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DEPARTMENT OF AGRICULTURAL ECONOMICS,UNIVERSITY OF AGRICULTURAL SCIENCES,

GKVK, BANGALORE - 560065

Seminar ReportOn

Food Security India: Myths and Realities

Submitted to:

Dr. G. S. Mahadevaiah,Shri Honnaiah,Seminar Teachers

Submitted by:

Gourav Kumar VaniPALB2103

Sr. M. Sc. (Agri.)

Dept. of Agricultural EconomicsUAS, GKVK, Bengaluru – 560065

Date: 09-11-2013 Seminar No. -1

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TABLE OF CONTENT

Serial no. Particulars Page no.

1 Introduction to Food Security2 Physical Availability of Food3 Per capita Consumption Expenditure on different

food items for 30 days duration, All India, 2011-2012

4 Engle’s Law & Trends in ConsumptionExpenditure

5 Consumption of Cereals and Pulses6 Inequality in Consumption7 Elasticities of Food Expenditure by commodity8 Stark Realities9 Performance on Global Hunger Index10 Demand & Supply projections for Foodgrains11 Government Measures for Food Security12 National Food Security Act 201313 Conclusion14 Policy Implication15 References

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1. Introduction to Food Security

According to World Food Summit, Rome, 1996, Food Security exists, when all people,at all times, have physical and economic access to sufficient, safe and nutritious food tomeet their dietary needs and food preference for an active and healthy life.

Four dimensions of Food Security

Physical Availability of Food: The supply side, determined by the level of foodproduction, stock level & net trade.

Economic & Physical access to Food: Adequate supply of food does notguarantee household level food security. Food access depends on incomes,expenditure, markets & prices in achieving food security objectives

Food Utilization: The way the body makes the most of various nutrients in thefood. Involves care & feeding practices, food preparation and diversity of diet &intra-household distribution of food.

Stability of the other 3 dimensions over time: Access on a periodic basis.Weather, political conditions or economic factors have an impact on foodsecurity status.

2. Physical Availability of Food

Physical availability of food can be understood in various ways as following.

Total Production of Food Commodities: Table No. 1 provides the production offood grains, oilseed, sugar, fruits and vegetables and milk for India. From thetable it can be observed that production of cereal and coarse cereals hasdeclined marginally from 2011-12 to 2012-13. But in case of Pulses, Oilseeds,Sugar, Fruits and Milk there is good jump in the production compared toprevious year. Overall Food grain production has declined due to ill distributionof rainfall in year 2011 and space in the country.

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Physical Availability of FoodTable No. 1 (million tonnes)

Crop 2011-12 2012-13

Rice 105.31 104.22

Wheat 94.88 93.62

Coarse cereals 42.04 39.52

Total cereals 242.23 237.3618

Pulses 17.09 18.00

Total food grains 259.32 255.36

Oilseeds 29.79 30.72

Sugar 24.60 26.00

Vegetables 156.325 156.445

Fruits 76.42 79.40

Milk 127.9 133.7

Source:-RBI Hand Book on India Economy 2011-12

Net Availability of Cereals and Pulses: Net availability is an important conceptto look at availability in the domestic market for commodities after taking intoaccount the effect of net import or export and changes in level of GovernmentStocks. The formula for calculating net availability is as following

Net availability of cereals=Net production +net imports-changes in governmentstock of cereals

It is important to consider the net availability of cereals and pulses becauseCereals and Pulses are the main source of carbohydrates and protein. Hence Cerealsand Pulses are the building blocks of Food Security. Government maintains the stock ofCereals as well as export & import the Cereals and Pulses based on the production inthe respective year.

From the table no. 2 provided below, it can be observed that over years the netavailability of Cereals had improved but for Pulses it was dwindling in India. Thehighest availability was observed in the year 2008-09 of 17.6 million tonnes. But overthe three years in 2010-11 the net availability declined to a level of 2006-07. It can alsobe observed that, Government Interventions and opening up of Economy helped theEconomy in increasing net availability of Cereals and Pulses by big margin in threedecades from 1980-81 to 2000-01.

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Net Availability of Cereals and PulsesTable No. 2 (in million tonnes)

Year Cereal Pulses

1950-51 44.3 8.0

1960-61 64.6 11.1

1970-71 84.0 10.3

1980-81 104.8 9.4

1990-91 145.7 12.9

2000-01 145.6 11.3

2005-06 157.4 12.7

2006-07 168.8 13.3

2007-08 168.9 14.7

2008-09 165.9 17.6

2009-10 173.7 15.8

2010-11 176.5 13.7

Source: Indian Economy,Gaurav Datt and Ashwani Mahajan,2013

Per Capita availability: The Production of commodities does not always tell usabout the sufficiency of commodity’s availability in question. Hence a goodmeasure can be to compare the per capita availability of commodities with theminimum requirements. Table no. 3 as given below provides us with a list ofper capita availability per day and per capita minimum requirement per day forvarious food items for India for period 2012-13.

