Food Maths

Context: The double imbalance in India’s cereal economy (between procurement and distribution and between production and consumption) is the reason for creating the paradox of “hunger amidst plenty.”

Hunger Amidst Plenty:

• Food insecurity: has increased due to the COVID-19, both qualitatively and quantitatively; the latest survey, Hunger Watch, suggests that food insecurity continued well after the lockdown.
• Bloated buffer stocks and stagnated distribution:
  • The cereal procurement was close to 90 million tonnes in 2019-20. - Foodgrains Bulletin
  • While the distribution under the Public Distribution System (PDS) and other welfare schemes has stagnated at around 60 million tonnes.
• Imbalance between consumption and production: While cereal production is above 250 million tonnes for five years in a row, aggregate cereal consumption is likely to be around 200 million tonnes.
  •  India Human Development Survey.

Reason for imbalance between procurement, distribution/consumption of cereals:

• Driven by independent forces: i.e. procurement by Minimum Support Prices (MSPs), distribution by the norms of the National Food Security Act (NFSA).
• Demand for higher prices by the farmers leading to high MSPs and thus exporting or using the excess stock as cattle feed is not feasible.
• Subsidised procurement on rice and wheat: incentivise farmers for overproduction.

Ways to solve the imbalance between procurement, distribution/consumption of cereals

• Enhancing distribution: Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) provided rations of 5 kg per person per month, which led to the release of an extra 30 million tonnes.
• Ensuring sustained entitlements: E.g. by expanding the Antyodaya programme and the National Food Security Act (NFSA) coverage, raising monthly cereal rations; and universalising the PDS in rural areas and urban slums.
• Give more resources and power to states: by raising state-wise NFSA allocations at a fixed percentage (say 20 %), and let the states decide how to use the additional quotas within the PDS framework. 
• Diversification of agriculture: through balanced subsidies combined with more active procurement and the inclusion of pulses in the PDS. (ensures equity and sustainability)
  • It also calls for other forms of public support (such as marketing arrangements, credit facilities, scientific advice, effective insurance), especially for small farmers and deprived regions.