How PDS can be made Effective through Better Governance

India’s public distribution system (PDS) is the largest food security programme in the world, which covers nearly 60% of the population and costs Rs 1.45 trillion—close to 1.4% of the national income. PDS has often been criticised for its structure, incessant corruption and leakages, and inclusion and exclusion errors in identifying the beneficiaries. The rolling out of the National Food Security Act (NFSA), 2013, and the overhauling of PDS in some states has created an aspiration that the system can be made effectual in making the households not only food secure, but also nutrition secure.

Among the states, Odisha, Tamil Nadu, Rajasthan, Chhattisgarh, Madhya Pradesh, Telangana and Gujarat have intensified reforms in PDS using latest technology and ensuring community participation—they have taken steps such as computerisation of offtake of grains, recording of procurement, storage and distribution, installation of electronic point of sale machines in fair price shops, and regular monitoring at every stage. The digitisation of beneficiaries’ database and verification of their identities through Aadhaar have resulted in scraping of over 23 million fake ration cards and savings of Rs 14,000 crore of annual food subsidy.

Amid serious discussions on replacing the in-kind transfers with cash transfers, with pilots carried out in Chandigarh, Pondicherry, and Dadra and Nagar Haveli, it appears difficult to let go of PDS, at least in the short run. The political sensitivities, complexity in dismantling the massive system built over time, and inadequate infrastructure to transfer money to beneficiaries may act as barriers. Whether a revamped PDS, undoubtedly backed by strong political will and good governance, would pay off across the country is yet to be seen. We gauge its possibility by looking at the stellar performance of PDS in Odisha—a state marred with high incidence of poverty, hunger and malnutrition.

 

Odisha began with a state-of-the-art e-PDS from 2004 onwards to cover the entire network for greater transparency and accountability. PDS coverage in terms of population was expanded, grain prices were lowered, and entitlements were simplified and rationalised. The outlets were largely brought under the ambit of community, presently managed by gram panchayats, self-help groups (SHGs), cooperatives and non-governmental organisations, which ensured participatory management and transparency in administration. The entire distribution system was computerised and vans were mobilised to reach distant places that were otherwise disconnected from the mainstream distribution network. The movement of food grains from the warehouses to fair prices shops was monitored and tracked with GPS systems. The weighing scales were digitised, transport agencies were separated from distribution agencies and fixed distribution schedules were introduced. In fact, the overall system was strengthened with provisions for a grievance redressal mechanism.

A remarkable turnaround was visible in due course in terms of better coverage of eligible beneficiaries from 6.4% in 1993-94 to more than 58% in 2011-12, along with minimal targeting errors and plugging grain leakages. Some more statistics from the NSS showed an increase in the contribution of PDS grains in calorie intake from less than 2.4% to over 19.5% during this period, with larger benefits accruing to the rural households (21.3%). The consumption of cereals among weaker sections increased at a much faster rate than that for other privileged social groups. The estimates reveal that PDS contributed 34%, 32% and 26% of cereal consumption of SC, ST and OBC households, respectively, compared to 19% of general caste households. An increased access to subsidised cereals led to a decline in the share of cereal expenditure in total expenditure, which could be used for purchase of other commodities.

The incidence of calorie deficiencies in 2011-12 would have been 48.9% in a business-as-usual scenario, but the turnaround has been able to contain it to 17.2%. In absolute terms, nearly 14 million people could escape the curse of hunger due to revamped PDS. This translates to 31.7% reduction in calorie-deficient population in the state.

Perhaps an increasing divergence between market price and PDS price of grains made the latter more lucrative. The growing price advantage pushed the households to claim their eligibility which created demand-side pressures on the system to function better. The estimated grain leakages were capped to 11.4 % in 2011-12 from a staggering 85.8% in 1993-94 and 73.4% in 2004-05.

The functioning of PDS can be improved further. Firstly, nearly 16% of the below poverty line households were non-beneficiaries as they did not possess ration cards. Such unintended omissions could be minimised by strengthening the identification mechanism. Second, the density of fair price shops is still lower compared to many other states and efforts are needed to widen the distribution network to remote corners to enhance access.

