, such as investment subsidies and various agricultural
input subsidies generally available to low income and resource poor producers
in a developing country.114
113 V.K. Puri and S.K. Misra, “Indian Economy”, ed. 2014, Himalya Publishing House, pp. 246-253. 114 Id. 247.
258
All trade-distorting domestic support has been put in the Amber Box.
This has to be quantified in accordance with the Aggregate Measure of Support
(AMS) and removed. The AMS consists of two parts -product specific and
non-product specific. The product specific support is the difference between
domestic support prices (as procurement prices in India) and external reference
prices, multiplied by the quantity of production which gets such support. The
non-product specific support is the subsidy on various agricultural inputs like
fertilisers, electricity, irrigation and credit. AoA stipulated the reduction of total
AMS by 20 per cent for the developed countries over a period of 6 years, while
the developing countries were required to reduce the total AMS by 13 per cent
over a period of 10 years. Reduction commitments refer to total levels of
domestic support and not to individual commodities. Policies which amount to
domestic support, both under product specific and non-product specific
categories at less than 5 per cent of the value of production for developed
countries and less than 10 per cent for developing countries are excluded from
any reduction commitments (these are known as ‘deminimis’ subsidies).
Policies which have no, or at the most minimal, trade distorting effects on
production, are also excluded from any reduction commitments.115
4.10.4 Containing Export Subsidies
As far as export subsidies are concerned, as is clear from the developed
countries were required to reduce the volume of subsidised exports by 21 per
cent over 6 years and the budgetary outlays for export subsidies by 36 per cent
with respect to the base period 1986-90. Developing countries were required to
reduce the volume by 10 per cent and budgetary outlays by 24 per cent over 10
years.116
4.11 PROSPECTS OF FOOD SECURITY IN INDIA
India achieved self-sufficiency in food grains in the 1970s thanks to the
Green Revolution. Yet, with a growing population, rising incomes and
115 Ibid. 116 Ibid.
259
substantial unsatisfied demand among the poor, it is clear that the country
cannot do without continued high growth in agricultural production.
The implications of rapidly increasing demand both for human
consumption and animal feed in the medium to long run need a rigorous
assessment. Grain production has become a matter of concern not only in India
but also at the global level. The question is, would India be able to increase
food production in the coming years with nearly stagnant net cropped area?
This implies that additional food demand has to be met through productivity
enhancements. With a billion-plus population, developments on India’s food
supply-demand equation have important implications for global food security.
This is particularly relevant after the adoption of the Agreement on Agriculture
(AOA) through which a single global market for agriculture is evolving.117
Indian agriculture has made great strides in providing food security for
its people. Only Gujarat, Haryana, Punjab, Andhra Pradesh, Odisha, and West
Bengal observed significant positive growth rate in production in the post-
liberalisation period (1995-96 to 2009-10), while Kerala observed significant
negative growth rate during the same time. In comparison, in the pre-
liberalisation period (1980-81 to 1994-95), all the major states observed
significant and positive growth rates in the production of food grains. Even
among the states that observed positive and significant growth rates in the post-
liberalisation period, only in Gujarat, Andhra Pradesh, and Odisha was the
growth rate higher in the post-liberalisation period as compared to the pre-
liberalisation period. In all other states, the trend of growth rate was lower in
the post-liberalisation as compared to the pre-liberalisation period.
Decline in the production growth rate could be an outcome either of
decline in area or decline in the yield growth rate, or of both. The area trends of
food grains present a very dismal picture, not only for the post-liberalisation
but for the pre-liberalisation period as well. During the entire period of 1980-81
to 2009-10, the area under food grains observed a significant but negative trend
in the growth rate at -0.2 per cent per annum. Thus, a shift in cropping pattern
117 Parmod Kumar, “Future Prospects for Food Security in India”, available at http://www.fnbnews.com/
Top-News/future-prospects-for-food-security-in-india-38325.
260
is taking place from food grains to non-food grains since the beginning of the
1980s or even before that. This change is visible in almost all the states as there
is hardly any state that has observed any significant positive growth rate in area
under food grains during both the pre- as well as post-liberalisation periods.
