Food: Not Grain Security
Yoginder.k.Alagh
Introduction
• Food: not Grain Security, because poor
people also eat vegetables, fruit, meat
and milk products
• And Infrastructure and Backup for food
is more complicated than for grain
• Simple but ignoring it leads to a narrow
focus and policy failure
Demand
• Agricultural demand is rising. When you grow
in per capita terms at around 6 ½ to 7% every
year Engels Law sees to it that demand for
cereals is growing slowly, the demand for noncereal food crops, non-food commercial crops
and non crop based agricultural goods like
milk, meat and tree crops grows substantially.
Per capita income of $ 3000 annual in
purchasing power parity terms seems a
dividing line for higher food demand. This is
happening in India, some what suddenly and is
leading both to the resurgence of income
possibilities for the agricultural sector and
wage goods becoming a constraint (food
Inflation?).
Details
Demand Projections
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Food group
1999-2001 2015 2030 Million tonnes
Cereals
159
199
225 (13.1%)
Potatoes etc
25
37
46 (24.3%)
Fruits &
Vegetables
108
160
208 (30.0%)
Vegetable oil
11
18
23
Sugar
29
40
47
Eggs
2
3
6 (200%)
Chicken
1
4
10 (250%)
Milk
66
104
146 (40.4%)
Beef,
mutton & pork
4
5
7
Figures in brackets are 2030/ 2020X100
Source: F.A.O.,2008, Y.K.Alagh,2000
Cereal demand growth between 2020 and 2030 is 13%. Demand growth of
fruits and vegetables, eggs, chicken and milk is much higher. The decadal
growth figures for potatoes is twenty four percent, thirty percent for
vegetables, forty percent for milk, two hundred percent for eggs and two
hundred and fifty percent for chicken. Demand for beef, mutton and pork
also goes up but given religious reasons the absolute figures are low. The
low growth of cereal demand is compensated by very high demand growth
of non cereal based and non crop based agricultural goods.
Some Numbers
Income elasticity's are high for cereals for the poor and low for
the non-poor. They are negative for inferior cereals for the non
poor.
Cereals have a low expenditure elasticity in the Nineties for the
same group. The elasticity was low for the poor in the
Seventies and is less than 0.5 for the same group in the
Nineties.
• For commodities like milk and milk products, eggs and meat,
edible oil and sugar, the estimates of expenditure elasticity's
were high for poor households, in some cases above 2, but
were below 1 although not very low for the non- poor. There is a
large literature on the declining consumption share of grains by
poor households in India and its impact on poverty estimates.
• (For details See, Yoginder.K.Alagh, The Future of Indian
Agriculture, National Book Trust, 2012, Ch.2)
Rural Urban Continuum
•I have argued for the last decade, beginning with my.
S.K. Dey Memorial Centenary Lecture that we have
underestimated the rate of growth of large villages
and small and medium towns as also non farm
employment.
•This was later supported by the UNDP and the FAO
and reinforced by studies of rural market spread by
satellite pictures. Market towns are more wide spread
in India then in other developed regions and also
some developed countries.
•Census clinched the argument in 2011 for the past
but not the future
Underestimating Rural
Movements
Census Towns is a pan Indian phenomenon. Statutory Towns
increased from 2001 to 2011 by 242, but Census Towns by 2532.
• ‘The Census of 2011 estimates that 833 million people continue
to live in rural India.’(Government of India,2011) But until very
recently ignoring Census towns was projecting that 870 million
persons would live in Rural India in 2011(Government of
India,2008). It has finally changed its earlier figures on urban
population in 2011 of 357.95 million to the Census 2011 figure
of 377.11 million (missing out 2 crore persons) and notes the
phenomenon of Census Towns but its projections for the future
are sadly as earlier. They underestimated the rural population
moving to small (Census, not official) towns by 37 million
people. That is a lot of people. As compared to an existing
population of 377 million, the projection of 405 million in
2017(Government of India, 2006) is grossly low
Infrastructure
• This in my view compels a completely different approach to the
development of market infrastructure of producer’s
associations, cooperatives and self help groups, working with
corporate and local institutions for support to the emergence of
large villages and small towns as sustainable and growing
communities of the future rather than resource starved social
infrastructure denied outposts where large millions of young
Indian women and men come from villages for higher wages
and for trade in very adverse circumstances. In a benign policy
environment it can be showed that with rising urban jobs rural
workers will also increase their wages by over a quarter in the
next decade, if not they will continue in poverty
Possible But?