Per capita availability, 2012-13Table No. 3 (in gram per day)

Commodity Per capita availability Minimum per capita requirement

Total cereals 528.70 400

Pulses 46.78 80

Total food grains 568.79 480

Oil 39.73 30

Sugar 54.79 20

Vegetables 348.47 300

Fruits 176.86 150

Milk 297.81 300

Source:-National Institute of Nutrition, Hyderabad

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From the above table it can be observed that we have surplus amount of cereals, Sugar,Vegetables and Fruits compared to minimum requirement. But for pulses we have 50 %deficit in per capita availability. In case of oil we have more availability than therequirement but half of the availability is met through the import of vegetable oil. Incase of milk we are on the path of achieving self sufficiency in per capita availabilityand we fall marginally short of the per capita daily requirement.

Per capita Net Availability: Per capita availability is calculated by dividing the totalproduction by total population and hence it fails to reflect the effect of changes inGovernment stocks and net imports. Therefore we need to consider Per Capita NetAvailability. Table no. 4 provides us the per capita net availability over the years.

Per capita Net Availability Per Day

Table No.4 (in grams per day?)

Year Cereal Pulses Total Food grains

1950-51 334.2 60.7 394.9

1960-61 399.7 69.0 468.7

1970-71 417.6 51.2 468.8

1980-81 417.3 37.5 454.8

1990-91 468.5 41.6 510.1

2000-01 366.2 30.0 416.2

2005-06 390.9 31.5 422.4

2006-07 412.1 32.5 444.5

2007-08 407.4 32.5 442.8

2008-09 374.6 41.8 436.0

2009-10 407.0 37.0 444.0

2010-11 407.0 31.6 438.6

Source: Indian Economy,Gaurav Datt and Ashwani Mahajan,2013

From the above table it can be observed that for year 2010-11 level of net availabilityper person was adequate for cereals but not for pulses. Over the years it can be seen thatper capita net availability of cereals and pulses has declined. In 2010-11 the net percapita availability was even worse then what it was in 2006-07 in the same decade.Even in 1990-91, when India was gripped in severe Economic Crisis, then also Indianswere better than in 2010-11. On comparing the net availability of Pulses per capita withthe pre Green Revolution period of 1960-61 with 2010-11, it is found that netavailability per capita in 2010-11 was nearly half of what was available in 1960-61.This declining trend is a serious cause of concern for policy makers.

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3. Per capita Consumption Expenditure on different fooditems for 30 days duration, All India, 2011-2012

Table no. 5 provided below gives us a summary of per capita consumption expenditurefor duration of 30 days period for 2011-12. From the table it can be observed that,consumption of food and non food items as well as proportion of non food items werehigher in urban areas than in rural areas. Of the food expenditure highest expenditure inrural areas was on Cereals & cereal substitute followed by milk & milk products,vegetables. In case of urban areas highest expenditure was on milk & milk productsfollowed by cereals & cereal substitutes and vegetables. Expenditure on protein richfood was high in urban areas than in rural areas.

Per capita Consumption Expenditure on different items for 30 days duration, All India,2011 - 2012Table No. 5

Source:-Key Indicators of Household Consumer Expenditure in India, NSSO reportfor 68th round survey.

4. Engle’s Law & Trends in Consumption Expenditure

Table no. 6 and 7 are provided below for trends in percentage composition of consumerexpenditure for rural and urban areas respectively for period 1993-94. From table no. 6it can be observed that in rural areas, percentage of consumption expenditure on allitems of food except milk had decreased over years. Total food expenditure haddecreased over years but total non food expenditure had increased over years, which isin conformity with Engle’s law of consumption expenditure.

Item group Amount (Rs.)

Rural Urban

Cereal and cereal substitutes 154 175

Pulse and their products 42 54

Milk and milk products 115 184

Edible oil 53 70

Egg, fish, meat 68 96

Vegetables 95 122

Fruits 41 90

Food total 756 1121

Non food total 673 1509

Total 1430 2630

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From table no. 7 it can be observed that in urban areas, like rural areas, percentage ofconsumption expenditure on all items had decreased, but here milk was no exceptionfor decreasing trend.