Therefore, decline in production in the post-liberalisation in comparison to the
pre-liberalisation period was not caused by the decline in area, but the sole
reason was decline in the yield rate of food grain production. This is evident
from the trend growth of yield.118
During the pre-liberalisation period, food grain yield increased at 3 per
cent per annum. In comparison, in the post-liberalisation period, the yield
growth rate was only 1 per cent. Almost all the major states observed
significant and positive growth rate in yield in the pre-liberalisation period,
while in the post-liberalisation period; only Uttar Pradesh, Gujarat, Punjab,
Haryana, Odisha, Andhra Pradesh, West Bengal, and Kerala observed a
significantly positive growth rate. Even in these states, positive growth rate in
yield was lower in the post-liberalisation period compared to pre-liberalisation
period except for the state of Gujarat. The slowdown in the progress of
irrigation among almost all crops since the mid-1990s provides eloquent
explanation for the fall in productivity of most food grains and oilseeds crops
during the post-liberalisation period. However, some reversal in the falling
trends in the irrigated area are visible following increase in the public sector
investment in the agricultural sector in the post-mid-2000s. The U-turn in
public investment in agriculture in recent years has set a positive incentive for
private investment. The consumption of fertilisers witnessed impressive growth
over the past few years after witnessing slow and uneven growth in the late
1990s and early 2000s. It is interesting to note that the agriculturally less-
advanced states like Bihar, Madhya Pradesh, Gujarat and Andhra Pradesh
witnessed huge increases in per hectare fertiliser consumption in the last
decade.
The increasing trends in outstanding loans from institutional sources
118 Ibid.
261
was also observed. Institutional loans increased by 13 per cent in the pre-
liberalisation period that increased to 15 per cent during post-liberalisation. As
with the increasing trends in fertiliser consumption and spread of institutional
loans, the share of tractor, power tillers and use of electricity in agriculture for
lifting water and other purposes has also increased after the 1990s. These are
encouraging signs for Indian agriculture and are expected to set a positive
tempo for agricultural productivity. With rising incomes and changing tastes,
diversification in the consumption basket is happening all over the country. A
clear trend away from cereals and pulses and towards high value crops like
animal products (milk and meat), fruits and vegetables and edible oils was
observed from the National Sample Survey data on consumption.119
The decline in consumption of cereals was observed not only during the
post-liberalisation period (1996-2009) but was prevalent in the pre-
liberalisation period (1987-1995) too in both rural and urban areas. At the all-
India level, negative trends in consumption were observed for rice, wheat and
coarse cereals during both pre- and post-liberalisation periods for rural as well
as urban areas. In most cases, these negative trends were significant.
In the case of pulses, negative trends in consumption were observed for
rural and urban areas during pre-liberalisation. However, consumption trends
for pulses reversed during the post-liberalisation period even though the trends
were insignificant. Edible oil consumption trends were positive but
insignificant during the pre-liberalisation period, both in rural and urban areas.
These trends became significant and their volumes also increased during the
post-liberalisation period for rural and urban areas. The broader trends were the
same in different regions in spite of regional differences in consumption
patterns.
For demand projections, the baseline assumes a national income growth
rate of 6 per cent per annum for the forecast period, i.e., 2010 through 2020.
The high growth scenario imposes a much more ambitious growth rate of 12
per cent per annum while medium growth assumes a reachable target as of now
119 Ibid.
262
up to 9 per cent growth per annum. In the baseline scenario, food grains
demand for human consumption is expected to increase marginally from 161
million tonne in 2009-10 to 172 million tonne by the end of 12th FYP and 179
million tonne by 2020-21. This increase in demand of food grains would be on
account of increase in demand for rice and wheat while demand for other
inferior cereals following the past trend would continue to decline on account
of rising incomes. Demand for pulses would go up from about 9.8 million
tonne in 2009-10 to 11.4 million tonne by 2016-17, and touch 12.5 million
tonne during the projection period up to 2020-21. If the future income grows at
12 per cent per annum, aggregate demand for food grains for human
consumption would come down (on account of diversification of consumption
basket with higher income) to 160 million tonne by the end of the 12th Five-
Year Plan. If the economy continues to grow at the same rate, the food grains
demand would almost stagnate at that level. This decline in demand with high
growth would not only be in coarse cereals but also in superior cereals like
wheat and rice.120
Demand for pulses would however increase in the high growth rate
scenario by up to 13 million tonne by the end of 12th Plan and further to 16
million tonne by the end of 2020-21. However, if income growth remains in at
the medium rate of 9 per cent per annum, there could be a positive effect on
demand for cereals both on account of lower income (less diversification of
consumption basket) and rising population. In the this scenario, food grains
demand could go up to 166 million tonne by the end of 12th plan and would
further increase to 169 million tonne by the end of 2020-21. It is interesting to
note that in all the three scenarios, growth rate in demand of cereals including
the demand of individual cereals, e.g., rice, wheat or coarse grains both in
2009-2016 and 2009-2020, would be less than that of population growth rate.