• In the next two decades, Indian agriculture can meet
the requirements of food security and rapidly
diversify itself. It can function in a rural urban
continuum, with rapid developments of markets and
shifting of working populations from villages to
linked small towns and also from crop production to
value added activities. Employment growth will be
high in these activities chasing a high rate of
economic growth. All this will happen if policies give
the appropriate signals in term of technology and
organizational support and the necessary economic
support in terms of pricing and infrastructure
support. Otherwise there will be rising food prices
chasing few goods and immiserisation. We have
separately developed a small model to provide a
framework for such discussions (Y.K.Alagh, 2013).
Numbers again
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The model to provide a framework for such discussions is as follows;
A benign process will be in the following larger frame work :
India 2020
Total Population (million)
1273
Rural Population (million)
738
Labour participation rate %
46
Labour Force (million)
340
GDP growth (% annual)
8.5
GDP agricultural growth (% annual)
4%
Employment elasticity w.r..t..
Agricultural growth (Low)
Employment elasticity w.r.t.
Agricultural growth (High)
-0.1%
Land augmentation through
Increase in cropping intensity
(High)
Increase in cropping intensity
0.2%
-0.3%
0.5%
0.0 to
Happy Outcomes
• In a benign framework of development, agriculture will grow at
4% annual, technological change and diversification will be
high so the shift away from agricultural on this account will be
20% over the decade 2010-2020. (Elasticity of -0.3%). This will
mean a corresponding increase in real wages of the agricultural
labour force.
• Rising Wages have been a trigger of technical change in rural
areas. It is not wise to restrict MNREGA since a large ICRISAT
field study shows its role in investment and efficiency
enhancement
• If the shift does not take place on account of poor agricultural
productivity increase, with an employment elasticity of minus
0.1, and a growth rate of these per cent annual, the shift will be
4% and an insignificant increase in real wages of the
agricultural sector. This will be a very cruel process of
economic transformation.
Land and Water
• The only other factor which will affect
outcomes in this logical frame work is the
augmentation of the land base of Indian
agriculture. If land augmentation emerges
again with success of the interrelated issues
of land and water management, cropping
intensity rises by 0.5% annual and in the
decade 2010 /2020, real wages would rise by
7% additional or 27% in the total and ruralurban inequality would go down. The two
big question marks relate to non renewable
resources, particularly land and water
The Cafeteria
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Water Management is critical for agriculture: Our Plans include:
‘Steps to greatly improve governance in water management through Water
User Associations such as Pani Panchayats and similar PRI‐based institutions.
A focus on Command Area Development and the rehabilitation and physical
modernisation of existing major irrigation systems.
Extensive rainwater harvesting assisted by space‐based maps with active
ground truthing and convergence with other development schemes.
Comprehensive aquifer mapping and extensive ground water recharge.Farmer
Based Ground water management systems( the Andhra Experiment)
Move towards sprinkler and drip irrigation and away from flood irrigation
Enable assured irrigation to much more land far beyond the present 42 per cent
of arable land
Strengthen drinking water resources
Integrate these activities with existing surface reservoir based canal irrigation.’
Policies
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A bifocal policy initiative is required. Subsidies with adverse
consequences on productivity of land must be phased out.
Simultaneously profitability of alternate crops and activities
must improve through market, economic and financial reform.
The role of sponsoring policies for alternative distribution
channels so that there is genuine competition in input
supplies is very necessary. Cooperatives, non-profit
organizations and partnerships between private sector,
Coops, NGOs or local governments are required. A Committee
developed a Producer Company Law which was incorporated
in The Company Bill in 2002 but is now in trouble. Producer
cooperatives, working on a cooperative principle can be a very
powerful instrument of growth and the required level of
diversification.
Producers groups should be encouraged to enter into
strategic relationships with supply chain actors.