The Hindu Business Line : FOODGRAIN PARADOX

Continuing fluctuation and near-stagnation in foodgrains — wheat, rice, coarse cereals and pulses — production in recent years on the one hand, and falling per capita availability on the other, in addition to ballooning food subsidy burden and rising open market prices provide a discomforting backdrop to the otherwise ebullient mood in the bourses. The general feel-good in the economy contrasts with suicides by farmers and consumer discontent with high prices of many essential commodities. From a so-called surplus situation not long ago in wheat and rice, the country has slipped into a state of shortage, or tightening supplies at least, necessitating imports. Instead of rising, the per capita availability of cereals (427 grams per day) and pulses (36 grams) today is lower than what it was 10 years ago (458 grams 38 grams respectively), capturing well the alarming nature of the food availability status, and its impact on food and nutrition security.

Worse, these per capita numbers mask more than what they reveal, for, they seldom disclose the skew in the consumption pattern, which means a sharp variation in the level of consumption between, say, the top 10 per cent in the income ladder and the bottom 30 per cent. Is the average Indian's consumption basket getting diversified and the share of foodgrains declining? It is true, but not entirely. Rising incomes combined with expanding output of milk and poultry products as also fruits and vegetables do prompt changes in food habits. But it would be a specious assertion that other, more expensive, food products are replacing cereals and pulses in the menu of most people. Robust growth in industry and services sectors helps generate incomes in the hands of a third of the population; and this is where much of the food basket diversification is happening. On the other hand, with agriculture growing by less than 1.5 per cent a year the last three years (lower than even the less-than-modest annual average growth of 2.2 per cent in the Ninth Plan), a large part of the rest cannot, for obvious reasons, afford to graduate to high value foods. That puts tremendous moral responsibility on the government to ensure a decent level of farm income growth or access to food in the rural areas.

The twin objectives of the food security system — provision of minimum nutritional support to the poor through subsidised foodgrains and ensuring price stability across the country — obviously involve food subsidies. For 2005-06, food subsidy is expected to register a new record of Rs 26,200 crore, up from Rs 25,800 crore the previous year. But a significant part of the ever-rising subsidy bill comprises avoidable expenditure on procurement and carrying costs of foodgrains, which could otherwise be expended on building rural infrastructure. There is a challenge on hand. Policymakers have to think up more creative strategies for a broad-based agricultural development that ensures growth with equity while maintaining fiscal prudence.

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