Food Security

Monday, September 18, 2017

1:50 AM

Def by FAO: Food security is a situation when all people at all times have sufficient food to
meet their dietary and nutritional needs to lead a healthy and productive life
Constitution: Art 21, Art 47 (State shall regard raising the level of nutrition and standard of
living of people and the improvement of public health as among its primary duties)

History of Food Security policy in India

As a response to food shortages, GoI launched PDS during 1960s which relied mainly on
procurement of food grains by FCI and their distributions through Fair Price Shops.
By 1970s, PDS had evolved into a universal scheme for the distribution of subsidized food.
Currently, it is the largest distribution network in the world.
In 1990s, the government revamped the PDS to improve access to food grains to people in
hilly and inaccessible areas and to target the poor. The Targeted PDS operates through a
multi level process in which the centre and the states share responsibilities.
Government launched a unique Mid Day Meal Scheme in 1995 to encourage enrolment
and attendance in primary schools along with improvement in nutritional levels of the
children.
Antyodaya Ann Yojana- was launched in 2000 targeting families having monthly income of
less than Rs. 250 who were not able to afford food even at subsidized rate.
Government notified National Food Security Act 2013 to provide food and nutritional
security to its people as a legal right. It doesnt disturb the structure and provisions of
Antyodaya Ann Yojana.

National Food Security Act

To strengthen food security of people, the government enacted NFSA 2013 which marks a
shift from welfare based approach to rights based approach.
The act legally entitles upto 75% of the rural population and 50% of urban population to
receive subsidized food grain under TPDS. Total - 67% of population.
There is special focus in the act on nutritional support to pregnant women and lactating
mothers and children upto 14 years of age.
The act also keeps in mind the important role of women of household and provides for an
important provision of empowerment of women by giving status of head of household to
the eldest woman of the household, for the purpose of issuing ration card.

Challenges
1. Inefficiencies have been observed over the years in functioning of FCI related to
procurement, storage, transport and distribution.
2. Production and Yield: From 2010-11, the percentage changes in average yields of pulses,
wheat and rice are showing declining trends. Area has remained constant with stagnated
yields.
3. Price Volatility: With the fluctuations of food prices as observed by food inflation based on
WPI, it affects the economic access to food.
4. Wide interstate variations in the performance of PDS.

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 4. Wide interstate variations in the performance of PDS.
5. Centralized Procurement: The Centralised procurement model of NFSA was found
unsustainable earlier (Replaced with Decentralized procurement in 1997-98)
6. Increase in food subsidy bill (about 1% of GDP) due to increasing costs of handling food
grains and widening difference between economic cost of food grains and the central
issue price.

Opportunities
Small and Marginal Farmers will get the supply at 1/8th of the price which they produce
and sell and hence it will promote them to switch over to commercial crops and
horticulture.

Public Distribution System

Issues
Storage Issues: In absence of covered storage space, food grains are stored under the
Open storage without following the established procedure with higher risks of the
unexpected rainfall, pest infestation risks.
Procurement Issues: Procurement of excessive grains more from the prescribed buffer
stocks. The procurement has been double of buffer requirement since last 5 years.
Transport Issues: The allocated stocks for the PDS system is not lifted due to the poor
transportation techniques and facilities.
Leakages: As per Shantakumar, Leakages in PDS range from 40 to 50 percent, and in some
states go as high as 60 to 70 percent

Shantakumar Recommendations

1. Procurement and Stocking

Decentralized Procurement: FCI should transfer all procurement operations atleast
to states who have considerable experience and infrastructure. Eg: PB, HR, MP
NWRs: Popularise Negotiable Warehouse Receipt System (NWRs). Encourage farmer
to deposit his produce to an authorized-warehouse, get a receipt, and borrow
agriculture loan for next crop-cycle
Quality Checks: Stringent Quality checks
No more open ended procurement above buffer stocking norms.
MSP Policy: Due priority to pulses and oilseeds.

2. Storage Reforms
Outsourcing: FCI should gradually outsource grain-storage function to central
warehousing corporation (CWC), state warehousing corporation (SWC), and private
sector players
End to End computerization and Online tracking of entire system from procurement
to retail distribution.
Transport grains in containers, instead of gunny-bags to reduce losses.

3. On PDS and NFSA

Reduce Coverage: 67 percent coverage of population is on much higher side, and
should be brought down to around 40 percent, which will comfortably cover BPL

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 should be brought down to around 40 percent, which will comfortably cover BPL
families and some even above that
Direct cash transfers to consumers to reduce leakages.
Pricing for priority households must be linked to MSP, otherwise NFSA will put
undue financial burden on the exchequer, and investments in agriculture and food
space may suffer
Targeted beneficiaries under NFSA or TPDS are given 6 months ration immediately
after the procurement season ends to save hassles
GoI should defer implementation of NFSA in states that have not done end to end
computerization.

WTO and Foo Security

Public Stock Holdings Issue at WTO

At WTO, many developed countries lobbied against public stockholding of grains by countries
like India.
They say such stockholding distorts the markets.
Current WTO rules aim at a limit on minimum support price-based procurement.

Two types of procurement are defined

i) Non Trade distorting:

WTO rules classify procurement and holding of public stocks for food security purposes as
Green Box.
These procurements are considered as non trade-distorting.

ii) Trade Distorting

If food grains for the public stocks are procured through a minimum support price (MSP) and if
this price is higher than the fixed reference price, then this procurement is considered trade
distorting.
Once the MSP is considered trade-distorting, WTO puts limits on price support through MSP.
Any support should be less than 10% of the value of production of the particular grain being
procured.
But the main problem with this is that the fixed reference price was calculated on Base Period
1986-88, which is too low considering today's prices. (Basically, this means that any MSP India
decides could turn out to be higher than the reference price and thus will be considered price
distorting.)

So how will this impact India?

In case the limit is breached, then the existing WTO rules would have allowed a legal challenge
to India's public stock holding of food grains.

India's efforts to prevent this limit on public stock holding

Peace Clause: In 2014, GOI intensely engaged with WTO to obtain a Peace Clause.
Under this, even if we breach the trade distorting limit of 10%, no country can challenge
our programme till a permanent solution is found.
This was agreed on, and adopted by the WTO membership.

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 This was agreed on, and adopted by the WTO membership.

Conclusion about WTO Issues

Providing food to the poor or targeted groups at subsidised prices is fully WTO-compatible.
Centre has not undertaken any commitment in the WTO for any kind of limit on the food
supplied under the NFSA.

Challenges to Food Security

Indian food and nutritional security is being challenged by many socio, economic and
environmental factors:

1. Increase in urbanisation and Increase in demand for food due to rising income.
2. Dietary preferences such as high demand for livestock products and consumption of
more processed food.
3. Global climate change is a long term challenge on food security as it could lead to scarcity
of fresh water in northern and peninsular region of the country.
4. Declining and degrading land resources pose a serious threat to food security as
availability of per capita land is declining sharply due to increase in population.
5. Agricultural land is being diverted to other uses such as infrastructure development,
urbanisation and industrialisation, negatively affecting agricultural production
6. Biodiversity of plants and livestock, which is very crucial for sustaining long term
productivity, is under threat.

Way Forward
1. Genetic enhancement of plants/animals /fish is considered to be a major option to
sustain food security by increasing productivity
2. Mechanisation of agriculture and food production systems
3. Increase in food processing sector by increasing investment infrastructure and facilities.

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