Has Government lost the Food Security Plan for India?

Why Economic Survey & Budget 2017-18 silent on Food Security Plan and Implementable Agriculture Policy?

Has government lost the food security plan for India?

By:

Vijay Sardana

Food insecurity as a state in which “consistent access to adequate food is limited by a lack of money and other resources at times during the year.” Good shorthand terms for food insecurity are “struggling to avoid hunger,” “hungry, or at risk of hunger,” and “hungry, or faced by the threat of hunger.”

Every government claims that it is doing great job in the interest of country and people of India, irrespective ideology and political affiliation, but the facts on ground are far from satisfactory on most parameters which are concerned to common man when we compare with other countries.

We have seen some good initiatives in all sectors and radical steps like demonetization in last one year. Budget also made lot of good announcements to please urban citizens after the shock of demonetization and before GST, which will increase tax components of various services and products consumed by urban citizens. They key challenge remains is food inflation. In economic survey is silent about food security status of India. This year’s economic survey does not even mention about the progress made between last year and this year on various issues raised in last year’s economic survey.

Ground reality about India’s food security:

To meet the demand of food for the growing population, India will need at least 20 million tons of additional food every year to meet the minimum nutritional requirements of the citizens. As of today, we are way short of these targets and this is reflected in rising food prices in the market place but not in distorted method of WPI and CPI calculations. Today India is having acute shortage of edible oil, pulse, feed materials and fodder and many other items. Per capita production is below what is required as per nutritional recommendations.

This shortage is ranging from 30% to 60% of the actual requirement by the country. Food import bill has gone up by Rs. 19,000 crores in last one year and food exports are down by Rs. 20,000 Crores in last one year. AT the same time food wastage is in the range of about Rs. 80,000 crores. There is no mention of these hard facts in economic survey.

On the other hand, there is deliberate policy attempt to curb the exports by fixing minimum export price  and putting stock limits on essential commodities to control the food prices for the urban consumers at the cost of price realization by the farmers. At the same time government is not able ensure minimum support price to the farmers which was promised in election manifestos. The proposed MSP rates are much below than even Consumer Price Inflation Index (CPI), forcing farmers to poverty. This clearly says that our domestic supplies are not able to catch up with growing demand.

Rising prices of sugar, wheat, pulses, vegetables, milk, honey, fruits, meat and egg are sending strong signals that somewhere agriculture sector is not delivering as per plan.

According to Economic Survey 2015-16, page 69 says, the central challenge of Indian agriculture is low productivity. It evident in modest average yields. First, consider the main food grains – wheat and rice. These two cereals are grown on the most fertile and irrigated areas in the country. One caveat while comparing paddy yields is that varieties are not exactly homogenous. Also the differences between varieties are large. they use a large part of the resources that the government channels to agriculture, whether water, fertiliser, power, credit or procurement under the MSP program. Even then, average yields of wheat and rice in India are much below that of China’s – 46 per cent below in the case of rice and 39 per cent in the case of wheat. There is no mention in economic survey what was the progress last year and budget is silent what is planned to address this challenge because irrigation level in Punjab is already 99% of the cropping area, fertilizer is available to them, then why productivity is going down? It means our existing model of agriculture research and extension services has failed to deliver as per the changing needs of society. We are still glorifying the history of green revolution, but not realizing and accepting the fact that other countries have performed better than us when it comes to agriculture productivity. Still there is no attempt to reform these vital aspects of agriculture.

What does this mean for Farm Incomes?

