IFPRI - Taking the Pulse of the Public Distribution System, Avinash Kishore, IFPRI
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Transcript of IFPRI - Taking the Pulse of the Public Distribution System, Avinash Kishore, IFPRI
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Taking the ‘Pulse’ of the Public Distribution System
Courtsey: Shruti Cyriac (2015)
Suman Chakrabarti, Avinash Kishore and Devesh Roy
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Pulse consumption is declining in India
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1983 1988 1993 1999 2004 2009 2011
Rs/
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kg/p
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BPL Households APL Households Pulse Price (Rs/kg)
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2004-05 2009-10 2011-2012
Pulse Prices (Rs/kg)
Arhar Chana Moong Masur Udad
The difference in prices between the cheapest pulse and the more expensive ones has increase significantly over the last 10 years.
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Chickpea Pigeonpea Mungbean Blackgram Lentil
Chickpea -0.92 0.07 0.02 0.02 -0.19
Pigeonpea 0.06 -0.86 0.05 0.04 -0.28
Mungbean -0.08 -0.097 -1.05 -0.03 -0.04
Blackgram -0.06 -0.08 -0.04 -1.02 0.19
Lentil 0.025 0.05 0.01 0.02 -1.10
But it doesn’t help, because you cannot make sambhar with chana daal
Elasticity of substitution between pulses is quite low
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Pulses in PDS • PDS subsidizes rice and wheat only
• Discourages dietary diversity (Desai,
2014; Jha,) • Demand to diversify the PDS basket
• Rapid rise in price of key pulses
• Low cross-elasticity of substitution • Pressure to make pulses more affordable
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Who does what in PDS?
Pulses Andhra Pradesh Himachal Pradesh Punjab Tamil Nadu
Arhar 1kg/family @
Rs.30/kg
N/A N/A 1 kg/family
@Rs.30/kg
Udad Dal N/A 1kg/family @ Rs. 34.99/kg Chana Dal, Moong whole
& Urd whole at the scale
of 0.5 kg per member to a
maximum of 2.5 kg per
family @ Rs. 20.00 per kg.
1kg/family @Rs.
30/kg
Chana Dal N/A 1kg/family/month @ Rs.
25/kg to all cardholders
N/A
Moong N/A 1kg/family with>=5
members @ Rs. 49.99/kg N/A
Did consumption of pulses increase due to inclusion in
PDS? By how much?
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Data
• NSSO Consumption Expenditure Survey (CES): thick rounds • Collects data on total quantity and expenditure on 8 pulses
• Pulses were introduced in PDS between 61st & 66th rounds in all 4 states • We use data from earlier rounds (50th & 55th) to test for parallel trends
• NSSO CES does not collect data separately on pulse sources from PDS • We see only weighted average price of PDS and market purchases
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The effect of Pulse subsidy is traceable in NSSO data
Price (Rs./kg) of Pulses that were subsidized in 2009-10 (66th round)
Pulse Andhra
Pradesh
Himachal Punajb Tamil Nadu Rest of India
Arhar 74.53 60.84 74.38
Udad 33.4 60.9 56.60 60.91
Chana dal 28.8 40.68 50.60
Moong 70 76 70.6
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(1) (2)
OLS (without controls) OLS (with HH controls)
Post treatment year 2009/10 -0.381*** -0.521***
(-5.1) (-7.7)
States that provided pulse subsidy
through PDS
0.109 0.087
(0.3) (0.3)
Difference in differences estimator 0.296* 0.214*
(2.6) (2.7)
Constant 3.596*** 2.325***
(14.3) (8.6)
R2 0.003 0.067
N 225499 225499
Impact of PDS Subsidy on Pulse Consumption
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VARIABLES Pulse (kg/hh/month)
Himachal Pradesh 0.383***
Punjab 0.133*
Andhra Pradesh 0.210***
Tamil Nadu 0.456***
Constant -0.391
Observations 225,233
R-squared 0.288
Biggest impact in Tamil Nadu and Himachal Pradesh; Smaller effects in Andhra Pradesh and Punjab
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(1) (2)
Poor HHs (kg/hh/month) Non-poor HHs (kg/hh/month)
Post treatment year 2009/10 -0.591*** -0.694***
States that provided pulse subsidy through
PDS
0.088 0.170
Difference in differences estimator for
2009/10
0.064 0.334*
Constant 1.634*** 2.594***
R2 0.054 0.061
N 78497 56072
Surprisingly, PDS subsidy on pulses does not lead to a significant increase in consumption of pulses for the poorest households
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Variables
(1) (2)
Total protein
consumed
(gm/hh/month)
Protein from pulses
(gm/hh/month)
Post treatment year 2009/10 -44.751*** -98.181***
States that provided pulse subsidy through
PDS
-44.185* 6.383
Difference in differences estimator for
2009/10 10.410 50.086*
Constant 87.894*** 74.776
R2 0.433 0.202
N 225499 225499
Though consumption of pulse protein increases, total protein consumption does not change significantly
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20 rupees in pulse subsidy leads to increase in pulse consumption by 300gm/household/month
VARIABLES
(1)
Pulse (kg/hh/month)
posttreatment -0.436***
Impact_per_rupee_subsidy_entitlement 0.0153***
Constant 3.580***
Observations 225,233
R-squared 0.288
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To sum up…
• Provision of 1 kg subsidized pulses leads to increase in household consumption of pulse by about 135-450 gms
• What happens to the other 550-870 gms?
• 3 possibilities • Only some households buy PDS pulse while our estimate is an average over all
households—compliers and non-compliers • Households reduce market purchase of pulses when it becomes available from PDS and • Some of the PDS pulse is diverted to the black market
• NSSO-CES is a repeated cross-section • We cannot check relative importance of these mechanisms in this data
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ICRISAT-VDSA
• Panel data with HH consumption module • Monthly data on household consumption of different food items—by source
• Pulse purchase data by 600 households from 4 villages in Maharashtra and 2 villages of Andhra Pradesh for years 2006 and 2008 • Including data on quantity of tur dal purchased from PDS
• None of the households in either state received subsidized pulses in 2006
• Households in AP start getting subsidy on Tur dal in 2008
• An average household in AP got 10 kg of subsidized Tur dal in 2008
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With cheaper pulse in PDS, HHs reduce market purchase and use of other pulses
(1) (2) (4) (5)
VARIABLES Tur_total(PDS+Mkt) Tur_market dalotherthantur totaldal
Impact of 10kg pulse
in PDS
6.222*** -3.841*** -2.370*** 2.904***
Constant 11.72*** 11.73*** 10.61*** 33.94***
Observations 1,266 1,266 1,266 1,266
R-squared 0.150 0.087 0.391 0.289
Number of
Households
685 685 685 685
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Lagta nahin yun daal galegi… • Infra-marginal transfers will not change
consumption patterns significantly • Works like cash transfer, not nutrition intervention
• Cost of achieving nutritional goals through prices subsidy can be high • Increasing protein intake by 1gm/day = Rs.
300/capita/year
• Not enough pulse to subsidize significant quantities • 1kg/family/month = 300 gms/family/month = 0.12 gm
protein/person/day
• Instead of subsidizing consumers; focus on increasing production & productivity
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Thank You!