People's Democracy

Food Stocks And Hunger

Utsa Patnaik

IN the year 2001, the availability of cereals in the country dropped to an all-time low of less than 143 kg. per head and that of pulses per head similarly dropped to below 10 kg. The last time such abysmally low levels of availability were seen, was just before the World War II in the hungry thirties in colonial times, and again briefly for two years during the food crisis of the mid-sixties. An average family of five members consumed 114 kg. less of foodgrains in 2001 compared to the early nineties - a massive decline. Yet the majority of academics and activists alike seem to be complacently unaware of the depth of the hunger stalking India's tribal areas, villages and urban slums. The complacence arises from the fact that while the crisis over forty years ago was caused by a deficiency of supply which everyone could understand, the problem today is caused by deficiency of demand: and most people cannot comprehend how the existence of 65 million tonnes of food stocks can be compatible with increasing hunger. Their understanding is not helped by the fact that the explanations put forward by professional economists range from the merely foolish to the blatantly apologetic, seeking to rationalise the present abnormal situation in terms of voluntary choice by consumers.

FALLACIOUS ARGUMENTS

There are a number of incorrect and indeed dangerously fallacious arguments which have been advanced to explain the unprecedented build-up of over 65 million tonnes of public foodgrains stocks in the country. Today, in July 2002 the public stocks are 43 million tonnes in excess of the revised buffer norm for this time of year. One fallacious argument in official documents like the Economic Survey 2001-2002, is that the excess stocks are to be explained by the fact that minimum support prices (MSP) to farmers have been "too high" resulting in excessive procurement during 2000-01 despite a dip in grain output, and hence issue prices also had to be raised. Another related argument is that the excess stocks are a surplus over what people voluntarily wish to consume. The excess stocks represent a "problem of plenty", as the Economic Survey puts it: it says that the growth rate of superior cereals have been higher than population growth and people voluntarily wish to reduce their intake of cereals but rather consume animal products (milk, eggs, chicken etc) as their income rises. NSS consumption data are quoted to show that over time there is a declining percentage share of expenditure on cereals and a rising share on non-cereals. Hence there is a mismatch between what people want and the output structure resulting in excess stocks. A third argument put forward by some rather well-meaning but misguided people is that the excess stocks are at the expense of lowering of consumption for the majority of people, hence the surplus is notional; while up to this point the argument is correct, they then go on to say that two successive years of drought would make the stocks disappear. It almost seems that they are asking for droughts to solve the problem. The last argument is as dangerously mistaken as the first two are.

MISLEADING POLICY IMPLICATIONS

All these arguments are not only incorrect but are highly misleading for policy. The first argument on MSP being "too high" wilfully ignores the fact that stocks started building up two years before the quoted rise in the MSP, and that the very fact of record higher procurement in a year, 2000-01, when cereals output fell, itself indicates the presence of distress sales of cereals by farmers already affected by crashing prices for their commercial crops. The implicit suggestion that MSP should be lowered is irresponsible given the crisis of falling prices that farmers currently face, and the phenomenal increase in farm subsidies in the advanced countries, against whom they have to compete after removal of protection. The second argument on dietary diversification towards milk, eggs and chicken can be likened to Marie Antoinette's famous comment on the hungry Parisians asking for bread: "If they do not have bread, let them eat cakes." It wilfully ignores the fact that "diversification" is as much a feature of declining nutrition as of improving nutrition, and fails to even mention that the NSS, the source of the share of spending figures showing diversification, also shows that per head daily calorie intake from all foods, has been falling in both rural and in urban areas from already inadequate initial levels.  The third argument on droughts drawing down food stocks, wilfully ignores the fall in farmers and labourers' income, further loss of purchasing power and increasing distress, that droughts entail.