According to Economic Survey 201-16, page 73, The negative consequences of low agriculture yields extend from precarious incomes of farmers to large tracts of land locked in low value agriculture, despite growing demands for high value products such as fruits, vegetables, livestock products because of consumption diversification with rising incomes and urbanisation. According to NSS data, the average annual income of the median farmer net of production costs from cultivation is less than INR 20,000 in 17 states, it means farmers get Rs. 54 per day, far below than minimum wages even in MGNREGA, is this achievement of the governments? It means, in money terms, farmers are worst than the unemployed people in this country in terms of annual income. This includes produce that farmers did not sell (presumably used for self-consumption) valued at local market prices. Given high wedges between retail and farm gate price, this might underestimate income but it is still low. Moreover, the variance in agriculture income between the more and less productive states is also very stark. There is no mention in economic survey and in budget what government is thinking to address this challenge. In the name of poverty there are many scheme to support but no tangible attempt to increase farmers’ income.

According to Economic Survey 2015-16, page 76, The absence of MSP procurement for most crops in most states implies either that farmers are selling their products to private intermediaries above the MSP or the converse, i.e., farmers have little option but to sell their produce at prices below the MSP, to the monopolies and cartels created and sponsored by government through APMC Act and supported by CACP illogical method of MSP calculations, resulting in a regional bias in farm incomes and promoting poverty.

There is a general sense that the latter is a more prevalent phenomenon, highlighting the need for reorienting agriculture price policies, such that MSPs are matched by public procurement efforts towards crops that better reflect the country’s natural resource scarcities. There is no mentioned of public procurement plan for crops other than wheat and rice. Pulses was included in procurement agenda but failed to ensure MSP for farmers in APMC market. There is no mentioned of oilseeds, where we are importing our 60 to 70 percent of requirement. Oil cake is which are vital to address the acute shortage for protein in animal diets for milk production, livestock productivity and human health.

Government is projecting total production for pulses in 2020-21 will be 24 million tons where according to WHO recommendations, the demand will be about 40 million tons. Who will feed India pulses and at what cost? Same is the case in Edible oil and other crops.

The best way for government to cover its failure in addressing the growing gap between food & nutrition security and food production is by refusing the actual nutritional requirements of Indian population and livestock sector in order to cover the gap between demand and production.

Allocation for in budget to address challenges mentioned above:

Our total allocation for Agriculture and Farmers’ welfare is Rs. 35,984 crore. Special focus has been given to ensure adequate and timely flow of credit to the farmers. Against the target of `8.5 lakh crore in 2015-16, the target for agricultural credit in 2016-17 will be an all-time high of Rs. 9 lakh crore and this year target is about Rs. 10 lakh crores. To reduce the burden of loan repayment on farmers, a provision of Rs.15,000 crore has been made in the BE 2016-17 towards interest subvention and same is extended this year as well. Government has also approved Prime Minister Fasal Bima Yojana and provided a sum of Rs. 5,500 crore in the Budget 2016-17, extended the same this year.

With all this, has productivity improved? Are farmers happy with the income they are getting? Are consumers happy with the food prices in retail market? This is the moot question. Who is benefitting from these schemes. Has poverty reduced with these schemes?

Where are the results to address the food security?

According to the “Budget 2016-17’ speech of Finance Minister, we are grateful to our farmers for being the backbone of the country’s food security. We need to think beyond ‘food security’ and give back to our farmers a sense of ‘income security’. Government will, therefore, reorient its interventions in the farm and non-farm sectors to double the income of the farmers by 2022. There is no mentioned what are the farmers’ income targets for 2019 before next general elections.

First of all, Government must acknowledge that, the dependency on imports are going up, exports are going down, yields are stagnant in most of the crops, cost of cultivation is going up, farmers are not even getting the minimum support price for commodities recommended by government and at the same time trade distorting policies like stock limits, discouragement for exports like minimum export price which is higher than world market prices are the rules of the game. These steps are to keep the urban middle class, as consumers, happy at the cost of hardworking and poor farmers. These policies are discouraging private investment away from agriculture sectors.

There may be a surgical plan for food security of India, but can we implement the same by keeping it secret from the farmers, consumers and state governments in India, where agriculture is the state subject?

As a citizen, I expect Economic survey must highlight factual economic reality of India, not the dreams & desires of authors of economic survey. I also expect serious debate on these issues vital issues affecting common man and food security of India in the Parliament.