National Food Security

An Alternative Approach
Jaspal Singh IAS

National Food Security

One need not research any obscure statistics or necessarily be a great economist to answer this
question in the affirmative. That National Food Security is under threat is plain apparent if only
one takes into consideration the soaring food prices and increasing food imports. The recent hike
in the Minimum Support Price (MSP) for wheat, in two installments from Rs. 600 to Rs. 1000,
marks a dark fact which has escaped any meaningful public debate. The increase will lead to
increase in food production, or so we are told, and the consequent National Food Security.
However the point that has been missed completely is the plight of the low wage earner
particularly the farm laborer already afflicted with high rates of hidden and partial unemployment.
High food production in the country or the size of food buffer held by the government agencies
provide no food security to this large population mass unless food is within reach at their income
levels at prevailing prices.

Minimum Support Price

One benefit that MSP provided in the initial years of independence was that it led to decent
surpluses with the farmer that in turn led to investment in land improvement, mechanization of
farming and high use of fertilizers. This further led to increased food production and the
consequent National Food Security. However the wisdom of the continued MSP support provided
for the two main crops namely the wheat and rice is questionable. It has led to serious problems
like depletion of water table and long term erosion of soil fertility in states like Punjab, threatening
the very sustainability of the agriculture and consequently the National Food Security. The skewed
MSP system focusing only on crops like wheat and rice has also led to effective blocking of crop
diversification which in turn has rendered the farmer dependent in perpetuity on the MSP. The
farmer has also been robbed of the probable (the choice of the word probable here instead of
possible is deliberate) benefits of market driven higher price of his produce and the country of the
market driven quality of agricultural produce. On the whole continued MSP support as shall be
seen below is not a good long term policy intervention for National Food Security.

Public Distribution System

The question to be asked here is why the country requires Public Distribution System, notorious
as a corruption den as it is. To answer this question we need to consider the target group it seeks
to serve. Below poverty line population in India mainly comprises the landless laborer, the low
paid industrial worker, marginal farmer and the unemployed or partially employed person. Their
poverty certainly can not be attributed to any unwillingness to work hard or enough on their part.
The major contributor for the phenomenon instead is extremely low wage rates in India. That the
statutory minimum wage rates in India increase at a snail’s pace shall be a gross understatement.
Compare the minimum wages of the order of Rs 2000 per month with rates of food grains @ Rs
1000 per quintal for wheat and Rs. 600 per quintal for paddy (it will be both interesting and
enlightening to work out economics of an urban house hold consisting of say two adults and three
minor children and family head employed at Rs. 2000 pm). In such a situation PDS supplies are a
life line of these BPL families and governments can withdraw PDS at their on peril unless income
levels of the large BPL population are raised sharply through state intervention.
Subsidies

Agricultural and food subsidies in the India can be broadly classified as cash subsidies and do not
necessarily result in greater investment in agriculture and therefore, though may lead to some
relief or benefit to the individual, has hardly any societal benefit. One proposition often mooted is
that the farmer be persuaded to leave his land fallow for at least some time so that the soil
fertility is maintained. This will also check the side effects of overuse of natural resources like
ground water as also allow the FCI to periodically clear its granaries of the food stocks often
rendered unfit for human consumption by reasons of time lag or otherwise. For this, adequate
cash subsidies for the farmer are advocated on the pattern of US and European countries. This
argument is palpably flawed in at least two ways. In the US 95% of the population subsidizes 5%
farmers. However in the Indian context 20% of the tax paying population shall subsidize 65% of
the farming population, quite a quixotic proposition. Secondly the advocates of this policy forget
that this weakens the very National Food Security it seeks to promote. The only positive (aside of
plain subsidy to farmers) that this policy may achieve is the conservation of natural resources and
land fertility to some extent which to my limited understanding is best achieved by appropriate
agricultural practices like crop rotation and crop diversification rather than such quixotic state
policies.

Does the Consumer figure any where?

One interesting aspect of whatever public debate takes place on the issue of National Food
Security is that it is farmer and food shortages centric without any consideration of the consumer.
Whatever consideration the consumer finds is in the context that the teeming millions of India,
afflicted with abject poverty, are unable to meet their food requirements either for want of
purchasing power or otherwise. Thus the solutions attempted so far are also confined to
addressing the farmer’s issues and to some extent poverty alleviation programmes like IRDP,
NREGS (of recent origins only) or Swarojgar Yojna. So much so that initiatives like allowing
futures trading in food grains are based on the argument that it will help farmers get
remunerative prices for their produce. Any consideration of consumer’s interest is totally amiss.