Thirdly, there is still room for minimising wastage and losses resulting from poor handling and storage of grains. Continued research and improvements in logistics throughout the distribution chain is imperative. Lastly, appropriate choice of food including biofortified food, if distributed, can help in addressing recalcitrant micronutrient deficiencies such as vitamin A and anaemia.

The Cabinet has approved the setting up of the National Nutrition Mission (NNM) with a budgetary allocation of `9,046.17 crore for the next three years. NNM will cover all the districts in three years beginning with 315 high-burden districts. The aim is to reduce stunting by 2% annually, anaemia in young children, women and adolescent girls by 3%, and undernutrition and low birth weight among 100 million people.

Since each state has invested heavily in PDS and revamping is already under way, it would be cost-effective to make it as a platform to achieve some of the proposed goals under NNM. The respective states can provide necessary nutrients such as pulses and millets to women along with grains and possibly promote dietary diversification as per the culture, tastes and preferences of people. The ministry of women and child development has advocated bringing convergence with other ministries for the success of this mission. Clearly, PDS can play a pivotal role in bringing convergence and making India’s two important missions—food and nutrition security—successful in a short time.

Anjani Kumar and Seema Bathla are agricultural economists with the International Food Policy Research Institute and Jawaharlal Nehru University, New Delhi. This article was originally published in Financial Express

Workshop on “Green Revolution in Eastern India: Constraints, Opportunities and Way Forward”

Workshop in New Delhi

Eastern region of India, comprising Bihar, Chhattisgarh, Eastern Uttar Pradesh, Jharkhand, Odisha and West Bengal, accounts for more than 50 percent of nation’s food insecure and poor population. These states could not reap the benefits of Green Revolution which was exceedingly successful in accelerating agricultural production and productivity and reducing rural poverty levels. While the nation takes pride in achieving food self-sufficiency with a record production of 273 million tons and reducing the incidence of poverty from 53 percent in 1977/78 to 21.4 percent in 2011/12, the reality is that the eastern states are quite a distance away from reaching the average national agriculture productivity levels and in mitigating poverty and hunger.

As these states were largely bypassed from the High Yielding Varieties (HYV) seeds and other such technologies and continue to have poor agriculture productivity levels, the Government has embarked upon a major mission, popularly known as BGREI-Bringing Green Revolution to Eastern India. The main focus of this bold initiative has been to augment land productivity as agriculture is the main source of livelihood and employment for majority of rural population in the region.

To understand how this important initiative of the government can be taken forward, the Indian Council for Agricultural Research (ICAR), International Food Policy Research Institute (IFPRI) and the Tata Cornell Institute for Agriculture and Nutrition (TCI) jointly organised a national conference during October 9-10, 2017. The conference was attended 150 delegates. Eminent economists, agricultural scientists and policy makers shared their views on macro as well as micro issues that have been holding back agricultural growth in the Eastern states. The participants deliberated upon several aspects viz. technological, land use, institutional, climate change and risk, investments, food security and migration to find appropriate strategies that would help the Eastern states in unleashing their potential.

Dr Harsh Kumar Bhanwala, Chairman, National Bank for Agriculture and Rural Development (NABARD), attributed low agricultural productivity in the eastern region to small size of land holdings and inadequate rural infrastructure. He laid emphasis on diversification of agriculture by the small farmers to harness the opportunities in horticulture and fisheries activities and income gains. He suggested formation of Farmer Producer Organizations (FPOs) or Aggregators who can provide easy market access to farmers for their produce.

Dr Trilochan Mohapatra, Secretary, Department of Agricultural Research Education (DARE) and Director General, ICAR, highlighted a strong need to bring convergence in policies and efforts from planning to implementation which can help in bringing green revolution in the eastern region. An increased spending on agriculture Research and Development (R&D) and improving extension services can go a long way in increasing crop productivity.

