Why is India’s food system under severe stress?

[00:00:00] Hello and welcome to All Indians Matter, I am Ashraf Anjaniya. India has more land

[00:00:07] under cultivation than any other country. It is among the leaders in the production

[00:00:11] of rice, milk and wheat yet India's food system is under immense pressure.

[00:00:17] One indicator of this is India's poor ranking on food sustainability indices and the 2023

[00:00:22] Global Hunger Index ranking India 111 out of 125 countries. It classified the level of hunger

[00:00:28] in India as quote unquote, serious. As India looks at 2030 and beyond, its food system faces

[00:00:34] many challenges ranging from depleting natural resources to climate change, fragmented land holdings

[00:00:39] and increasing urbanization. Meanwhile the biggest agricultural challenges water.

[00:00:44] India's farming practices and cropping patterns place immense pressure on the water system

[00:00:49] leading to a severe depletion of groundwater and frequent crop failures. The small average

[00:00:54] holding of farmers is a major issue too. Meanwhile populations are expanding and diets are changing

[00:01:00] which means that people are demanding more from the land. All Indians Matter

[00:01:16] Let's try to understand some of the issues before India's food system. The agricultural system

[00:01:20] comprises many millions of small landholders who still employ outdated modes of farming.

[00:01:25] As rural distress widens these plots are reducing further and climate change is wrecking

[00:01:30] havoc on farmers' incomes. This despite farm subsidies roughly doubling over the past decade.

[00:01:36] Naturally this is a threat to India's food security not something the world's most

[00:01:40] populist country can take lightly. Don't forget India has also a major exporter,

[00:01:45] a food like rice and sugar. It is also emerged as the largest producer of spices,

[00:01:49] cotton and pulses, the second largest producer of foods and vegetables,

[00:01:53] the third largest producer of eggs, and the fifth largest producer of poultry meat.

[00:01:57] Fearing a political fallout every time there is a shortage of food prices rise,

[00:02:01] the government imposes export restrictions. This means that farmers earn less and the world

[00:02:06] gets a restricted supply of these foods. So India's problem is also the world's problem.

[00:02:11] Let's take the example of price. India accounts for 40% of global shipments roughly equal to the

[00:02:17] next four exporters combined. When export curves were imposed last year, poorer importing nations

[00:02:22] were hurt as global prices rose to a 15-year high. At one stage it was feared that there would

[00:02:27] be unrest in some nations in Africa that dependant on Indian rice. The ban has created a

[00:02:32] 2 million ton shortfall in the global market. This means that global prices will likely be volatile.

[00:02:37] India's withdrawal of supply was estimated at 4.67 million tons. Although other rice exporting

[00:02:43] nations stepped in, they could supply only 2 million tons, leaving a depends supply gap of more than

[00:02:48] 2 million tons. What's not always understood is that such bans hurt Indian farmers the most.

[00:02:53] This is because the farmer now has to make do with a lower price for their crop than what they

[00:02:57] would get through export sales. No wonder a measurement of agricultural support developed by the

[00:03:02] organization for economic cooperation and development shows that the negative impact of

[00:03:06] price lowering rules outweighs that of input subsidies. The green revolution transformed Indian

[00:03:12] agriculture about six decades ago but we haven't reset our priorities since then. Subsodies

[00:03:17] are still targeted at staples like wheat and rice rather than crops needed for better nutrition.

[00:03:22] What about the harmful use of fertilizers and pesticides and the drop in groundwater levels?

[00:03:27] This stress is visible in the fields. We all know that agriculture

[00:03:30] employs more than half the population, but accounts for only 15% of the GDP and this share is likely

[00:03:37] to fall. One of the major problems is that most farmers lack access to institutionalized

[00:03:43] credit. Most of them rely on local money lenders that charge cutthroat rates of interest.

[00:03:47] They turn to money lenders because they often don't have the land deeds in their name which means

[00:03:51] banks won't lend to them. The unsecured loans must be repaid at interest rates of 10% to 25%

[00:03:57] above market rates, so the farmer that grows our food is often the angriest among us.