There is no conscious effort to understand and address the issue of greater consumer participation
in demand and supply conditions. This needs a bit elaboration for proper understanding. Other
things being equal, one would say that demand and supply are not only inter-related but are
inter-dependent as well. Many would, however love to argue that the increased food production
does not necessarily lead to increased consumption unless it is accompanied by greater
purchasing power of the consumer. The hypothesis here is that it has a tendency to do so on
account of the fact that it generally leads to greater purchasing power of the consumer, given the
fact that 65% farming population is also a major component of Indian consumer population. It
also gives a boost to secondary and tertiary sectors of economy leading to in creased purchasing
power with the consumer at large. Having said that one can also safely say that increased
consumption also leads to greater food production as the farmer gets better remunerative prices if
market conditions are allowed to operate. Thus the MSP intervention is desirable only in the short
run and in the long term market forces are best allowed to take over. This will ensure adequate
National Food Security in the long run but shall also require some careful treading by the policy
planners.
What is the alternative?

Higher purchasing power of the larger consumer population comprising of the farmer, the labor
force and the not so insignificant white collar population is thus the best National Food Security.
And it is the best welfare measure for the farmer as well for the simple reason that higher
purchasing power of the consumer leads to better market determined crop prices for the farmer
for his produce on one hand and better purchasing power of the farmer as part of the same larger
consumer population on the other. The biggest advantage of this approach of course is that it
seeks to and minimizes class disparities which otherwise have brought our national and social
unity to the brink of disintegration. In other words demand led agricultural growth model based
on higher income levels of all classes of consumer is the recommended model.

But higher purchasing power of the consumer is easier said than done. And there can be no magic
wand that can bring about quantum jump in the purchasing power of such a large population
mass with wide existing income and even social disparities. Here is some food for thought.

Continue to provide high priority to Infrastructure building with special focus on social
development infrastructure to raise the development of under privileged sections for their fuller
participation in nation building in general and in securing National Food Security in particular.
Public investment in primary, secondary and vocational education as also in Public Health must
increase many folds.
Set up a large statutory fund to be called National Food Security Fund with continued annual
contributions for its considerable consolidation over a period of time. This fund be utilized liberally
in times of drought and other calamities like famine (remember Kalahandi deaths) for ensuring
continued purchasing power (through cash doles as well as infusion of food grains into market) of
the large masses of population whenever affected by such calamities. In normal circumstances no
such doles be extended from this fund and every one should be expected to earn his or her own
bread and butter.
The MSP for all crops may be abolished in phases. This should be accompanied by reforms in the
agricultural produce marketing sector to allow for free trade with the avowed objective of fetching
remunerative prices to the farmer for his produce.
The PDS system under this alternative approach should loose its relevance as all sections of
society shall be empowers through income raise to go in for market purchases of their food
requirements. However the Government may continue to procure food grains at competitive
market rates to maintain a minimum level of food buffer to ensure availability of food in times of
need. The management of this food buffer should ensure that the buffer is cycled continuously
and that no stocks are older than say two to three years at most.
Considerably cut down on the subsidies other than ones meant for ones personal intellectual
development (for example higher education for which incidentally, the State should own up major
responsibility), particularly the cash subsidies to specific groups like industry.
Reduce taxation rates particularly income tax rates to considerable extent to encourage all
sections of society to shake off the scourge of poverty and inculcate self respect so vital for the
success of the approach. This should be entirely plausible in a high growth economy such as ours.
Minimum wages be increased to at least a reasonable and decent level (say between Rs. 7000 and
Rs. 10000 pm) uniformly all over the country. The argument that Chinese wage levels are low can
not be allowed to keep a large population mass in perpetual poverty and industry must put its act
together. If the poverty stricken can be expected to survive even after food prices (they incur
80% onwards of their expenditure on food) are artificially jacked up by as much as 70% in a
year’s time through state policy, industry and other labor users can surely be expected to do
better.
National Rural Employment Guarantee Scheme should be modified to cover such activities as are
meaningful in the context of developed states like Punjab. It should be extended to every nook
and corner of rural India. Similar viable programmes be devised and implemented in urban areas
as well.
The above are meant to be some suggestions and not the exclusive or exhaustive measures as
the alternative approach. The issue needs a wider public debate and surely many new ideas shall
be thrown up through such a process which may shape up to a viable policy option for the
Government. A word of caution though shall be in order here. These measures are suggested as a
package and if adopted selectively or injudiciously may lead to disastrous effects.

The author is a Special Secretary to Punjab Government. The views expressed here are
his own and may not be construed to have anything to do with his employment or
employer.