Dr P K Joshi, Director IFPRI-South Asia, IFPRI reiterated that India’s eastern region suffers from natural calamities and is largely rainfed. However, it offers numerous opportunities like utilization of rice fallows, cultivation of non-food crops including fruits-vegetables, and their value addition in processing industry. To harness these opportunities, it is important that these states bridge the yield gaps and have climate smart agriculture. He also emphasised to treat agriculture as an agri-business profession whereby entrepreneurship should be promoted among the farmers. In doing so, business models that are best suited for this region should be explored with adequate financial support by the lending agencies and banks.

The conference concluded with some key recommendations-

  • Technological development is critical for accelerated and sustainable agricultural development in the region. Special focus need to be given on adoption of improved seed varieties, System of Rice Intensification (SRI), farm mechanization and conservation agriculture.
  • Reforms are needed in inputs delivery chain (seed, fertilizer etc) and promotion of rental markets (farm machinery, irrigation, land) to ensure optimal land and water use.
  • Institutional reforms are required in improving agricultural marketing, financing, insurance and formation of FPOs/cooperatives.
  • Increase in infrastructural investment by the government in areas such as irrigation, cold chain, reefer vans and other logistics, roads and other transport mechanisms for high value perishable commodities is the need of the hour.

Presentations

Flickr

Op-ed article

Why eastern India needs a Green Revolution

Women Farmers in field, Nalanda District, Bihar. Source: (flickr) Divya Pandey, IFPRI

Eastern India is waiting for Green Revolution to improve food security and reduce poverty. A large fraction of the population in this part of the country is dependent on agriculture for food and livelihood security. The region is home to the highest density of rural poor in the world and poverty is high among agricultural laborers and sub-marginal farmers cultivating less than 0.5 ha land. Despite several government efforts in the past, eastern India still lags when it comes to agricultural development. Though the region has the best of soils in the country and an abundance of water, sunshine and labor, agricultural performance is appears to be of subsistence level only.

The majority of farming families in this region are poor; increasing their net returns from agriculture is essential to reduce poverty. However, the returns from agriculture are significantly lesser in eastern India compared to, say, the north-western states. For example, average net returns from paddy are 5-7 times lower in Bihar than that in Haryana and Punjab. The crop yields are low and almost stagnating in eastern India compared to the north-western and other parts of the country. For example, average yield of rice is around 2-2.5 tons/ha in Bihar (and similar in other states) compared to 5 tons/ha in Haryana and 6 tons/ha in Punjab. In the case of wheat, the yield is around 2.5 tons/ha in Bihar—significantly below the national average and much below the yield levels in Punjab and Haryana (4.5-5 tons/ha).

High population pressure on land, combined with relatively low crop-yields, results in lower average per capita income for farm households in the region. The average annual farm incomes in eastern states are also nearly half of the national average. The region is also highly vulnerable to climate change and thus suffers from high inter-year crop yield variability, making agriculture more vulnerable to climate extremes such as droughts and floods. For example, during 2009, a drought year, paddy yields in Bihar dropped by nearly 15% compared to normal year yields, leading to serious social and economic impacts. A similar situation played out in other eastern states, too; however, in north-western states like Haryana and Punjab, the yields were similar to that in normal years. Therefore, the major policy challenge is to promote sustainable intensification of agriculture to make agriculture more profitable and resilient to climate change.

IFPRI conducted some surveys in major states of India to map the adoption of improved varieties of crops and new technologies. Surveys from the eastern states show that most farmers there continue to use 25-30 years-old seed varieties with low yield potential and high susceptibility to biotic and abiotic stresses. Further there is negligible adoption of conservation agriculture (CA) technologies (zero tillage, laser land leveller, etc). In contrast, Punjab and Haryana are adopting the latest varieties and technologies. Non-availability and lack of knowledge are reported to be the important constraints in adopting modern varieties and technologies. Lack of a legal framework for land leasing was also stated to be a constraint in adopting the latest technologies and committing investment to development of farm assets. Global experiences reveal that legalised land leasing improves efficiency and reduces poverty.