Trends in Percentage Composition of Consumer Expenditure since 1993-94 forRural IndiaTable No.6

Item group 1993-94 1999-2000 20004-05 2009-10 2011-12

Cereal 24.2 22.2 18.0 15.6 12.0

Pulse and their products 3.8 3.8 3.1 3.7 3.1

Milk and milk products 9.5 8.8 8.5 8.6 9.1

Edible oil 4.4 3.7 4.6 3.7 3.8

Egg, fish, meat 3.3 3.3 3.3 3.5 3.6

Vegetables 6.0 6.2 6.1 6.2 4.8

Fruits and nuts 1.7 1.7 1.9 1.6 1.9

Food total 63.2 59.4 55.0 53.6 48.6

Non food total 36.8 40.6 45.0 46.4 51.4

Source:-Key Indicators of Household Consumer Expenditure in India, NSSO report for68th round survey.

Since we know that Engle’s Law of consumption expenditure was operating and hencewe should look towards the growth in income and inflation to know “Is growth inincome really helping the people to purchase more or is getting offset by increase ingrowth in rate of inflation?”Following Tables No.8 gives us the growth in income and inflation for the period1993-94 to 2004-05 & 2004-05to 2011-12. For inflation in urban areas here we meanCPI for Industrial Workers and for inflation in rural areas we mean CPI for agriculturallabour and rural labourers. For pan India inflation irrespective of rural or urban area, weuse WPI based inflation. For income at rural and urban level, we have Per capitaincome while at pan India level we have Per capita income and NNPFC.From the above table it can be inferred that growth of national income in period 1993-94 to 2004-05 was 6.85% and in the next period of 2004-05 to 2011-12 it was estimatedto be 9% of trend rate of growth. But if we see the growth of inflation then for 2004-05to 2011-12 period income growth lagged behind growth of inflation and for period1993-94 reverse was true.

The estimates of growth in national income do not reveal growth of income afteradjusting for growth of population. Hence Dr. Ramesh Chand of NCAP has estimatedgrowth rate of per capita income (PCI) for rural and urban India.

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Trends in Percentage Composition of Consumer Expenditure since 1993-94 for UrbanIndia

Table No.7

Source:-Key Indicators of Household Consumer Expenditure in India, NSSO report for68th round survey.

Growth in Income & Inflation

Table No.8

Period 2004-05 to 2011-12 1993-94 to 2004-05

Category Growth rate of (%) General Food General Food

CPIAgricultural labourers 7.76 7.78 5.01

Rural labourers 7.71 7.8Industrial worker 7.15 8.05 6.01 5.31

WPI 5.72 8.55 5.37 5.32Growth rate of (%)

NNPFC 9 6.85Rural Per capita income 3.46 2.27Urban Per capita income 11.81 7.75Total Per capita income 7.57 4.97

Source: Policy Brief on demand for foodgrains during 2020, 2009, Ramesh Chand,NCAP, New Delhi

It can be observed that growth of PCI in rural India was far lower compared to theirurban counterparts. Growth in income (PCI) in rural areas was far lower compared togrowth of inflation (both General and Food) growth in rural areas for both periods.While in case of urban areas the income growth was more than growth of inflation(both General and Food) for both periods. For period 2004-05 to 2011-12 at Pan India

Item group 1993-94 1999-2000 20004-05 2009-10 2011-12

Cereal 14.0 12.4 10.1 9.1 7.3

Pulse and their products 3.0 2.8 2.1 2.7 2.1

Milk and milk products 9.8 8.7 7.9 7.8 7.8

Edible oil 4.4 3.1 3.5 2.6 2.7

Egg, fish, meat 3.4 3.1 2.7 2.7 2.8

Vegetables 5.5 5.1 4.5 4.3 3.4

Fruits and nuts 2.7 2.4 2.2 2.1 2.3

Food total 54.7 48.1 42.5 40.7 38.5

Non food total 45.3 51.9 57.5 59.3 61.5

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scenario, growth of income had surpassed growth of inflation but for period 1993-94reverse was true. Thus real income of rural people had reduced over time while forurban areas real income had increased over time. This led to disparity in economicaccess and consumption in rural and urban areas as well as it makes the poor morevulnerable from the view point of Food security.

5. Consumption of Cereals and Pulses

Table no. 9 provided below gives us the per capita consumption of cereals and pulsesfor each decile class of MPCEURP [Monthly per capita consumption for 30 daysduration]. 1st Decile class “1” is having lowest MPCE while the last one “10th” has thehighest MPCE. From the table it is clear that in rural areas consumption of cereal aswell as pulses was increasing from decile class 1st to 10th. For urban areas across thedecile class there wasn’t any pattern (either decreasing or increasing) for cerealconsumption but there was increasing pattern of consumption of pulse from 1st to 10th

decile class. In case of urban areas lowest cereal consumption was observed in the 10th

decile class which has highest MPCE while the same decile class had highest pulseconsumption.

