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.

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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.

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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.

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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.

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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.

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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.

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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.