Despite all constraints, in recent years, agriculture in eastern India has begun to transform, but the pace needs to be accelerated by reforming policies, institutions, and markets and by developing agri-infrastructure. Diversification of agriculture in eastern India towards high-value produce is the next step forward to increase farmer’s income. There is enormous scope for dairy, horticulture and fisheries in eastern India. An integrated-farming-system approach can generate additional incomes for farmers along with higher crop and water productivity. Research shows integrated farming system is the most reliable way of obtaining high incomes to the farmers. It would need investment in developing physical and financial infrastructure such as agro-processing, rural warehouses, cold storages, cold chains, and financing institutions.

Market availability is yet another factor to consider. In the absence of suitable marketing facilities in the region, most farmers sell their surplus at non-remunerative prices soon after harvests. In addition, marketing and the ability to negotiate a good price for produce is severely constrained. Therefore, adequate facilities need to be created in rural areas through public–private partnership to provide price advantage, reduce transaction costs and give access to efficient input- and output-markets. The region also has experienced low investment in agriculture development, especially on land, water, markets and extension services in comparison to other parts of India. IFPRI research shows that encouraging private investment in irrigation development will trigger agricultural growth in the region.

The success of all efforts will rely on how farmers are consolidated through self-help groups or farmer-producer organisations or cooperatives to take advantage of economies-of-scale.

Finally, a comprehensive approach by integrating technologies, policies, institutions and agri-infrastructure is necessary to usher in a new green revolution, in eastern India this time.

This piece was originally published in Financial Express.

 

Green Revolution in Eastern India: Constraints, Opportunities and Way Forward

Call for Abstracts

Puri District, Odisha, Oct 2012 Source: Vartika Singh, IFPRI

You will agree with me that the eastern region of India, comprising Bihar, Chhattisgarh, Eastern UP, Jharkhand, Odisha and West Bengal is lagging in agriculture and is home to more than 50 percent of India’s poor and food insecure population. More than three fourths of poor in the region lives in rural areas. India’s success in reducing rural poverty from 53 percent in 1977/78 to 21.4 percent in 2011/12 is attributed mainly to the green revolution. However, the eastern region was by passed from the benefits of green revolution and the increasing concentration of the rural poor in this region is a reality. The persistence of high poverty and food insecurity has a serious economic, social and political implications.

Agriculture in eastern region of India is slowly transforming, but the pace needs to be accelerated by reforming policies, institutions, and markets and by developing agri-infrastructure. Several initiatives such as “Bringing Green Revolution to Eastern India (BGREI)” have been launched to push green revolution for accelerated agricultural growth in this region. However, the region is struggling to ensure sustainable high agricultural growth and continues to linger in a vicious circle of low input – low output syndrome. To overcome the challenges and unleash the opportunities, a critical understanding of the constraints which are impeding the real take off, of green revolution in eastern India needs to be thoroughly analyzed and understood.

To address these issues, we are organising a conference on “Green Revolution in Eastern India: Constraints, Opportunities and Way Forward” on Oct 09-10, 2017 at NASC, Pusa, New Delhi, India. The conference is jointly organized by the International Food Policy Research Institute (IFPRI) and Tata Cornell Institute for Agriculture and Nutrition (TCI).  The conference is expected to evolve a “road map” with clear prioritization and strategies for accelerated and sustainable agricultural growth in eastern India.

We are inviting contributions from you and your colleagues for presentation in this conference. We shall appreciate if you and your colleagues submit a brief abstract of about 500 words for including in the conference by September 7, 2017 in the following broad areas:

  1. Constraints in Production System
  • Agricultural performance in Eastern India vs Western India
  • Land ownership and tenurial arrangements
  • Investment and subsidies
  • Agricultural risks
  1. Technology Adoption and Constraints
  • Adoption of improved varieties
  • Adoption of conservation technologies
  • Farm mechanization 
  1. Institutions and their Effectiveness
  • Irrigation and water markets
  • Financing agriculture
  • Agricultural markets
  • Farmer Producer Organizations
  1. Opportunities in Eastern India
  • Bridge yield gaps
  • Potential of agricultural diversification
  • Potential of rice-fallow utilization
  • Opportunities for agro-processing
  1. Role of Private Sector
  • Climate smart agriculture
  • Solar power for irrigation
  • Reform to promote agri-business

You can send your abstract to Vaishali Dassani (v.dassani@cgiar.org). Please send complete details, including the topic under which your abstract falls and the corresponding address.