MISSING THE BASIC POINT

All three arguments miss the basic point about these stocks, that they are the result of a very large increase in the inequality of access to food in Indian society over the last five years in particular. The increased inequality of access in turn is the outcome of two sets of processes. The first is a massive cut in purchasing power with the poorer majority of the population, especially in villages, which itself has two components - contractionary, public-expenditure reducing economic reform policies in the nineties resulting in a collapse of employment growth and hence incomes, and sharply falling farm prices for commercial crops both globally and locally from 1996-7, also reducing incomes, for the extent of price fall has rivalled the extent of price crash in the years of agricultural depression preceding the Great Depression. The second process is implementation of targeting the food subsidy, which has been an utterly disastrous policy. The maximum cut in mass purchasing power, from 1997 onwards (as price falls came on top of job losses) were already taking place when, under pressure to "target" the food subsidy, government gave up the earlier system of unconditional and universal access by households to the Public Distribution System (PDS), and thereby initiated the institutional denial to the poor of access to cheap food, owing to the sadly misconceived system of Above Poverty Line (APL) –Below Poverty Line (BPL) introduced from 1997-98. This means that while the permit-licence system in every other sphere has gone, it is only the poor who have to have a new permit now - recognised BPL status - to draw cheap food and further, their entitlement has also fallen. The result has been a drastic drop in off-take (sales) from the PDS. The combination of all these processes have led to the present situation of increasing hunger.  Foodgrains availability per head in the country has hit an all-time low of only 152 kg. in the year  2001, nearly 23 kg. lower than in the early nineties. Only the AIDS -ravaged Sub-Saharan African countries and some least developed countries have a lower level than this at present.

Even progressive academics and intellectuals in a position to influence policy, are oblivious of the seriousness of the present situation owing to the wrong theories in which their thinking is locked. They are rendered conceptually blind to increasing hunger, and are putting forward all kinds of foolish, untenable arguments to rationalise the present crisis. If inaction continues, informed sources say that the stocks may well increase further to 75-80 million tonnes by the end of the year and availability will decline further. It is a mistake to think that the victims of these disastrous economic policies will revolt and make their distress obvious to our obtuse intellectuals and policy makers by agitating or rioting : they are scattered over thousands of atomistic villages, tribal areas and urban slums, and as they face increasing unemployment, income loss and deepening undernutrition, they are struggling merely to survive. Starvation is already a reality in many tribal communities. The ongoing rise of fascist forces in India is a classic process in which the victims of rising economic distress are easily mobilised by the communal-fascist forces and their blind anger turned against the minorities who are made scapegoats for their distress, in areas where the progressive movement is weak.

THE FACTUAL POSITION

The factual position with regard to foodgrains output and availability has to be understood before the reader can follow clearly the reason that the widely prevalent arguments we cited earlier, are incorrect. Some basic and undisputed facts, derived from official data sources like the RBI's annual Reports  and the GOI's annual Economic Surveys, as well as from the FAO's data base, must be borne in mind in order to realise the danger posed by the abnormal level of food stocks. First, in the nineties the foodgrains growth rate has slowed down drastically to 1.7 per cent annually and has fallen below the population growth rate of 1.9 per cent, so that per head annual net foodgrains output has fallen by about 3.5 kg. from a peak of 180 kg. in the three years ending in 1994-95,  to 176.5 kg. by the three-year period ending in 2000-01.

  Second, since the per head income in the country has been growing at about 3 per cent annually during this period, normally in such a situation of supply shortfall there should have been a need for food imports to satisfy demand. Annual net imports of about 3 million tonnes without any change in stock levels, would have just maintained the early-nineties grain absorption level, and in fact, even higher imports than this should have been required since per head income growth has been good and average absorption should have risen, everything else remaining the same. It is a grave mistake to think that the absorption of grain per head falls with rising income: on the contrary, all empirical evidence shows that the absorption of foodgrains for all purposes, always goes up fairly sharply with rising per head income (this includes both the direct use plus the indirect consumption through conversion of grain as feed into animal products including milk). This rise of per head foodgrains absorption is true in a cross-sectional sense looking at countries at different levels of income - compared to below 190 kg. in India, the Chinese, with double the per capita income of India, absorbed 320 kg. of cereals  per head in the mid-nineties, Mexico absorbed 375 kg. while high-income Japan, Europe and North America  absorbed over four times as much as India, with the USA registering 850 kg. per head annually of which about 200 kg. was direct consumption and the remainder converted to animal products. Needless to say, the higher the grain absorption, the higher is the total calorie intake per head from all foods. The rise in per head grain absorption is also found to be true when we study any individual developing country over time provided its per capita income is rising - Brazil and a host of other growing countries have higher per head absorption of grains today than they did a decade ago and they also have higher per capita total calorie intake. Conversely, the sub-Saharan African countries, with falling GDP per head, show falling per head grain absorption and falling per head calorie intake from all foods. In short, development always sees rising total grain intake per head and this is associated with improving nutrition, namely rising total calorie intake per head, while the opposite is true with fall in income.

(To be continued)