Agriculture and Food Security

1. Agriculture and Food Security PV Srinivasan IGIDR

2. Outline • What are India’s achievements in food security? (facts and figures: aggregate and micro) • How does agriculture affect food security? • Role of policies and institutions • Interactions between policies and roles of agriculture

3. Food security at the national level • aggregate food availability and stability • Cereal consumption • Food prices • Dependence on imports • Availability of nutrients • Stability in nutrient availability

11. Stability in the availability of nutrients

12. Food security at the household level • Trends in poverty • Distribution and concentration of poverty • Calorie consumption trends • Sources of calories

15. self employed- non agriculture agricultural labor other labor self employed- agriculture .997982 .000016 45 1499 temp Cumulative distribution functions for MPCE- all

20. How does Agriculture affect food security? • What are the main channels through which agriculture affects food security? • Pecuniary externalities • Non pecuniary externalities

21. Pecuniary externalities • economic access through employment and income generation • productivity increase leading to lower prices and higher wages • increased demand for non-agriculture products leading to greater employment in non- farm activities in rural and urban areas

22. Non pecuniary externalities • Increased stability • Reduced inequalities • Better nutrition, reduced decease burden and greater productivity

23. Is self-sufficiency important? • provides insurance against unexpected external events • Is self sufficiency associated with greater consumption stability? • Are food deficit regions calorie deficient?

26. Does source of income matter for consumption behavior?

27. Budget shares on Cereals

28. Budget shares on Milk and Milk products

29. Budget shares on Vegetables and fruits

30. Budget share on all food items

31. Does source of income matter? Are the responses of consumption to income changes different? • Regression analysis Dependent variable: • Calorie intake or per capita cons expenditure Independent variables: • employed in agriculture/ non agriculture • household income • household size • other relevant socio-economic factors and community-level variables

33. Income elasticity of calories

35. Role of policies and institutions • Price support and price stabilization policies • Social safety net policies: PDS, EGS, ICDS etc • Input subsidies • Public investment • Self help groups and user associations

36. Policies that diminish the importance of self-sufficiency • Policies that promote domestic and external trade through reduced transaction costs and transport costs (lead to reduction in the price-spread between surplus and deficit regions) • strengthen the PDS in deficit regions by providing higher and better targeted subsidies • Lesser dependence on buffer stocks, use of variable levies and greater role for markets in managing risk- commodity futures

37. Policies enhancing positive externalities • Investment in Ag research for poor areas and farmers and natural resource management • Rationalize regressive input subsidies and increase public investment in poor areas • new institutional mechanisms for effective cost recovery and rational use of inputs (irrigation water and power) • Decentralized efforts and better institutional mechanisms to reduce leakages, improve targeting in PDS, JSGY, and EGS etc.

38. Summing up • Need to take a broader perspective • Not just availability and stability in the aggregate • Focus on economic access and cons stability • Not just cereal security – diversified diet • Nutrition security • Not just calorie intake- micro nutrients important • Focus on malnourishment not just under nourishment

39. Summing up • Agriculture is important for food security • Need for policy intervention • Buffer stocks, price stab, PDS, EGS, other safety nets • Public investment and ag research and extn should address needs of poor and marginal areas • Self sufficiency important for strategic reasons, livelihood, presence of weak redistributive mechanisms • Greater cons stability, leads to better nutrition intakes

40. Summing up • Source of income not important • Differences in elasticities across hh types small • But poor have higher calorie-income elasticities • Need to increase their purchasing power • Need to adopt policies that enhance positive externalities

41. The End Thank You!