[00:04:02] This debt trap results in farmer suicides that have continued unstempt for years. While farmers

[00:04:07] turn to money lenders for credit to run operations and unreliable monsoon means their profession is

[00:04:12] something of a gamble. This risk rises as the climate changes, the soil degrades and groundwater

[00:04:18] levels fall. Successive governments have tried to solve the problem by forgiving loans but that's

[00:04:23] applicable only to formal credit. Banks have subsequently been encouraged to give farmers more credit

[00:04:28] and the Kisan credit card scheme has helped to some extent. The government passed three farm laws

[00:04:33] saying it would liberalize the agriculture market. However, they were widely seen as enabling

[00:04:38] big business to take over the sector. Farmers protested in large numbers and the government was

[00:04:43] forced to withdraw the laws. Now with general elections coming up and farmers once again protesting

[00:04:48] mainly for a legal guarantee for the minimum support price, the government's focus is on agriculture

[00:04:53] again but the Narendra Modi government has made little progress on unchanging the sector from state

[00:04:58] control which discourages crop diversification. It launched a campaign not too long ago to promote

[00:05:04] millets but it hasn't made much headway. The average Indian diet remains heavy on cereal and

[00:05:09] not enough protein. Among the other notable disappointments has been the Pradhan Mantri Fasal Bhima

[00:05:13] Yogyna, a crop insurance scheme. Poor awareness and the lack of money to pay premiums has hobbled

[00:05:19] its impact so for the 2023 Khareep season, the scheme covered 28 million hectares or 14% of India's

[00:05:25] crop land. However, women was somehow left out of the net despite three quarters of rural women

[00:05:30] working in agriculture. Roughly 85% of the scheme's beneficiaries were male so a large proportion

[00:05:36] of the target beneficiaries were excluded. China, India's great regional rival to has struggled with

[00:05:42] agriculture but has fed better. Its yields in key crops such as corn and wheat are higher than

[00:05:47] India's and the value of its overall production is 4 times as much. The difference between India

[00:05:52] and China is that the latter has invested significantly in better seeds and optimizing fertilizer

[00:05:57] use. In India, investment in R&D is less than 0.5% of agriculture's gross domestic product.

[00:06:04] In China meanwhile, annual research spending was more than the US, India and Brazil combined

[00:06:08] between 2019 and 2021. India needs not just R&D investments but an enabling ecosystem.

[00:06:15] At least 1% of agriculture GDP must go to R&D. This could lead to great returns too

[00:06:21] as the marginal returns from investment in agricultural research are 5-10 times higher than

[00:06:26] through subsidies. It's the best way to ensure food security for the country. Yet another initiative

[00:06:31] that hasn't taken off as it should have is farmer producer organizations or FPO's. They were

[00:06:36] created by aggregating small producers to boost earnings prioritizing high value crops.

[00:06:41] As a collective, they can lower trade and transport costs for farmers. FPO's were envisioned

[00:06:46] as something between a cooperative and a company but in India, cooperatives haven't always done

[00:06:51] well, often suffering from corruption and political interference. The problem with FPO's is that

[00:06:56] they lack capital and numbers. I wanted to also look at the food marketing chain which accounts for

[00:07:01] a wide gap in India's agriculture ecosystem. Value chain and marketing platforms that link farmers

[00:07:06] to markets are vital to the determination of prices. However, the agri marketing structure

[00:07:11] is fragmented involving a large number of intermediaries which means that the costs pile up.

[00:07:16] These costs, it is estimated, account for 30% to 50% of retail prices. The situation is made worse

[00:07:22] by market charges, agents who charge commissions and control the purchase market,

[00:07:27] broken supply chains that include poor storage and unavailability of information such as prices

[00:07:32] in various markets. These high intermediation costs make food costly for the consumer and affect

[00:07:37] global competitiveness. Often, it's restrictive policies to blame such as the Essential

[00:07:42] Commodities Act of 1955 designed for an era of shortages. I've spoken already about export

[00:07:48] controls. Look at the other agricultural policies and you'll see that they favor consumers

[00:07:53] over producers by suppressing farmers' prices. However, correcting this isn't uphill task

[00:07:58] politically. No party, however powerful can risk doing that. Digital marketing platforms such as

[00:08:04] the Electronic Unified Agricultural Markets or EM, commodity futures and the Agriculture

[00:08:09] Infrastructure Fund may have their heart in the right place but are hobbled by poor implementation.

