Will India’s poor remain hungry?

A proposed Food Security Act would help – but not solve – the nation’s food insecurity.

Indian Farmer in Sunna
Farmers are now the primary beneficiaries of India’s public food distribution systems  [GALLO/GETTY]

Salina, KS – As India’s proposed new Food Security Act hovers in political limbo, the nation remains hungry. Prime Minister Manmohan Singh made headlines in early January when he labelled the fact that 44 per cent of children less than five years old were underweight and 65 children die each day of malnutrition “a national shame“. In all, 21 per cent of all Indians are undernourished.

Indeed, India ranks among the 15 hungriest countries in the world according to the Global Hunger Index – a grim fact made even grimmer when one recalls that one out of every six people on Earth lives in India.

There is much talk these days about a human right to food. Even the governments that don’t recognise such a right are aware of the political and social turmoil that erupts when food becomes too scarce or costly. Since the 1950s, many nations have, in effect, purchased revolution insurance by buffering their food supplies against the sometimes devastating gyrations of world markets.

So-called public food distribution systems (PDS) have operated for years in dozens of countries around the globe. Governments buy up grains from farmers at a guaranteed price, maintain national grain stocks, and distribute grains and other foods through their PDS to consumers at subsidised prices.

India’s PDS has been selling subsidised food through “fair price shops” on a national basis since the 1970s. The government in Delhi provides grain stocks to the states, who, in turn, supply the networks of fair price shops. The Food Security Act would increase the amount of grain going through the system by more than 75 per cent. That would raise the total to 66 million tonnes, or more than one third of India’s entire grain production. If it were loaded into rail cars, it would occupy a train more than 5000 miles long that would stretch from Delhi to Casablanca.

Under the act, a family living below a specified low-income threshold would receive a new food-ration card, allowing each family member seven kilograms of grain each month at ultra-cheap prices: three rupees (about six US cents) per kilogram for rice, two rupees for wheat and just one rupee for sorghum and millet. That programme would serve 46 per cent of the population of rural India and eight per cent of urban residents. Another 27 per cent of Indian households, ones with somewhat higher incomes, would be eligible for three kilograms of grain each month at a higher, but still subsidised, price.

When governments intervene through a PDS to help both the farmer and the consumer, there’s no free lunch. If the farmer is to stay economically viable and the consumer is to have affordable food, public funds have to fill the gap. And that’s something that gives ulcers to those who truly believe in India’s market makeover.

The pitfalls of targeting

The rise of neoliberal economics in recent decades has prompted policymakers to call for the curtailment or elimination of the PDS in many countries, most notably in Egypt, Iraq and India. The intent is to save money, but the risks include runaway food inflation and hunger – risks that few governments are willing to run. Therefore few, if any, programmes have been ditched completely. Instead, as a compromise, most PDS are now “targeted” only at low-income households.

Targeting sounds wise, but it turns out that the more effort governments put into purging ineligible households from any subsidy programme, the greater is the likelihood that eligible people will be excluded as well. A survey of PDS in eight countries concluded that, in places where a large proportion of the population is poor, targeting generally causes more problems than it solves and can cost more money than it saves.

Until 1997, all Indians could participate in the PDS. Since then, the system has been targeted at households that live below the official poverty line. One result is that millions of low-income Indians have lost access to subsidised food. Now, one-half to three-quarters of all families living below the poverty line in the country’s poorest states have no ration card at all. In the first seven years of the targeting era, per capita calorie consumption declined in India, and age-adjusted body weights for children younger than three years old also dropped. 

The states of Tamil Nadu, Andhra Pradesh and Chhattisgarh have bucked the targeting trend by maintaining near-universal coverage of the PDS, augmenting grain stocks at state-government expense, computerising distribution and “de-privatising” fair-price shops. That has not only improved people’s access to food, but also reduced waste and fraud.

But rather than learn from success stories such as those, drafters of the Food Security Act moved to reverse such gains with a provision that would prohibit states from extending coverage of their PDS to people not designated by the central government as eligible.       

Economist and hunger expert Jean Dreze, a member of India’s National Advisory Council, has written that the Food Security Act’s continuation of targeting “prevents the emergence of a cohesive public demand for a functional PDS”. He calls targeting “an ugly business” and argues that it turns “a purely statistical benchmark, the ‘poverty line’, into a permanent social division”.

In need of an overhaul

That’s not to say that India’s PDS doesn’t need a good overhaul. The biggest complaint from critics is that huge volumes of rice and wheat stocks never make it into the hands of consumers in some states. The share of PDS food grains that disappear from the system nationwide reached a peak of 53 per cent in 2005, but the government claims that losses have since declined. Some of the loss is the result of spoilage, but a greater amount is illegally diverted into the cash market, where it earns a hefty profit.

The most enthusiastic free-market fans among India’s leaders have proposed replacing the PDS with distribution of food stamps – or even cash payments – to below-poverty-line households. A provision of the Food Security Act would allow such changes at the discretion of individual states. That would mean the end of the fair-price shop; recipients would buy at private food stores or supermarkets instead. The cash would be automatically deposited in bank accounts (which most of the poor don’t currently have), or if food stamps were used, they would be distributed in the form of a “smart card” as they now are in the United States.

“The Food Security Act would go some way toward strengthening the faltering PDS – kind of like a repair job on an old ’86 Oldsmobile that’s a pain to drive but still runs.”

Neoliberal theory says cash is a more efficient form of assistance than food. But studies in country after country have shown that in practice, subsidised food distribution improves nutrition more than an equivalent amount of cash aid. Cash benefits can very quickly be eroded by inflation, and even poorly nourished people can find themselves spending much of the money they receive on something other than food. Debt collectors, shady salespeople and out-and-out cheats have ways of knowing which families have extra cash coming in and will set out to relieve them of it. 

Whatever mode of delivery is settled upon, the PDS entitlement could end up merging with another political hot potato: the proposed Unique Identification Document (UID) or card that the government envisions will be a requirement of every Indian. The card would include not only a photograph but also electronic records of iris scans and all 10 fingerprints. An eyelash would be collected from each person as well, for archiving DNA. Civil-liberties advocates, not surprisingly, worry that the card could be used as a means of privacy invasion and repression.

Missing the irony

Those who would integrate the PDS more fully into the global marketplace seem to be missing the irony of the current situation, in which rural India’s increasing exposure to the global market helped make expansion of the PDS necessary in the first place. Today, most people poor enough to be eligible for food rations live in rural areas where people once grew what they ate. Where diverse food crops once covered the landscape, there are now vast monocultures of cotton, wheat, rice, maize and other crops to be sold for cash – and often not enough cash to pay the debt amassed to grow them.

The PDS, originally aimed at cities as a subsidy to manufacturers (to keep the workforce fed on cheap food and allow wages to stay low), is now a lifeline for landless workers in the faltering farm economy, who sow and harvest crops they don’t eat, only to then consume low-quality wheat and rice that’s been trucked into the village fair-price shop from far away.

The Food Security Act would go some way toward strengthening the faltering PDS – kind of like a repair job on an old ’86 Oldsmobile that’s a pain to drive but still runs. And the government will continue to have to step in and fill the gap between the price the farmer needs and the price the low-income consumer can pay.

Meanwhile, the only long-term solution, not just in India, but in every hungry country, is to build an agricultural economy that not only produces enough nutritious food for everyone, but also provides good work for all rural people and rewards them sufficiently in return.

Stan Cox is research coordinator at The Land Institute in Salina, Kansas, USA. He is currently writing a book on the past and future of rationing.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.