People's Democracy

Eating Less and Less

Yet Shining More and More

Utsa Patnaik

THE majority of the Indian population is achieving a remarkable feat according to World Bank and many home-grown economists. They are eating less and less – that is not disputed. In fact, as we will see, the Indian level of consumption has reached that of the least developed countries.  But not only is poverty declining even though Indians are eating less and less, the poor are also shining, according to a recent paper published by two World Bank economists. How can this be possible when average energy intake as well as average protein intake is falling? Well, according to other economists, to talk about energy and protein is to be fundamentalist : they are not good indicators of welfare. So, here we have the remarkable achievement only India can boast of in the entire world - to have a population which is more and more hungry yet, less and less poor and indeed shining to boot.  And it has achieved this remarkable feat because, in case you are too ignorant to know it, the official word is that Indians are unique. They could not only survive but also meet all their food and non-food costs in the year 2009 by spending each Rs18 per day in villages and Rs 22 per day in towns and cities. But, you might say, that what I have to spend for just one large bottle of water, or on only 250 gm of pulses – so how can it meet all daily food and non-food (fuel, transport, clothing, medicines) needs? Ask the question – if you can approach them - to the luminaries concerned.   Ask them as a reality check, to spend only one week in village or city spending nothing but Rs 126 and Rs 154 to meet all food, cooking and lighting fuel, medicine, rent and transport requirements, without sponging on local residents as they are wont to do, if they ever go to villages at all.   

Now that the proposed Food Security Act – many call it the Food Insecurity Act, for good reason as it lowers existing entitlements –is being discussed it is useful to take a fresh look at recent developments on the food and nutrition front. These developments are not good. 2008 was a bumper harvest year, yet the level of cereal consumption per head in this country had reached another low equal to the world’s lowest level, that of the least developed countries as a group. As a matter of fact, the least developed countries have been increasing their consumption over the last few years while India’s has been declining so the figures have converged to the same level by 2008. The position now in the drought year 2009-10 is likely to be even worse once we get the final figures on exports and on change in stocks. In many ways, this is a repetition of the 2002-3 drought year.

Big Food Stocks have been building up again, so hunger among the people is growing.

There has been a repeat of the 1999 to 2002 scenario when huge foodstocks of 64 million tonne had built up by July 2002 because people were too poor to purchase at the PDS prices. Since the last two years, again large stocks have been building up – June 1, 2009 stocks were 54.8 million tonne, far in excess of buffer needs, while March 1, 2010 stocks were already 45.8 million tonne and rising according to the Reserve Bank of India’s  Macroeconomic and Monetary Developments in 2009-10 released on April 19, 2010. By next month, July, these stocks are expected by informed observers to rise further to at least 60 million tonne.

There is an eerie similarity to 2002. Then, ministers were complacently talking about how stocks were ‘comfortable’ when they should have had a sense of urgency, a sense of something being very wrong since stocks can rise abnormally only when sales fall abnormally from the fair price shops given that output per head is falling. Now once more ministers and Planning Commission members are talking about ‘comfortable stocks position’ instead of recognising it as a red light, a sign of danger that sales have fallen and so the stocks are coming out of more and more empty stomachs. Not only were stocks rising - during 2007 and 2008, a record 16 million tonne of cereals were exported as global prices rose.  The calculation is simple – the more exports there are, the less is available for the people to consume. The more addition to stocks there is, the less there is for people to consume. So the domestic supply is calculated in every country, including ours, by deducting/ adding the amounts exported/imported, as well as deducting /adding the amounts  added to/drawn down from stocks.

No one can argue that stocks are rising and exports are rising because output is rising, because output growth has slowed down drastically in the current decade, even more than population growth has slowed, so on a per head basis output is lower than ever before. Per head cereal output in pre-reform year of 1989 which was a good harvest year was 193 kg, while by 2007 another good year, it was much lower at 182 kg. But exports and stocks change were tiny earlier so the domestic supply in 1989 remained almost the same as output, at 192 kg. But in 2007 despite lower output there was 12 million tonne total of export plus addition to stocks so the domestic supply dropped to only 174 kg per head. This change is not small, it means an average family of five was consuming in all forms, direct and indirect, one quintal less in the year in 2007 compared to 1989.