In case of urban areas the last three decile classes had the cereal consumptionbelow All India average cereal consumption. Minimum requirement of cereal perperson per month is 12 kg. Except 9th and 10th decile classes of rural areas, no otherclass of both rural and urban areas had adequate cereal consumption. Minimumrequirement of pulse per person per month is 1.8 kg and consumption of pulse wasinadequate in all the decile classes of both rural and urban areas. Thus it is clearlyevident from the table that lower MPCE classes are severely food insecure becausethere does not exist option of supplementing this inadequate cereal and pulseconsumption with highly nutritious foods like meat and fish due to low purchasingpower but the reverse holds good for decile classes with high MPCE.

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All India Per capita Consumption (Kg) of cereals and pulses for 30 days duration foreach decile class of MPCEURP, 2009-10.

Table No.9

SOURCE:-NSSO REPORT NO. 538: LEVEL AND PATTERN OF CONSUMPTIONEXPENDITURE

Quantity of cereal consumed per person per month and % share of rice and wheatin cereal consumption for major states, 2009-10

To know the pattern of consumption of cereals across states table no. 10 is providedbelow. Now first we shall look at rural India’s scenario. It can be observed from thetable that only four states consume good amount of other cereals and these states areGujarat, Maharashtra, Rajasthan and Karnataka known for consumption of pearl millet,sorghum, pearl millet and sorghum & Ragi respectively. This condition is reflective ofneglect of millets which are more nutritive than cereals. Among the major states Kerala(8.7 Kg.), Gujarat (9.2 Kg.), Punjab (9.3Kg.) and Haryana (9.8 Kg.) had less thanrequired minimum consumption of cereals (@ 12 Kg. per person). Even though thesestates are developed but the per capita cereal consumption is low, which may be due tothe reasons of substantial non vegetarian component in diet or vegetarian diet patternwhere other food components compensate for the inadequate cereal consumption. Morethan minimum required level of consumption of cereal is observed in Orissa (13.9 Kg.),Chhattisgarh (12.1 Kg.), and Assam (12.9 Kg.) among major states. The All Indiaaverage cereal consumption in rural areas is lower than minimum requirement at 11.3Kg per month.

For urban areas also the scenario remains more or less same for millets. Thecondition of consumption of millets has become worse in urban areas as evident by

Decile classes Rural (Kg.) Urban(Kg.)

Cereals Pulses cereals pulses

1 10.2 0.41 9.43 0.469

2 10.6 0.49 9.54 0.559

3 11.1 0.53 9.47 0.590

4 11.1 0.54 9.61 0.665

5 11.5 0.54 9.69 0.724

6 11.4 0.61 9.52 0.783

7 11.7 0.62 9.45 0.850

8 11.8 0.72 9.35 0.895

9 12.1 0.77 9.23 0.934

10 12.1 0.91 8.57 1.038

All Classes 11.4 0.62 9.39 0.751

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substantial decrease in consumption of as one move from rural areas to urban areas.Even in those four states of Gujarat, Maharashtra, Rajasthan and Karnataka whereconsumption of millets was high in rural areas, in urban areas it substantially reduced.Per capita consumption in urban areas was lower than rural areas for all the states ofIndia. In case of some states like Kerala it was compensated by high calorie and highprotein foods like meat and fish but this is not the case with all the states. Henceobvious inference from the table is that in urban areas nutrition levels were below ruralareas.

Quantity of cereal consumed per person per month and % share of rice and wheat incereal consumption in 2009-10, major states

Table No.10

SOURCE:-NSSO REPORT NO. 538: LEVEL AND PATTERN OF CONSUMPTIONEXPENDITURE

Changes in Per Capita Cereal Consumption (kg.) in different MPCE fractileclasses: All-India

To know the inequality in consumption we need trend in consumption across thedifferent expenditure class which is provided by table no. 11 for rural areas. Fractileclasses here are the division of MPCE into different groups where 0-10 fractile classrefers to the lowest class of monthly consumption expenditure while 90-100 fractileclass refers to the highest class of monthly consumption expenditure. It can be observedthat over years consumption of cereals is decreasing. Consumption of cereals increasesfor all years as one move from lowest fractile class of MPCE to highest class of MPCE.This shows that income has positive relation with cereal consumption.

Table no. 12 provides us trends in consumption of cereals across the differentexpenditure class for urban areas. It can be observed from the table that as we movefrom lowest MPCE fractile class to highest fractile class, cereal consumption isdecreasing. This indicates that cereal consumption is negatively related to MPCE. Over

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years cereal consumption has decreased. Over years difference in consumption ofdifferent fractile class has reduced.

