5 th International Food Security Symposium University of Illinois, - PowerPoint PPT Presentation

Ashok ok G Gulati ti Infosys Chair Professor for Agriculture Indian Council for Research on International Economic Relations (ICRIER) 5 th International Food Security Symposium University of Illinois, Urbana-Champaign April 1-3, 2019

 Hunger within the overarching concept of Food Security  Institutions and Innovations- Past and presently unfolding  Political Economy of Food and Agri-Policies in India and its implications  Global Hunger Index (GHI) and India’s challenge

 Not getting two square meals a day…  NSSO…hungry…those who slept without a meal (<2%)  But FAO’s food security concept: ◦ Sufficient Availability of Food ◦ Economic and physical access ◦ Absorption in terms of nutrition ◦ Stability of food systems

 Large ge a and G Growing P g Populat ation: 1.35 billion in mid 2017, likely to surpass China by 2024 (1.44 billion),  and touch 1.5 billion in 2030; 1.66 billion by 2050; and 1.52 billion by 2100; 65 percent of population currently below 35 years of age  Fas Fast growi wing G GDP DP: Since economic reforms of 1991, GDP growth around 7 percent p.a, and  likely to remain so by 2030;  Urb Urbaniza zatio ion : from 380m in 2018 to 600m by 2030; need to build one Chicago each  year till 2030…will put pressure on scarce land, water, energy and logistics  Hig igh e exp xpenditure o on f food: Avg HH exp on food 45% (NSSO, 2011); per capita income likely to grow at  5-6 percent p.a till 2030.

Aver erage Size of holdings (ha)  Number of agri-holdings 2.40 more than doubled, from 2.29 2. 29 around 71 million in 1970- 2.20 71 to 145.7 million in 2.00 2. 00 2015-16. 2.00 1. 1.84 84 1.80 1. 1.69 69  Average holding size fallen from 2.3 hectares in 1970- 1. 1.55 55 1.60 71 to 1.1 in 2015-16. 1. 1.41 41 1.40 1.33 1. 33 1. 1.23 23  In 2015-16, 86% of 1.15 1. 15 1.20 1. 1.08 08 holdings were small and marginal (<2 ha) operating 1.00 47 percent area. Sour urce ce- Agric icult ltura ral Censu sus s of Indi dia

d blocks 100% 90% 80% ssed 70% sess e of asse 60% 50% 40% entage 30% Percen 20% 10% 0% Over Exploited Critical Semi critical Safe Saline

 Paddock brothers (1966)…Famine 1975  IFPRI (1998): India will be importing 63 mt of foodgrains by 2020  Govt of India (2006) (Planning Commission) projecting deficit of 10 mt by 2011-12  Hans Binswanger (2012): 73 mt imports of grains by 2039

140 120 Import Export 100 80 60 40 20 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

42.4 45 37.8 40 35 30 26.5 24.3 US$ Bn 25 20 13.5 15 15.9 7.8 10 6.0 5 2.6 0 Trade surplus Agricultural Exports Agricultural Imports Source: FTPA, MoCI

 How did India overcome food shortages in the past?  What is happening on food front in recent years?  What is likely to happen in future, say by 2030?

“From Ship to mouth” to Green Revolution: Wheat (second largest producer, up from 6.5MMt in 1950-51 to 99.7 MMT in 2017- Wheat production in Punjab All India wheat production 18) 18 110 Period of 100 16 Period of Green 90 Green 14 Revolution T) (MMT) 80 Revolutio (MMT) T) in Punjab 12 n 70 ction ( 10 60 ction ( 50 8 Product Product 40 6 30 4 20 10 2 0 0 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 Post introduction of HYV in 1966, very first wheat harvest in 1967-68 shot up by 45 percent from 10.4 MMT in 1966-  67 to 16.5 MMT in 1967-68. In Punjab (Seat of Green Revolution), production increased 2.5 MMT to 5.6 MMT between 1966-67 and 1971-72. Source: Agricultural Statistics at a Glance (2016) Directorate of Economics and Statistics Department of Agriculture Cooperation and Farmers

Rice production in Punjab All India rice production 14 120 Period of Period of 110 Green Green 12 100 Revolution in Revolution 90 Punjab T) (MMT) MMT) 10 n (MMT 80 70 8 ction ( uction 60 6 Product 50 Produc 40 4 30 20 2 10 0 0 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018  IR8 from Philippines in 1966: Rice production increased by 24% from 30.4 MM  In Punjab, it increased from 0.3 MMT to 0.9 MMT respectively between 1966-6 Source: Agricultural Statistics at a Glance (2016), Directorate of Economics and Statistics, Department of Agriculture, Cooperation and Farmers