The year 2008-9 was worse still despite being a bumper harvest year, since the net exports jumped to a huge 14 million tonne and addition to stocks was very large at 17 million tonne, totalling a massive 31 million tonne deduction from output, lowering the output available for consumption to only 156 kg per head. Moreover this output for consumption it must be remembered is not for consumption by humans alone but includes all the animal feed for producing milk, poultry etc, and all the cereals which are processed industrially. The direct consumption as food, has dropped to about 136 kg per head. The least developed countries in 2007 had higher total cereals consumption per head than India, as the Table shows. By 2008, India’s direct consumption too had dropped below these countries’ 2007 level .  

The current drought year is likely to be even worse than 2008-9. Despite much lower output procurement has been around 50 million tonne, a part of it being distress sales. But distribution through the PDS is hindered by policy makers refusing to remove the artificial barriers they had put by targeting. From 1997 onwards, the population was divided arbitrarily into very few ‘below poverty line’ while putting millions of actually poor into ‘above poverty line’ denying them access to affordable food. And unless targeting is done away with and there is reversal to universal demand driven distribution, the denial of food to the poor will continue. Most of the food subsidy is going uselessly in meeting the cost of holding huge food stocks while more and more people go hungry.

Why should this be happening? Why should there be more and more exports and more and more unsold stocks even out of falling output? Because there is fall in mass purchasing power as the global recession has raised unemployment and as rapid food price inflation has eroded real incomes. The mass of people are more impoverished and simply unable to afford enough food. The rapid food price inflation which we see today was inevitable since output growth has been allowed to fall drastically for nearly two decades, under foolish neo-liberal policies of cutting back public expenditure on irrigation, and reducing farmers’ viability by attacking meagre farm subsidies on the one hand, and exposing them by liberalising trade to competition from subsidised foreign products on the other.

  There are highly educated people among India’s planners and economic advisers but they are surprisingly badly informed on many matters and they put forward wrong arguments to justify falling cereal consumption. One widely believed but completely ignorant and incorrect  argument is that falling cereal consumption is nothing to be surprised about because consumers as they grow richer diversify away from cereals which are perceived as inferior and consume more animal products, fruits and vegetables. Firstly, if fruits and vegetables are to make up the energy decline from consuming say 100 gm less of cereals per day, a person would have to eat nearly two kilograms of parwal or brinjal and practically turn into a cow with multiple stomachs.  Second, the more consumers diversify to milk, eggs, chicken meat etc, far from the consumption of cereals going down, it rises much faster than before. This is because apart from direct consumption as food which rises, larger and larger quantities of cereals are demanded and consumed indirectly as feed grain converted to animal products as diversification takes place, and the amounts for industrial processing also go up. Nowadays indirect use also includes conversion to ethanol.

 Table 1    Output and Consumption of Cereals Directly as Food and Indirectly for
Feed and other uses for selected countries in 2007.

The attached Table giving 2007 data should be studied carefully.

As a poor country develops and its average income rises, its cereal consumption per head is seen to rise steeply – both the direct part for consumption by humans first rises and then falls with even higher income,  while that part of indirect demand which is feed for conversion to animal products, rises especially fast.  The least developed countries as a group had lower direct, but higher total cereal consumption than India because they converted one-quarter to animal products.  (By 2008 owing to massive exports and stocks addition as mentioned, India’s direct consumption has dropped to these countries’ level of 136 kg and the total has dropped to 156 kg.) Egypt and Indonesia have somewhat higher income than India, and their direct (175 kg, 231 kg) cereal consumed as food and total cereal consumed for all uses including feed (249 kg, 358 kg.) are considerably higher than India’s miserable levels (153 direct and 174 total).  China’s income is nearly double India’s and while China’s direct cereal consumption is about the same as India’s , the total is 115 kg higher because diets have been much more diversified. The highest consumption in the world is in the richest country USA at nearly 900 kg of which nearly nine-tenths is for indirect use. These patterns have been maintained for four decades over which the data are available.

So we can see how misleading the argument is which tries to justify our falling foodgrains consumption (cereals make up nine-tenths of foodgrains and pulses the remaining one-tenth) by pretending it is normal. It is extremely abnormal that our consumption per head is falling although overall income per head is rising and the rich are certainly diversifying their diets. Far from falling our consumption should be rising as in other countries.  The reason it is falling lies in the character of growth under the neo-liberal dispensation which has poured income into the pockets of a minority which is gorging itself on chicken and liquor, while depressing incomes for the majority to varying extents, so that even the millions who are undernourished to begin with are forced to cut back and suffer declining nutritional intake.

Do the rulers of this country have the brains to understand what is happening and the will to take action to reverse these trends? It remains to be seen. The way they continue to peddle false poverty estimates and cut down food entitlements does not offer much hope. Only sustained peoples’ movements can make a difference.