Changes in Per Capita Cereal Consumption (kg.) in rural areas in different MPCEfractile classes: All-India

Table No. 11

NSSO REPORT NO. 538: LEVEL AND PATTERN OF CONSUMPTIONEXPENDITURE

Changes in Per Capita Cereal Consumption (kg) in urban areas in different MPCEfractile classes: All-India

Table No.12

SOURCE:-NSSO REPORT NO. 538: LEVEL AND PATTERN OF CONSUMPTIONEXPENDITURE

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6. Inequality in Consumption across States of India

In table no. 13 inequality in consumption is measured through use of Lorenz ratiowhich ranges from 0 to 1, 0 for perfect equality and 1 for perfect equality. Lorenz ratiois calculated separately for rural and urban areas. In list of top five states for inequalityin consumption in rural areas Uttarakhand stands first followed by Kerala, ArunachalPradesh, Punjab and Madhya Pradesh. For urban areas Kerala has highest inequality inconsumption followed by Maharashtra, Uttar Pradesh, West Bengal and HimachalPradesh. At the bottom of inequality we find Manipur with least inequality both inurban as well as rural areas. In rural areas Manipur is followed by Nagaland,Meghalaya, Mizoram and Tripura while in urban areas Manipur is followed byMizoram, Meghalaya, Nagaland and Jammu & Kashmir for increasing order ofinequality. Thus it is evident that states located in hills have low inequality.

Inequality in Consumption across States of India

Table No. 13

SOURCE:-NSSO REPORT NO. 538: LEVEL AND PATTERN OF CONSUMPTIONEXPENDITURE

Table no. 14 provides Lorenz ratio for rural and urban areas based on MMRP. It can beobserved from the table that inequality is more in urban areas than in rural areas.

Rank Rural areas Lorenzratio MMRP

Urban areas Lorenz ratioMMRP

1 Uttarakhand 0.421 Kerala 0.388

2 Kerala 0.318 Maharashtra 0.378

3 Arunachal Pradesh 0.313 Uttar Pradesh 0.377

4 Punjab 0.284 West Bengal 0.376

5 Madhya Pradesh 0.277 Himachal Pradesh 0.373

23 Tripura 0.206 Jammu &Kashmir 0.284

24 Mizoram 0.198 Nagaland 0.244

25 Meghalaya 0.178 Meghalaya 0.239

26 Nagaland 0.172 Mizoram 0.232

27 Manipur 0.158 Manipur 0.206

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Lorenz ratios for Rural and Urban Sector of IndiaTable No.14

Sector MMRP

Rural 0.270

Urban 0.362

SOURCE:-NSSO REPORT NO. 538: LEVEL AND PATTERN OF CONSUMPTIONEXPENDITURE

7. Estimated Elasticities of Food Expenditure by Commodity

To know the effect of increase in income on consumption of different commodities, wemust know the income Elasticities of demand. For this we have Income Elasticities ofvarious commodities of staple consumption from IFPPR discussion paper provided intable no. 15. It was observed that income elasticity of demand for rice, wheat and pulsewas negative meaning these are inferior commodities. For edible oil, sugar and milk itwas positive but below 1 meaning normal goods. For Egg, fish, chicken and meat it wasfound to be more than one meaning that these are the luxury commodities. The bigquestion here is for what proportion of people these luxury and normal goods areaffordable.

Estimated Elasticities of Food Expenditure by Commodity

Table No. 15

Commodity Expenditure Elasticity

Rice -0.21

Wheat -0.13

Pulse -0.24

Edible Oil 0.90

Milk 0.55

Vegetables 0.64

Sugar 0.83

Eggs 1.31

Fish, Chicken and Meat 1.17

Source:-Demand and Supply of Cereals in India 2010-2025, IFPRI, Washington

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8. Stark RealtiesIndia is ranked 10th largest Economy of world on nominal GDP basis and 3rd largesteconomy on PPP basis. But 10th largest Economy of the world is facing a stark realitywhich is more troubling than the other problems of its economy. These are

India is home to 29% of the world’s 872.9 million undernourished people(FAO).

India accounts for 49% of the world’s underweight children (WHO). India is having 34% of the world’s stunted children (WHO). India has over 46% undernourished children (WHO). India is ranked 67 way below neighboring countries like China, Nepal &

Pakistan in 2011 Global Hunger Index by the IFPRI. According to the latest data on child under nutrition from 2005–10, India ranked

second to last on child underweight out of 129 countries below Ethiopia, Niger,Nepal and Bangladesh. Only Timor-Leste had a higher rate of underweightchildren.

21% of India’s population is undernourished, nearly 44% of below the age of 5children are underweight and 7% of them dying before they reach fifth birthday.

9. Performance on Global Hunger Index

Global Hunger Index is prepared by IFPRI, every year for all countries of the world. Itranges from 0 to 100, where 0 stands for no hunger while 100 means absolutely all arehungry. From the table no. 9 provided below it can be observed that over years India’sstatus on Global Hunger Index is Alarming. Performance wise over years score isimproving but still we rank among last 12 countries in the world.