Concept Note

 

Technologies for Maize, Wheat, Rice and Pulses in Marginal Districts of Bihar and Odisha

Farmer in the field at Nalanda District, Bihar. Source: (Flickr) Divya Pandey, IFPRI
Farmer in the field at Nalanda District, Bihar. Source: (Flickr) Divya Pandey, IFPRI

Despite rich in natural resources such as water, fertile soil, mineral reserves and sun,  Bihar and Odisha have not been able to capitalize upon their vast resources due lack of infrastructure (like roads, power and markets), concentration of the poor population with high density in most parts, weak institutions (such as credit, insurance, education and extension) and weak governance.

A recent chapter on Technologies for Maize, Wheat, Rice and Pulses in Marginal Districts of Bihar and Odisha summarizes the current state of agricultural productivity and the potential of different technologies in two of the most economically backward states in Bihar and Odisha, India for their principal crops, rice, wheat, maize and pulses. Focusing on marginal districts in the two states, the chapter assesses the suitability of different technologies to uplift the areas (districts) out of their current low level equilibrium (in terms of production performance) and thereby raise the standards of living.

The authors identify the marginal (backward) districts for these crops based on current yield and its performance over time. Subsequently, the choice of technologies for marginal areas for each case is analyzed ex ante. In this approach, the potential is assessed under conditions in which a given technology might not be widely adopted currently but has a comparatively high potential to deliver upon adoption.

The short listing of technologies for these crops has been done based on a clearing house approach in which, in consultation with different stakeholders, the potent technologies for districts have been chosen.

The identified technologies for

Rice: Varietal substitution towards (climatic) stress-tolerant, high-yielding varieties; Mechanized Direct Seeded Rice (DSR) technology; mechanization of agriculture promoted by custom hiring centers - specific promotion of the self-propelled paddy trans-planter machine; and use of integrated nutrient management, involving use of both organic and inorganic fertilizers.

Maize: Hybrid seed (particularly high yielding single cross hybrid seed).

Wheat: Surface seeding technique for rice-wheat systems; Zero tillage wheat with Resource Conserving Technologies (RCTs); and Laser land leveling (LLL).

Pulses: Stress-tolerant high-yielding varieties; inter-cropping of pulses with other crops; and technologies such as line sowing/seed drilling/zero tilling.

Following this, through a structured survey of the households, the reasons behind slow or poor adoption of available technological innovations were examined. The profile of the identified technologies in terms of their uptake over time is looked at, besides assessing the role of complementary inputs that affect the feasibility for the respective areas, as well as the prospects for adopters of technology to multiply. The real opportunities and constraints for technology adoption are gauged directly from the farmers, including their aspirations about crop choices and the technologies that exist to grow them. It was found that maize and pulses are the crops that farmers currently aspire to get into.

It was found that in both states, there is generally a significant lack of awareness of agricultural technology, more so in marginal districts of Odisha. Some modern technologies, like hybrid rice in Bihar, have become quite well known to the farmers, while others, like Systems of Rice Intensification, in spite of having existed for quite some time, have not yet broken the information barriers.

Authors highlight that farmers and farmers belonging to the lowest caste fare badly, both in awareness as well as adoption of technologies. Translation from awareness to adoption has been quite difficult for most technologies.

In general, the technologies related to varietal adoption have been comparatively successful in this regard. In many others, as they get more complex and there is a greater need for complementary inputs, adoption of certain technologies, even in the presence of awareness, has been difficult.

The chapter highlights that policies for technology promotion in the marginal districts have to take into account the current state, as well the aspirations, of the farmers. These aspirations relate both to the crops/activities that farmers want to engage in as well as different technologies that they want to adopt but cannot because of constraints.

Given the evidence of the disconnect between awareness and execution, a holistic approach taking into account the whole process of adoption from information to support in adoption will be needed. The state of the farmers dealing with illiteracy, small land sizes and social barriers mandate a tailored approach in technology choice for the lagging districts in Bihar and Odisha.

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