[00:08:14] So far it's been private firms like ITC that have shown the way by building efficient value chains.

[00:08:19] ITC's each-or-pal for example, sources more than 3 million tons of factory products from

[00:08:24] 225 districts. These chains feed into ITC's FMCG brands thus benefiting consumers and generating

[00:08:31] better livelihoods for farmers. This farm to plate value chain is a sophisticated one,

[00:08:35] sourcing differentiated, identity preserved, traceable raw materials and empowering farmers with

[00:08:40] best practices and technology thus leading to higher farm incomes. One way of encouraging the

[00:08:46] use of ENAM would be to finance sorting and grading at Mondays. If quality variance is reduced,

[00:08:51] processors will be encouraged to use the platform to buy goods. The lack of cold storage is a

[00:08:56] major problem too. A stumbling block has been the high cost but solar power could be the answer.

[00:09:02] Take for instance onions. Due to the lack of a cold chain, losses have consistently

[00:09:06] clocked 30% to 35%. A cold chain would reduce these losses thus increasing supply and lowering

[00:09:12] retail prices while raising farmer incomes. On the value addition front, focusing on full

[00:09:17] processing will help build value chains. In many South Asian countries about 25% of the total

[00:09:22] agriculture produce gets processed but that number in India is less than 10%.

[00:09:27] Let's look now at nutrition. Any discussion on the food system would be incomplete without it.

[00:09:33] India's agriculture system is founded on the National Food Security Act 2013 that ensures

[00:09:38] availability and affordability of supply for citizens. The public distribution system,

[00:09:42] the world's largest, covers more than 800 million and is an important channel through which food is

[00:09:47] delivered to the poor. For the government is the food corporation of India that procures and stores

[00:09:52] grain that is eventually distributed. While the country produces more than enough to feed itself,

[00:09:57] its access to nutrition diets that remains a challenge. One manifestation of this is the

[00:10:02] high rate of stunting among Indian children. According to the National Family Health Survey 4,

[00:10:06] 2015-16, 35.8% of children below 5 years of age are underweight 38.4% are stunted and 21% are wasted.

[00:10:17] All of this underscores the need for putting nutrition first.

[00:10:20] It is usually assumed that as food production rises, so do nutrition levels but this is not

[00:10:25] necessarily true as we've seen. Over the past 5 decades, production of food grain in India

[00:10:29] rose 6 fold from 51 million tons in 1951 to 296.67 million tons in 2019-20. Despite this,

[00:10:38] India has a high level of malnutrition. Experts suggest that agricultural programs be made

[00:10:43] more nutrition sensitive. Working with schools to promote sustainable kitchen gardens and use them

[00:10:48] to provide nutritious midday meals to students could be one way of doing that. Biofortification

[00:10:53] of staples is a cost effective technological innovation for improving diets. In India, the Harvest

[00:10:58] Plus program is working with the Indian Council of Agricultural Research to grow new varieties of

[00:11:02] nutrient rich staples such as zinc, bio fortified rice and wheat and iron, bio fortified beans.

[00:11:08] Another 17 bio fortified varieties of wheat crops and some nutrient cereals have had the

[00:11:13] production stepped up. These can be integrated with midday meals for elementary school children.

[00:11:18] Women of reproductive age need similar support. To achieve all this, part of the food subsidy

[00:11:23] could be diverted from wheat and rice to nutritious crops but there are other factors leading

[00:11:27] to malnutrition. The government must effectively enable women's education through scholarships,

[00:11:32] sanitation facilities for girls in schools, safe drinking water and nutritious food.

[00:11:37] The Swachhibharat Abhiyan sought to eliminate open defecation and bring about behavioral changes

[00:11:41] in hygiene and sanitation practices. However, it too has suffered from poor implementation.

[00:11:46] Thus, fundamental reforms in the food system are absolutely critical at this time if we are

[00:11:51] to achieve food security for a vast population, lower food costs through a better agricultural

[00:11:56] marketing system and offer quality nutrition at affordable prices. Without it, a healthy India,

[00:12:02] prosperous farmers and environmental sustainability will all remain a pipe dream.

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