Performance on Global Hunger Index

Table No.16

Year Rank inHunger index

Out of total no. ofcountries

Score Status

1990 - - 31.73 Alarming

2007 94 118 25.03. Alarming

2008 66 88 23.70 Alarming

2009 65 88 23.90 Alarming

2010 67 84 24.10 Alarming

2011 67 81 24.2 Alarming

2012 65 79 22.9 Alarming

Source:-Global Hunger Report, IFPRI

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10. Demand & Supply Projections for Food grains

Food Grain Requirement Projection

According to NCAP report (2009, Policy Brief on demand for Food Grains during2020), India will require 280.6 million tonnes of food grains by 2020. Demand forpulses and oil seeds would increase by 140 per cent and 243 per cent respectively. Indiawould require about 130 million tonnes of rice in 2020 while requirement of wheatwould reach 110 million tonnes in 2020

Projected Scenario of 2020

In the table no. 17 provided below, along with the demand estimates of variousagricultural commodities estimated projections of production (domestic) are compared.Here BAU (business as usual) refers to the future state of business affairs, Governmentsupport for agriculture and pace of technological change to remain same. While Bestcase scenario refers to the best possible changes in state of technology, businessenvironment and level of Government support to agriculture. All the estimation doneby presenter for various commodities are based on BAU scenario.

From the table it can be observed that in 2020 demand for Rice, wheat, coarsegrains and total cereals will be more than the production projected by the presenterwhile as per estimation of supply by planning commission, demand will be less thanproduction, in any of the two scenario assumed, leading to a surplus of food grains.

In case of Pulses the estimation by presenter for production shows there will bea marginal deficit in production compared to demand. Going by the estimates of supplyfor pulses, there shall be huge gap in any scenario. This deficit in production can causesevere protein crisis which will be more than present deficit of protein in Indian diet.As per the estimates provided by the presenter for production of oilseeds, there shall bedeficit in production compared to demand to the tune of 50%. This deficit in demandwill have to be met by import, like at present India imports 50% of its domesticvegetable oil requirement, in absence of significant Government intervention to step upthe oilseed production.

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Projected Scenario of 2020Table No. 17 (in million tonnes)

ByNCAP

Estimatedby presenter

By Planning Commission

Crop

Projecteddemandduring2020

Estimatedproductionfor 2020

Demandprojectedfor Vision

2020

Supplyprojection

for scenarioof Business

as usual(BAU)

Supply projectionfor Best case

scenario (BCS)

Rice 130 117.08 119 125 207

Wheat 110 105.64 92 108 173

Coarsegrains

10 34.92 15.6 13 14

TotalCereals

236.99 262.2 226.6 246 394

Pulses 43.61 42.8 19.5 16 23

Total foodgrain

280.6 278.62 246.1 262 417

Oilseed 85.33 40.62

Source:-1. GUPTA S.P., Report of Committee on India Vision 2020,December2002, Planning commission, GOI., New Delhi,30-34.2. Policy Brief on demand for Food Grains during 2020, 2009, NCAP, NewDelhi.

11. Government Measures for Food Security

There are many Government Interventions in Agriculture for ensuring food subsidy butmajor three among those areNational Food Security MissionRashtriya Krishi Vikas YojanaNational Food Security Act 2013

National Food Security Mission (NFSM)NFSM was launched in August, 2007 by GOI with an aim of achieving an additionalproduction of 10, 8 and 2 million tonnes of paddy, wheat and pulses respectively by

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end of 2011-12. Following table no. 18 shows the performance of Mission overdifferent benchmark periods.

Performance of NFSMTable No.18 (in million tonnes)

Benchmark years2006-07 2007-08 2008-09

Paddy 10.97 7.63 5.14

wheat 18.09 15.33 13.22

pulses 3.01 2.45 2.64

Note: Calculated by presenter based on data available from RBI hand book of IndianEconomy, 2011-12

Government of India considered 2006-07 period for evaluating the performance ofNFSM but given the fact that since programme started in August 2007 which fallsunder period 2007-08 and hence we must evaluate the performance against benchmarkperiod 2007-08. So performance against 2006-07 benchmark is very good butperformance against benchmark 2007-08, only target for increase in wheat productionwas achieved but for pulses and paddy it fell short of target. Some experts opine thatperformance be measured from the next year of start of a Government programmebecause it takes time to implement it and hence performance must be measured frombenchmark period of 2008-09. Performance from 2008-09 benchmark periods is thatNFSM failed to achieve targeted increase in production of paddy and pulses but couldover achieve in case of wheat.

Rashtriya Krishi Vikas Yojana (RKVY)RKVY Started in 2007-08 for incentivizing states to enhance public investment toachieve 4% growth rate in agriculture and allied sectors during the 11th five year plan.During 2007-11, an amount of Rs.14598 was released. From the table no.19 providedbelow, it can be observed that highest growth in agriculture and allied sectors came in2010-11 which was marked by ill distribution of rainfall. The objective of achieving4% growth rate at the end of 11th five year plan fell short of target by 0.4% points i.e.growth at the end of 11th five year plan was 3.6.