The growth in demand for pulses for human consumption, meanwhile, would
far exceed that of the population growth rate in all the three scenarios and may
therefore have an adverse effect on future food security. Edible oils demand for
120 Ibid.
263
human consumption is expected to increase from 9.8 million tonne in the base
year (2009-10) to 14 million tonne by 2020-21 with the baseline growth rate of
6 per cent. If the economy in future grows at 12 per cent per annum, edible oil
demand would skyrocket to 22 million tonne by the end of 2020-21. However,
in the medium growth scenario, the demand for edible oils would increase at an
insipid rate of up to 17.3 million tonne by the end of 2020-21. The growth rate
in demand of edible oils would be less than 3 per cent per annum in the
baseline scenario, 8 per cent in the high growth scenario and 5 per cent per
annum in the medium growth scenario.121
Thus, demand for edible oils is expected to increase at a much faster rate
as compared to demand for food grains for human consumption in all the three
scenarios. The estimates for SFW (seed, feed and wastage) were worked out
using the trend analysis of gap between aggregate food supply and demand
after adjusting for net imports and changes in the government stocks. The
overall food grains use as SFW would increase from 34 million tonne in the
early 1990s to 76 million tonne by 2016-17 and 85 million tonne by the end of
2020-21. The ratio of SFW to total food grains’ production would increase
from 19 per cent in the early 1990s to 22 to 29 per cent by the end of 2020.
The aggregate demand for food grains is projected to increase from 239
million tonne from the baseline (2010-11) to 249 million tonne by the end of
the 12th Plan and 264 million tonne by the end of 2020-21 if the economy
grows at 6 per cent per annum. However, if the economy spurs on at 12 per
cent, the demand for food grains by 2020 would be much less – 247 million
tonne – because of the rapid diversification of the consumption basket from
food grains to high value food items in the event of a higher per capita income.
If, meanwhile, economic growth comes to the medium level of 9 per cent per
annum, aggregate demand for food grains would cross 237 million tonne by
2016-17 and exceed 255 million tonne by the end of 2020-21.
In the case of superior cereals, the aggregate demand for wheat would
come closer to that of rice because of increased demand of wheat as feed for
121 Supra note 95 at 284.
264
animal use. The aggregate demand for these two cereals is expected to be
between 90 and 100 million tonne each by the end of 2020-21, depending on
different growth scenarios. The aggregate demand for coarse cereals could
increase from 40 million tonne in the baseline to 42 million tonne in 2020-21 in
the high growth scenario and 46 million tonne in the low growth scenario.
Similarly, aggregate demand for pulses is expected to grow from 18 million
tonne in the baseline scenario and rise to between 24 and 27 million tonne,
depending on various growth scenarios. Lastly, edible oil demand would
increase at a much faster rate than that of food grains; from 10 million tonne in
the baseline scenario to between 14 and 22 million tonne by 2020-21.
In the optimistic scenario of post-liberalisation (1995-96 to 2009-10)
trends, food grains production could touch 271 million tonne by the end of the
12th Plan and 307 million tonne by the end of 2020-21. The area under food
grains is expected to either remain stagnant at 125 million hectare in the
optimistic scenario or decline slightly in the alternate scenario. Exports were
mostly volatile as their quantum observed a huge increase with the opening up
of the Indian economy in the mid-1990s. If the opening up process continues at
a faster rate in the medium run, food grains exports would increase rapidly.
But, inward looking policies may slow down exports
Looking at the commodity composition, the rise in food grains
production would mainly come from rice and wheat production growth. Rice
production would increase from about 106 million tonne at present to above
130 million tonne by the end of 2020-21, while wheat production would
increase from 96 million tonne at present to 106 million tonne by the end of
2020-21. The production of coarse cereals and pulses would remain constant at
the present level of 43 and 19 million tonne, respectively or may observe
slender increase. Meanwhile, oilseeds production is expected to increase from
32 million tonne at present to around 50 million tonne by the end of 2020-21.
Regarding the area under different crops, wheat and rice are expected either to
maintain their present level or undergo minor expansion. Pulses, meanwhile,
would have minor area contraction. The area under coarse cereals would
certainly contract while oilseeds would see expansion in their area regardless of
265
growth situations. Rice would have a major share in the growth story of food
grains exports which is pegged to rapid economic expansion. In addition to
rice, some contribution would also be made by coarse grains. Looking at the
balance sheet, whether India will have manageable food grains demand in the
medium-term by the end of 12th Five Year Plan and in the long-term by the
end of 2020-21 will depend critically on what happens on the international
trade scenario especially that of India’s exports of rice and coarse grains.
