Daily Editorial Analysis

Ridding India of food insecurity (GS Paper 3, Economy)

Context:

• India may be the fastest growing large economy of the world, but it is also facing accelerating food-price inflation. The rise in the price of food first accelerated sharply in 2019, and has climbed in most years thereafter.
• In July 2023, annual inflation exceeded 11%, the highest in a decade. An implication of continuing high food-price inflation is that a section of the population could be facing hardship in consuming food of adequate nutritional value.

FAO’s recent report:

• The ‘State of Food Security and Nutrition in the World’ of the Food and Agriculture Organization (FAO) estimates the proportion of the population across countries unable to afford a healthy.
• The figure for India in 2021 is devastating to note, an estimated 74% of the population cannot afford a healthy diet. Given a population of 1,400 million, this makes for approximately one billion Indians.
• A shrinking ability of households to finance their food requirement is evident also in studies undertaken in India itself.

How FAO’s report corroborates with a study in Mumbai?

• A study reported of the trend in the price of food in Mumbai city over 2018-2023 found that while the cost of preparing a thaali at home has risen by 65%, in this period, the average wage of a manual worker rose by 38% and that of a salaried worker by 28%.
• The implied reduction in purchasing power is considerable, and it would be reasonable to expect that food consumption has been impacted.
• This would be in line with the reported rise in the prevalence of anaemia, mostly induced by nutrient deficiency, in the latest National Family Health Survey undertaken over 2019-21. Over 50% of adult women were estimated to be anaemic.
• This suggests that the FAO’s finding, that over half of India cannot afford a healthy diet, is plausible.

Focus on supply side interventions:

• Ensuring that Indians have access to a healthy diet is the most important task of economic policy today. Macroeconomic policy, relied upon to control inflation, has proved to be useless in the context.
• The Reserve Bank of India has failed in this task, with the inflation rate mostly higher than the target for four years by now.
• Its approach of contracting output when the inflation rate rises does nothing to manage food inflation stemming from the supply side.
• It is necessary to intervene on the supply side to ensure that food is produced at a steady price by raising the yield on land.

Significance of the Green Revolution:

• India has rich experience in this area, having engineered a Green Revolution in the 1960s, but it is not being tapped.
• At the time, reeling under extreme food shortage following two successive droughts, the government orchestrated a supply-side response by providing farmers with high-yielding seeds, cheap credit, and assured prices through procurement.
• Within a few years India was no longer dependent on food imports.

Limitations of Green Revolution:

• Some mistakes were made, among them the rampant use of chemical fertilizer, fuelled by subsidy, which degraded the soil.
• There was also the reliance on procurement prices rather than productivity increase to ensure farm incomes, which fuelled inflation.
• The policy was almost exclusively focused on cereals rather than pulses, the main source of protein for most Indians. However, rather than carping about the errors made in an extraordinarily successful economic policy intervention, we should be correcting them now.

Need for second agricultural revolution:

• The first Green Revolution had a specific agenda of making India self-sufficient in food. In this it succeeded eminently, and in a remarkably short time, but without paying any attention to the cost of producing food.
• For this, a second agricultural revolution is needed now. To contain the rising price of food would require action on many fronts; a mission mode is necessary.
• As for policy, it is clear that procurement prices, cash transfers, the Public Distribution System, and priority lending required of public sector banks are not sufficient.
• Yield increasing interventions on the farm are needed to at least contain the cost of production, if not to actually lower it.
• Agricultural yield is lower in India than in East Asia, pointing to the potential for an increase.
• Attention is needed to extend irrigation to 100% of the net sown area, an end to restrictions on leasing of land, a quickening of agricultural research and the re-institution of extension.

What needs to be done?

• For some time that increased public expenditure on irrigation is not reflected in an increase in irrigated area, whether due to waste or the diversion of funds has not been established.
• The ongoing fragmentation of already small land holdings lowers the capacity for productivity-enhancing capital investment, for which leasing is a solution.
• India’s network of public agricultural research institutes needs to be energised to resume the sterling role they had played in the 1960s.
• Finally, extension has now more or less vanished from where once the gram sevak was a familiar figure in the village, playing a crucial role in the dissemination of best practices. It must be revived.
• These initiatives should be dovetailed into a programme for the manifold increase of protein production, which India is severely deficient in.

Inclusion of states:

• In the 1960s, the States that were chosen for the spread of the new technology worked closely with the central government.
• This would have to be replicated in order to make a difference to the country as a whole, with the central government taking the States along in a spirit of co-operative federalism.
• At the same time, it may be asked if the States are playing their part to enhance agricultural productivity rather than relying on food allocations to their Public Distribution System from the central pool.

Way Forward:

• A non-ideological approach would be needed, whether at the Centre or in the States, if a difference is to be made.
• A noticeable feature of the first Green Revolution was that by relying on private enterprise, the then Prime Minister, Indira Gandhi, chose a capitalist approach (with the objective of making India self-sufficient in food), unmindful of any damage that would be caused to her socialist image.
• It was the Green Revolution that made the first dent on poverty in India. So, the poor did benefit from this strategy. Similarly, now, in order to ensure that all Indians have permanent access to a healthy diet, no approach consistent with ecological security must be off the table.