Opinion Despite UPAs Bill,food security to remain a pipedream
Moodys Investors Service described UPAs move to provide cheap grains to two-thirds of the countrys population as credit negative for India.
On Thursday,Moodys Investors Service described UPAs move to provide cheap grains to two-thirds of the countrys population as credit negative for India. The move would raise government spending on food subsidies to about 1.2 per cent of GDP per year from an estimated 0.8 per cent currently,exacerbating the governments weak finances.
More than the implications for the fisc,the implicit assumption behind the UPAs Food Security bill is that rice and wheat are key to provide food security in India. The premise is flawed.
Indians are moving away from cereals towards a protein-based diet,pictured in the inflation levels for each of these items in recent years. Cereal inflation at the wholesale level is around 5 per cent. In last fiscal inflation in cereal products averaged 13 per cent year-on-year.
Contrast that with 81 per cent inflation for vegetables this fiscal and over 4 per cent inflation for protein items,on top of a 14 per cent inflation last fiscal. In case of pulses too,inflation ruled at an average 20 per cent during the whole of last fiscal.
A Commission for Agricultural Costs and Prices report points to the changing dietary patterns. People are substituting cereals with protein-rich food so the share of expenditure on cereals in total food expenditure has declined from 41 per cent in 1987-88 to 29.1 per cent in 2009-10 in rural areas and from 26.5 per cent in 1987-88 to 22.4 per cent in 2009-10 in urban areas. Consumption pattern has shifted but agricultural production does not match the shift. The result is consistently high inflation at the wholesale level.
So the food bills focus on rice and wheat is archaic and does nothing to solve supply side constraints for vegetables,pulses and other protein items. Instead it will be a perverse incentive for farmers to increase cereal cultivation. Food-security,as used in the context of the bill,is then a misnomer. Also a 5 kg cereal support per person per month is less than half the average consumption of cereals in the country at 10.7kg per person,per month. Consumers would have to shop for their entire basket of vegetables and protein-based items including even cereals,more than half of which will have to come from the market. So much for food security.
Anil is a senior editor based in New Delhi. anil.s@expressindia.com
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