In the closed economy scenario by the end of 12th Plan as well as by
2020-21, the picture looks affirmative form both the optimistic (high demand
and supply situation) as well as pessimistic (low demand and supply) scenario
as in both the cases available supply exceeds that of demand. However, when
we include likely exports of food grains in aggregate demand during this
period, the balance sheet becomes slightly narrow in both the low and high
demand supply scenarios. However even in the face of open economy,
aggregate supply will still exceed that of demand and overall balances would
remain in surplus in low and high demand supply scenarios. In the latter
scenario of high demand supply in the face of open trade, demand would come
closer to supply and the food security will be challenged although overall it still
remains surplus by around 10 million tonne.
In the lower demand and supply scenario with open trade, supply will
exceed demand and there would be huge net surplus of around 40 million tonne
in 2020-21. In the high demand and supply scenario, however, the surplus will
be reduced to around only 10 million tonne in 2020-21. The crops among food
grains that will have adverse balances would be pulses, which will continue in
shortage in all scenarios (of low as well as high demand and supply) because of
its short supply compared to increasing demand for human consumption. Like
in the case of pulses, balances of oilseeds are also already adverse as part of the
demand at present is being met by imports. The demand-supply balances will
further turn adverse and in the given circumstances we are expected to continue
import a huge amount of oilseeds/edible oils.
Overall, it may be concluded that food security in India can be achieved
by paying higher attention to issues such as climate change, integrated water
266
management, agricultural pricing, inadequate storage capacity, unsuccessful
delivery of public services, mismanagement of food products and crop
insurance. Despite considerable effort being made to improve production, not
much focus has been given to curb food supply chain losses. With over 1.2
billion people to feed, addressing the issue of food wastage is essential to
India’s efforts towards combating hunger and improving food security. Limit
global warming, including the promotion of climate - friendly agricultural
production systems and land-use policies at a scale to help mitigate climate
change. In nutshell, despite ensuring ample availability of food, existence of
food insecurity at the micro-level in the country has remained a formidable
challenge for India.
Given all the shortcomings described above, the NFSA nevertheless
holds a promise to improve food and nutrition security in the country and
decrease the burden of undernutrition and hunger significantly. In addition to
bringing more Indians under the umbrella of the TPDS, it provides an
opportunity to work toward increasing the efficiency of the TPDS. Although
the immediate focus is narrow, the NFSA provides room for further
improvements in its provisions. The realization of anticipated benefits will
certainly depend on how the schemes are implemented, and anticipated
political gains may compel hasty rollout; it is necessary to develop locally
adaptable methods for identification of beneficiaries, devise viable models for
fair price shops, develop infrastructure for procurement, transport, and storage,
and undertake reforms in the system. Close monitoring of implementation,
utilization, and short- and medium-term impacts on household economics, food
expenditures, dietary intakes, and diversity is essential. It is also important to
consider human metrics for outcomes; will the NFSA improve the nutritional
status of women and children? Thus, it is important for the discourse on NFSA
to shift track from the current narrow focus on its economic viability to
addressing issues around implementation, well before states begin rolling out
the scheme, as well as to consider ways of measuring its human impact.
Food security is a basic human right. There is more than enough food in
the world to feed everyone, but the number of people affected by hunger and
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malnutrition is still ‘unacceptably high’, with disproportionate impacts on
vulnerable and marginalized sections. The human right to adequate food has
been recognized in different international instruments. Merely institutionalizing
‘rights’, such as NFSA 2013, on statute book for vote-bank gimmicks will not
be effective and sustainable unless it is internalized through strong commitment
and effective implementation strategy. The rights provided to its citizens
determine the quality of governance. Human rights and food security are
complementary to each other. Other human rights are meaningless in the
absence of right to food, which is implied right under the right to life and
personal liberty. Food security to all citizens, particularly the marginalized and
vulnerable sections, is still a distant dream. But we should not forget that
merely institutionalizing ‘rights’ on statute book for vote-bank gimmicks will
not be effective and sustainable unless it is internalized through strong
commitment and effective implementation strategy. Thus, for an equitable,
inclusive and sustainable path to development an integrated model of
governance is the need of the hour, with meaningful participation of executive
agencies, strong political will, a far-sighted leadership, vigilant citizenry,
strong and aware civil society and a global campaign.122
122 Tejinder Pal Singh, “Human-Rights Based Approach to Food Security: Prospects and Challenges in
India”, available at http://www.ijellh.com/human-rights-based-approach-food-security-prospects-and-challenges-india.