 Policy decision to import 18,000 tonnes of HYV wheat (Lerma Rojo and Sonara-64) from Mexico; and IR-8 from IRRI  Role of ICAR and SAUs, plus agri-extension  Critical Role of Pricing and procurement institutions: APC and FCI came in existence in Jan 1965

India’s White Revolution largest producer at 176.4 MMT in 2017-18 (Innovations in institutions and technologies for small holders) Compl plete Vajapayee’s De-lice De cens nsing ng de-licensing 170 Effect OF OF I III 150 OF II 130 4.7% 4. 7% T) (MMT) 110 3.8% 3. 8% 90 ction ( 4. 4.2% 2% 70 Product 6. 6.9% 9% 50 4.6% 4. 6% 0.2% 0. 2% 30 Business as usual 10 1960 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017  Operation Flood  Production soared from 20 MMT in 1970-71 to 30.4 MMT in 1979-80 to 44 MMT in 1985-86 and 69.1 MMT in 1995-96, a jump of 50 MMT in 25 years! Source: NDDB FAO USDA Basic Animal Husbandry Statistics Department of Animal Husbandry Dairying & Fisheries (DoAHDF)

All India Egg and Poultry Meat production 4 90 -Liberalized grandparent breeding stock imports 80 - Vertical integration & contract farming 70 3 MMT) Meat (MMT Nos.) 60 illion N 50 (Billio 2 ultry Me 40 Eggs ( 30 Poul 1 20 10 0 0 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Poultry Meat Eggs Production - Egg production from 1.83 billion in 1950-51 to 88.1 billion in 2016-17 (3 rd largest)  and poultry meat production from 0.06 MMT in 1961-62 to 3.46 MMT in 2016-17 (5 th largest);  Consumption – From 400 grams and 25 eggs per person/year respectively to 3.35 kg and 69 per person/year from 1990-91 to 2016-17; Feed conversion ratio – From 2.2 to 1.6 (Broilers);; Egg laying capacity - From 200 to 320+ eggs per year (layers).  Source: Basic Animal Husbandry Statistics, Department of Animal Husbandry, Dairying & Fisheries (DoAHDF), f

Source: Basic Animal Husbandry Statistics, DoAHD&F, Government of India Production (M Pro (MMT) 10 12 0 2 4 6 8 1950 1953 1956 1959 1962 1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016

2002: Policy decision to 40 introduce Bt cotton in India 35 on (MMT) 30 25 tion ( 20 ucti Produc 15 10 5 0 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 Source: USDA, 2017

Polit litical ical Economy y of POLICY CY SETT TTING NG

19 19 Indian agricultural policies have DUAL (but conflicting) aims Consumer ers Farm rmers ensure remunerative prices ensure access to food at affordable prices Budgetary ry Do Domestic ic Food Fo d Tra rade de payments nts market t subs bsidi dies polic po licie ie (Input ut regul ulations ns s subs bsidi dies) Translati ting the the p pol olicy s sett tting i into numb nto numbers OECD Prod oduc ucer a and nd Cons onsumer S Sup uppor ort E t Esti tima mates me meth thod odol olog ogy Result lt: I : India dia t taxes it its f farm rmers rs a and d heavily ily s subs bsidis idises it its consumers

20 20 India “implicitly taxes” its agriculture…large input subsidies do not fully offset the effect of price-depressing policies (on average, taxation amounted to 14 percent of gross farm receipts, 2000-01 to 2016-17) MPS and budgetary support, % PSE 40 8 20 4 0 0 0 - 2 -20 -4 - 4 - 5 - 5 - 7 -40 -8 -60 -12 - 12 - 13 - 15 - 15 -80 -16 Domestic and trade - 18 policies in place - 19 -100 -20 reduced Gross Farm - 22 Receipts - 24 -120 -24 by 6 % in 2014-16 - 26 -140 -28 - 29 - 31 -160 -32 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Budgetary transfers Market price support (MPS) % Producer Support Estimate (right scale) www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)

21 21 How does India compare with OECD and other emerging economies? Consumer S r Suppo pport E Estim imate ( (CSE): : Pro rodu ducer S r Suppo pport rt E Estim imate (PSE): : India ia heav avily ily subsid idises it its consumers India dia t taxes it its farm rmers Policies that depressed farm prices together with Negative PSE in India as producers receive food subsidies reduced consumption prices below those on world markets expenditure by 25% on average across all commodities www.oecd.org/tad Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD)