March 10, 2004

Press Release

`Shining India' today is inhabited by one fourth of the world's hungry.  And, it has also the dubious distinction of being home to the  fastest growing hungry population.  The commitment of a society free of  `bhookh, bhay and bhrashtachar' stands thoroughly defeated -- the shadow of `bhookh' looms large driving hundreds to desperation and that final dreaded end -- starvation deaths.  We, from the Communist Party of India (Marxist), intend to tell this story on the `food question' in the second episode from our series, "Lies, damned lies and statistics".

Is India Really Shining?

Lies, Damned Lies and Statistics

Food Security Imperiled

v     The latest report on the State of Food Insecurity in the World (SOFI 2003) published by the Food and Agriculture Organization of the United Nations (FAO) has estimated that out of a total of 842 millions undernourished people in the world in 1999-2001, 214 millions, i.e. over 25%, were in India alone (India has about 17% of the world population). What is alarming is the fact that the number of undernourished increased by the biggest magnitude in India (nearly 20 millions) compared to all other countries of the world during the period 1995-97 to 1999-01.

v     Since the mid-90s the growth rate of foodgrains output has been lower than that of the population growth rate. Estimates made on the basis of data published in Economic Surveys and the Census, suggest that net foodgrains output per-capita had fallen from 181.59 kgs in 1994-95 to 164.59 kgs in 2002-03. Per-capita net availability of foodgrains (Net Availability = Net Output + Net Import – Change in Public Stocks) fell much more drastically from 177 kgs in the early 1990s to an all time low level of 151.06 kgs in 2000-01. By 2000-01 an average Indian family of four members was absorbing 93 kg less food grains, compared to three years earlier.

                Source: Estimates from Economic Surveys and Census data

It should be noted that the data on per capita food availability are all-India averages across income groups, which implies that the worsening of the nutritional condition of the poor has been far more severe than what the averaged figures suggest.

v     The Targeted Public Distribution System introduced during 1997-98 has pushed a large section of the population, which is vulnerable to hunger and malnutrition, out of the purview of the PDS. The distinction drawn between the Below Poverty Line (BPL) and Above Poverty Line (APL) segments of the population is itself questionable because the data and methodology used to draw the poverty line has been fudged and manipulated largely. Moreover, under the Vajpayee regime both the BPL and the APL prices of wheat and rice had been revised upwards and today both prices are higher than the prices that prevailed during universal PDS. Given the very low income and purchasing power of the poor, the increase in issue prices of foodgrains could have only one possible impact — a decline in consumption of foodgrains by the poor. This got reflected in the observed decline in foodgrains offtake from the PDS on the one hand and accumulation of huge stocks with the FCI on the other.

v    The buffer stocks held by the government increased enormously at a time when newspapers were full of reports of starvation deaths, suicides and malnutrition from different parts of the country. By July 2002, 63 million tonnes of foodgrains stocks had piled up as against the minimum norm of 24.3 million tonnes. The government had to incur huge carrying costs for holding these excess stocks of foodgrains, which obviously added to the food subsidies. Those subsidies, however, did not come to the benefit of the poor. Foodgrains were allowed to rot in godowns but not distributed to the starving masses.

v    Although the government ran down the surplus foodgrains stocks eventually, a part of it through the schemes like Antodaya and the mid-day meals scheme, a big proportion of the stocks were exported by providing incentives including permitting exporters to lift foodgrains at BPL prices during November 2000 to December 2001. Therefore, while the poor during this period who happened to be above the official poverty line had to pay Rs. 10.87 per kg of rice and Rs.8.30 per kg of wheat, the same were being sold to exporters catering to markets outside the country at Rs.5.65 per kg rice and Rs. 4.15 per kg wheat. According to the Economic Survey, India exported 9.6 million tonnes of foodgrains in 2002-03 (upto December) while the offtake from the PDS was 13.5 million tonnes (upto December). This policy of exporting foodgrains on the one hand and increasing the domestic price of foodgrains despite a significant proportion of the population remaining hungry on the other not only exposes the gross mismanagement of the food economy by the Vajpayee regime but also sheer insensitivity on its part towards hunger and livelihood of the poor.

v     The government and the policymakers have often put forward the argument that surplus food stocks were a result of `overproduction'. The Economic Survey 2001-02 argued that excess stocks were a surplus over what people voluntarily wished to consume, and represented a "problem of plenty". NSS data on falling share of cereals in the spending on food were quoted to argue that not only the well-to-do but all segments of the population were voluntarily diversifying their diets to high value foods away from cereals to eggs, milk and meat. This logic is completely fallacious because per capita availability of foodgrains includes not only direct consumption of cereals like wheat and rice but also the part converted to animal products by being used as feedgrains. The per capita availability or absorption of foodgrains always rises as a country’s per capita income rises not because people consume more foodgrains directly but because more animal products are consumed which in turn increases the indirect uses of foodgrains as fodder. China, with a per capita income about twice as much as India's, absorbed 325 kg per capita of foodgrains in the mid-1990s, compared to India's less than 200 kg at that time. Mexico during that period absorbed 375 kg per capita, high income Europe absorbed over 650 kg per capita and the United States absorbed the maximum, 850 kg per capita.

v     The abnormal trend in India of a sharply declining per capita foodgrains absorption while the average per capita income has been on a rise, is a reflection of increasing income inequalities. While the upper strata in both rural as well as urban areas have been diversifying their consumption away from cereals, the poor of the country, especially in the rural areas have been forced to consume less foodgrains under the Vajpayee regime due to their reduced incomes on the one hand and increased food prices on the other.