Growth of Agricultural & Allied Sector GDP Table No. 19

2007-08 2008-09 2009-10 2010-11 2011-12

Growth in GDP forAgriculture andallied Sectors (%),base year 2004-05

5.8 0.1 0.8 7.9 3.6

Source:-Economic Survey, 2013

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12. National Food Security Act 2013

National Food Security Act 2013 is the latest attempt made by the Government of Indiato ensure Food Security of citizens. According to the Act 50% of urban and 75% ofrural population be covered under the proposed plan. The Act guarantees providing 5kg food grain per person per month at a subsidised rate to 67% of the country'spopulation. This amounts to 82 crore people in both urban and rural areas. Food grainswould include rice, wheat and millet at Rs.3, Rs.2 and Rs.1 per kg, respectively. Theannual food grain requirement for implementing the National Food Security Bill isestimated at 61 million tonnes. Out of this proposed 61 million tonnes of food grains,our 82.4 crore of targeted people require only 49.44 million tonnes and rest shall be forother institutional arrangements.In year 2011-12 FCI procured 66.35 million tonnes of Food grains and off take was

56.28 million tonnes. The stock at the end of the period was 53.44 million tonnes.Hence the requirement of 61 million tonnes can be met easily without impacting thefunctioning of Food grain markets

The Act stipulates that the entitled quantity of food grains should be supplied mainlythrough Public Distribution System. Pubic Distribution System is a costly affair for theGovernment to follow. This can be shown with the help of following table No. 20.From the table it can be observed that PDS has the highest cost of transferring onerupee of benefit to the targeted beneficiary (Rs, 5.37). PDS is followed in terms of costby Jawahar Rozgar Yojana (Rs. 4.35), Maharashtra EGS (Rs. 3.10) and least costlyICDS (Rs.1.8). Only exceptional scheme is Andhra Pradesh Rice Scheme with Rs. 6.35as the cost. Thus by following present structure of PDS we shall incur more costwithout revamping PDS.

Cost of Transferring One RupeeTable No. 20 (in Rs.)

Scheme Cost of income transfer

Public Distribution System 5.37

Andhra Pradesh Rice Scheme 6.35

Jawahar Rozgar Yojana 4.35

Maharashtra EGS 3.10

ICDS 1.80

Source: Indian Economy, Gaurav Datt and Ashwani Mahajan, 2013

Food security bill also put before us the question of Food Subsidy, which is importantconsideration before policy makers. Following table no. 21 provides us the details ofpast, present and estimated food subsidy cost to exchequer. From the table it can be

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observed that during 2004-05 there had been substantial increase in food subsidy. Lateron growth of food subsidy came down and again there was sudden spurt in foodsubsidy in 2009-10 as well as in 2012-13. It is estimated that during 2013-14 the foodsubsidy will increase to 124000 crore Rupees owing to new bureaucratic arrangementsthat will have to be made for systematic implementation of Act.

Cost of Food SubsidyTable No. 21 (in Rs. Crores, at current prices)

Source: Indian Economy, Gaurav Datt and Ashwani Mahajan, 2013

Since 2004-05, UPA Govt. has doled out Rs. 32 lakh-crore by way of tax exemptions tocorporate, trade and business. These exemptions are clubbed under the category‘Revenue Foregone’ in the budget documents. For 2013-14, the ‘revenue foregone’ isRs. 5.73 lakh crore. In the light of these facts it is observable point that an additionalburden of 39,000 crore rupees will definitely be a big burden on Government whichruns on a fiscal deficit of 4.8% of GDP.

Rotting Wheat in Godowns

The Food Corporation of India (FCI) has admitted in data accessed through RTI byUttar Pradesh resident, Kush Kalra that the amount of damaged wheat hasincreased from 2,010 tonnes in 2009-2010 to 2,401.61 tonnes (2011-2012). Thecountry has already suffered a loss of 932.46 tonnes damaged wheat this year tillFebruary(2013). Bihar has the highest quantity of rotting wheat at 306.5 tonnes,followed by Uttarakhand (221 tonnes) and Gujarat (195 tonnes). According to data, theworst offender in 2011-2012 was Maharashtra (1444 tonnes), while in 2010-2011Uttarakhand recorded (931 tonnes) of damaged wheat. Gujarat had the maximum (785

