Digitisation of the agri-food system can come in very handy in chalking out a more rational and robust system that can help achieve the Zero Hunger goal of SDGs by 2030. (Illustration by C R Sasikumar)
October 16 is observed as World Food Day every year by the United Nations Food and Agriculture Organisation (FAO). It is a reminder of the commitment made at the highest level to ensure food and nutritional security. The world has made tremendous progress in increasing food production by large-scale adoption of better seeds, more irrigation, and higher doses of fertilisers and pesticides. Farm machinery has become more efficient. All this could not have been done without increasing incentives to farmers — input subsidies, higher prices for their produce, or a mix of some of the two. On this day, many people who are committed to the cause of food and nutritional security, including scientists, technologists, economists and agri-business entrepreneurs, renew their vows to eliminate hunger and malnutrition. Globally, as per the State of Food Security and Nutrition in the World (SOFI report) of FAO, roughly 2.33 billion people still face moderate to severe food insecurity. This a challenge to those committed to providing food and nutrition security to all.
This year’s theme of FAO’s World Food Day is “Right to Foods for a Better Life and a Better Future”. The “Right to Food” approach of the FAO encouraged the UPA government led by Manmohan Singh to pass the National Food Security Act (NFSA) in 2013. It was to cover roughly two-thirds of the Indian population in providing rice, wheat or coarse grains (5kg/person/month) at Rs 3/kg, Rs 2/kg, and Rs 1/kg, respectively. These prices could be revised upwards after three years of the Act, keeping in view the ballooning magnitude of food subsidy on account of this Act, and the overall finances of the government. At that time, the erstwhile Planning Commission had estimated the headcount poverty ratio was about 21 per cent. This figure was contested by some NGOs, and as a result, it was revised to about 29 per cent by the Rangarajan Committee. Even at this higher estimate of poverty, questions were raised by many economists, including this writer — I was part of that government — why such highly subsidised food should be available to two-thirds of the population.
The Atal Bihari Vajpayee government (1998-2004) reformed the food subsidy regime and made PDS a targeted scheme. Under that scheme, the antyodaya (most vulnerable) people got free food, while those above that had to pay at least half the minimum support price (MSP) being paid to the farmer, and those above the poverty line had to pay 90 per cent of MSP. I still feel that was the most rational policy decision. “Right to Food” does not mean that everyone, or two-thirds of the population, get free food. The government’s job is to make sure that food is easily available and accessible. But distributing free food to more than 800 million people today is economically irrational, to say the least.
The current NDA government, led by Prime Minister Narendra Modi, has used a different definition to measure poverty. The NITI Aayog’s Multi-dimensional Poverty Index says that the poverty ratio has declined from 29.13 per cent in 2013-14 to 11.28 per cent in 2022-23. If this is truly the case — in fact, the government does not stop speaking in congratulatory terms about this achievement — why are we still distributing free food to more than 800 million people? Remember even a tiny ant also has to work a lot to get food, and you can see ants storing food, working in a long chain of cooperation. Why can’t humans work and earn and have their basic food?
To me, as a policy analyst, if the government wants to give free food to even say 15 per cent of the population, I have no problem. But above that, everyone must pay for food. Free food beyond this 15 per cent of the population is nothing else but a vote-catching tactic. This must be resisted by taxpayers. I am saying this because food subsidy is the largest subsidy in the Union budget. Along with fertiliser subsidy, it cuts down much more rational and productive investments in agri-food space, such as in agri-R&D, precision agriculture, micro-nutrients, women’s education and sanitation. These investments are almost 10 times more effective in ensuring the food and nutritional security of our people than free food and highly subsidised fertilisers and power. Subsidies, when they are abundant and almost open-ended, become an instrument of corruption. ICRIER research shows that a substantial part (almost 25 to 30 per cent) of these two subsidies, food and fertilisers, never reaches the intended beneficiaries. If one looks at the inefficiency in the use of these two subsidies, and adds that to the leakages, the overall loss easily goes to 40 to 50 per cent of the total amount of resources being spent on them. This defeats the very purpose of “Right to Food”.
Can this regime of highly ineffective food and fertiliser subsidies be reformed? The short answer is “yes”, provided the government summons the courage to bite the bullet and has enough lead time to prepare for proper implementation. The lead time is not many years, but just six to 12 months. A group of dedicated people is also needed who are committed to this cause of rationalisation.
Digitisation of the agri-food system can come in very handy in chalking out a more rational and robust system that can help achieve the Zero Hunger goal of SDGs by 2030. In this process, one has to be beware of engaging roadside consulting companies who open their shops to make quick money and get contracts from the government through their friends in their bureaucracy. And, they are mushrooming in India.
If the Modi government can take up this challenge, it can make Indian agriculture more vibrant, climate resilient, and nutritious, helping to overcome the curse of malnutrition. Else, slogan mongering will go on without much change in the agri-food space.
Gulati is Distinguished Professor at ICRIER. Views are personal
