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Relevance Of The Public Distribution System

Updated: April 13, 2013 1:12 pm

A new report from the NSSO reveals a sharp increase in reliance on the public distribution system for purchase of foodgrain in rural and urban India. This is significant at a time when the country is debating universalisation of PDS, the Food Security Bill, and Direct Cash Transfers

 

Are India’s households, rural and urban, able to feed themselves to maintain even a baseline daily dietary adequacy? What impact has the steady rise in food prices had on the food baskets purchased by these households? Guiding answers to these questions are provided by the latest report of the National Sample Survey Office (NSSO), based on its 66th surveying round, which concerns household consumer expenditure. A summary reading of the data leads to three alarming conclusions.

 

  1. The urbanisation of India’s population is pushing households both rural and urban into greater food insecurity.
  2. The only means by which a large and rapidly growing number of households is able to mitigate the rising cost of a basic food basket to reach a calorific and nutritional minimum is the public distribution system (PDS).
  3. The recorded actual drop in the consumption of cereals over five short years has overturned comprehensively the claim made by central government that districts and villages, towns and cities in India are self-sufficient in food production.

      These conclusions, drawn from a rapid reading of the NSSO’s report, Public Distribution System and Other Sources of Household Consumption, are based on several important observations. These are:

  1. The share of PDS in the consumption of rice and wheat (and atta) has risen steeply between the last such survey, in 2004-05, and the 2009-10 survey, the results of which have been released. The report has stated that the percentage of households consuming PDS rice has risen in rural India from 24.4 per cent in 2004-05 to 39 per cent in 2009-10, while households in urban India consuming PDS rice has risen from 13 per cent in 2004-05 to 20.5 per cent in 2009-10. Consumption of PDS wheat (including atta) by households in rural India has risen from 11 per cent to 27.6 per cent between the two surveys, and in rural India the corresponding rise has been from 5.8 per cent to 17.6 per cent between the two surveys.

The percentages themselves do not help us envisage the size of the populations indicated by the salient points of the NSS survey. Reading the survey percentages against census data helps us gauge the size of the populations being discussed. While there has been an increase in the percentages of rural and urban populations consuming PDS cereals, the number of households too has grown over five years.

 

  1. The NSSO report has included the change in the trend of PDS shares in the consumption of rice and wheat. These are expressed in shares of PDS rice and wheat consumption compared between the two surveys, five years apart. In both rural and urban households, the rise in the amount, per head over 30 days, of PDS rice and wheat was accompanied by an actual drop in the corresponding amounts (grams) of these cereals purchased from other sources. In 2009-10 compared with 2004-05, rural households consumed, per person, an average of 0.56 kg more of PDS rice while consuming 0.94 kg less from other sources; for urban households the figures were 0.28 kg more of PDS rice and 0.47 kg less of rice from other sources. Similarly, in 2009-10 compared with 2004-05, rural households consumed, per person, an average of 0.31 kg more of PDS wheat while consuming 0.26 kg less from other sources; for urban households the figures were 0.2 kg more of PDS wheat and 0.48 kg less of wheat from other sources.

 

  1. In only five years, there has been a reduction in the per capita consumption of cereals, taking together both PDS and other sources, for rice and wheat. In 2009-10 the rural consumer bought 0.37 kg less (over 30 days) of rice than in 2004-05 (when the average was 6.37 kg); the urban consumer bought 0.19 kg less of rice (the 2004-05 average was 4.7 kg). Likewise, the urban consumer bought 0.28 kg less (over 30 days) of wheat than in 2004-05 (when the average was 4.35 kg). The only gain recorded in this survey is that of 50 grams more wheat purchased in 2009-10 by the rural consumer (over 30 days) from the 2004-05 average of 4.19 kg.

Several factors have contributed to the very alarming conditions described in the NSS report. One is the growth rates of India’s urban and rural populations between the two census periods of 2001 and 2011—the urban decadal growth rate of 31.8 per cent far outstrips the rural decadal growth rate of 12.1 per cent, which indicates the migratory shift from talukas and tehsils into towns and cities. Over the five years between the two NSS surveys, the percentage growth of urban households reporting consumption of PDS cereals is under the corresponding rate of growth for the same five years (in the period 2001-11) of the urban population in general. There have for the last few years been statements from government, the ministry of agriculture, ministry of food processing and from the representatives of the food and retail industry to describe what is known as the dietary transformation taking place in urban India (by which is usually meant the growing proportion of dairy and meat), and this transformation is probably part of the reason for the difference in the growth rate described in this point, but this does not help explain the reduction in the total consumption of cereals.

Two is the cost of food including cereals. The period 2004-05 to 2009-10 includes one entire run of the food price rise of 2007-08 and part of the 2010-11 spell of high food prices. This is reflected to a degree by the wholesale (WPI) and consumer price (CPI) indices when taken for the period between the two NSSO surveys. Hence, in mid-2004 the WPI was around 99 (adjusted for the current series which is based on 2004-05), which rose to around 155 in mid-2009, an increase of about 64 per cent. In mid-2004 the CPI (the rural labourers series, food group) was 330 which rose to 488 in mid-2009, an increase of about 68 per cent. These increases, steep as they are, do not fully capture the food price volatility in our typical markets, nor do they reflect the regional variations that are still only imperfectly recorded by retail food price monitoring mechanisms, government and otherwise.

Three is the variation within the decile classes (the surveyed population arranged into tenths by their monthly per capita expenditure) recorded in detail, for each state and union territory, for rural and urban populations. These monthly per capita expenditure classes display wide variations in quantities of PDS rice and wheat purchased, and in the monthly amounts spent on cereals (from all sources).

For example in Karnataka, a household in the third rural decile consumes an average of 15.1 kg of PDS rice a month and 5.8 kg of rice from other sources while a household in the ninth decile consumes an average of 8.3 kg of PDS rice a month and 20.4 kg from other sources. In Madhya Pradesh, a household in the second rural decile consumes an average of 11.7 kg of PDS wheat a month and 21.5 kg from other sources while a household in the eighth decile consumes an average of 7.8 kg of PDS wheat a month and 38.1 kg from other sources. Within states the dependence on the PDS of households with lower monthly expenditures on food—such as those in the first to fifth deciles—is greater (in some cases very much greater) than the average national figures used above indicate.

The conditions described by the data in the NSS report, Public Distribution System and Other Sources of Household Consumption, are best combined with the results of Census 2011 and the retail food price indicators (rickety as they are). When this is done, the true impact of the sweeping and rapid changes in the transformation of food and its consumption become clear. These include the industrialisation of agriculture, the displacement of the cultivator from the land, the use to which primary crops are put (a greater portion for processed and retailed food than ever before), the triumphant announcements of record procurement.

The need to recognise the speed of these changes and their widespread impacts—as indicated forcefully by the data in this report—is now urgent, especially by elected representatives and local administrations that can encourage local responses to the rising cost of food. A number of such measures are contained in the public consultations on the National Food Security Bill, in the representations to the central government by concerned groups and activist organisations on matters such as genetically modified seeds, on cash transfers and on the universalisation of the PDS. The message of this NSS report is that such measures are already long overdue. (Infochange)

By Rahul Goswami

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