Year Amount

2000-01 12,010

2004-05 25,746

2005-06 23,071

2006-07 23,828

2007-08 31,259

2008-09 43,668

2009-10 58,242

2010-11 63,844

2011-12 72,823

2012-13 85,000

2013-14 (estimated ) 124000

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tonnes) damaged wheat in 2009-2010. Given these rotting of wheat in FCI Godowns itis imperative for us to check rotting because food saved is food produced. Rotting offood grains create two way problem

The food grains neither remains usable for consumption Nor it can be sold in open market at competitive prices leading to great loss to

exchequer.Arrangements Made For Additional Storage InfrastructureIn the wake of massive food grain spoilage in FCI godowns the GOI has taken variousmeasures at each step. ?? In the Central Pool as on July 30, 2013, the storage capacitystood at 74.6 million tonnes for food grains. This would be supplemented by about 20.3million tonnes with the creation of both conventional and silo capacities by privatesector participation under the Private Entrepreneur Guarantee (PEG) scheme FCI hasalready taken over facilities totalling a capacity of 7.3 million tonnes, while the rest isexpected to be ready in the next couple of years. Further, FCI will be adding capacity of0.6 million tonnes, especially in the difficult terrain of the north-eastern states, as isenvisaged in the 12th Plan. FCI also have the option of hiring capacities from privateor public sector players, based on actual demands.How Far PDS is Benefiting Poor?Given the fact that Government wants to supply entitled quantity of food grains throughPublic Distribution System it is imperative to know how much of the targeted peopleget benefit. According to recent World Bank report, PDS which accounts for 1% ofGDP benefits only 40% of targeted beneficiaries.

Deciding on the targeted beneficiaries of the Food Security Act 2013

The Planning Commission puts the number of BPL families at 6.5 crore while the stateslists add up to a shade over 10 crore households. Given this fact, there is going to be theexclusion of many genuine beneficiaries from the list. At present excluding the NorthEast states, the proportion of households with ‘no card’ was highest in Orissa -- where33 per cent of rural households did not possess any type of ration card. In the State ofOrissa which is characterized as ‘severely food insecure’ (MSSRF 2001), one-third ofrural households were outside the purview of the PDS. In another 10 States, more than20 per cent of rural households did not possess a ration card.

In this regard we have ideal system of deciding on targeted beneficiaries inKarnataka where to decide on eligible person or household Government has linkedAdhar Card with BPL and LPG card no.. This step weeds out ineligible beneficiaries.

Is this Food Security or Cereal Security?

As per the Food Security Act 2013, Section 2, sub section 7 the term “Food Security“means ‘the supply of the entitled quantity of foodgrains and meal specified underChapter II’. According to Section 2, Sub section 8 “Food Security Allowance” means‘the amount of money paid by the concerned State Government to the entitled personsunder section 13’.Thus the Act implies that we should not look for overall cover of a daily man’srequirement for food but it is an attempt by the Govt. to support the food security ofhouseholds.

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13. Conclusion India will not have problem of Cereals availability in the long run (2020-21)

and will have shortage of Pulse and Oilseed production if adequate steps are nottaken by the Government of India.

Public Distribution System is a costly method of reaching out to poor people. Food Security Bill 2013 will increase the Real Income of the targeted

beneficiaries. There exists more inequality in consumption in urban areas than in rural areas. Sustainability of Food Subsidy is subject to operation of FRBM Act. To ensure success of Food Security in India we have to achieve the Food

Production Targets and improve the efficiency of public distribution system.

14. Policy Implications Attempts should be made to increase productivity of crops. We must focus on cost effective distribution of Food grains in an equitable

manner, in addition to increasing food grain production Public distribution system must be revamped to avoid leakage and Karnataka

model should be replicated . Attempts must be made to increase Oilseed and Pulse production at an

accelerated rate to overcome the protein crisis prevailing in our country Storage of Food grains be made more scientific and prevent rotting of food

grains. Need to curb the growth of inflationary tendencies in economy in general and

more specifically Food Inflation to improve nutritional security. In addition to Cereals, Government should also provide pulses to supplement

lacking protein in Indian diet.

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ANONYMOUS, 2011, Dietary Guidelines for Indians: A manual, published byNational Institute of Nutrition, ICMR, Hyderabad: 6.

ANONYMOUS, 2011-12, Hand book of Indian Economy, published by RBI.

ANONYMOUS, 2012, Global Hunger Index: The challenge of hunger;Ensuring sustainable food security under land, water, and energystresses, published by IFPRI, Washington: 11-18.

ANONYMOUS, India’s score alarming on hunger map, Times of India: Oct12, 2012.

ANONYMOUS, 2013, Economic Survey, published by Ministry of Finance,GOI, New Delhi: 174-191.

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GULATI ASHOK, Food Security Bill could Spark grain crisis, Times of India,March 21, 2013.

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……. Consumer expenditure in percentage …. In rural India / urban India

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……. ? Rural / Urban India? Write the full title