Food Security and International Relations

B. Open Market Sale of Public Food Stock

Driven by the logic of fiscal consolidation and expenditure compression, India’s reasonably well-functioning Universal Public Distribution System (PDS) was converted to a Targeted Public Distribution System (TPDS) in 1997; incidently it also resulted in exclusion of a large number of eligible households from getting cheaper food grains and making them vulnerable for food security (Swaminathan and Mishra, 2001; Swaminathan, 2008). As shown in table 2, an important reason explaining the difference between availability and consumption of food grains is rising food stock with the government, which was obviously connected with universal PDS to TPDS.

Figure 3: Stock of Food Grains in the Central Pool, January 1991–2020 (Million Tonnes)

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Source: Directorate of Economics and Statistics and Department of Food and Public Distribution, Government of India

Figure 3 provides the estimates of major food grains stocks in the central pool (i.e. with the government of India) between 1991 and 2020, As it is clear from the figure that the stock of food grains was rising in the central pool even before 1996, but after 1998 there was a sharp rise in the food grain stock. Between 2004 and 2008, under the United Progressive Alliance (UPA)-I government, in which Left Parties of India had a significant say, the food stock declined. After 2008, the stock of food in the central pool further increased until 2013. In 2013, the Government of India under UPA-II enacted National Food Security Act (NFSA), which guarantees subsidised food to the three-fourth of the rural population and half of the urban population (GoI, 2013a). The NFSA played an important role in increasing the base and reach of food grain distribution under TPDS. However, the incumbent regime led by the Bhartiya Janata Party (BJP) after 2014 made some changes in the architecture of NFSA as well as norms6 of provisioning; these had an adverse impact on PDS system, leading to a decline in the distribution of food grains and build-up of stocks again. June stocks7 for the last four years from 2017, were 55.5, 68.1, 74.3, and 83.5 million tonnes respectively. Such huge stocks are completely illogical and avoidable when experts agree that 20–30 million tonnes are adequate as buffer norms for any contingency. Except for adherence to the bizarre philosophy of neoliberalism, there is no reason why the government should persist with such levels of “excess supply” which end up depriving millions of poor, hungry from access to food.

Figure 4: Sale of Wheat and Rice under the Open Market Sale Scheme (Domestic/Export from Central Pool) (Thousand Tonnes)

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Source: Department of Food and Public Distribution and various years’ Economic Survey of India

Now we move to the policy of Open Market Sales Scheme (OMSS) which the Government of India had adopted for wheat in 1993 and for rice in 1994 (GoI, 2005); the relevant figures for sale under the scheme are presented in Figure 4. The scheme makes provision for sale of wheat and rice under the central pool, that is, out of food grains procured by the public agencies. The Food Corporation of India (FCI) sells food grains in bulk to private traders through tenders. The policy makers had rightly argued that keeping high stock in the central pool has a substantial economic cost, and hence it was prudent to offload part of it through open markets (domestic as well as export). Of course, the question arise: why not provision for higher levels of distribution through PDS to the needy population instead of opting for open market sales? Obvious answer lies in the logic of neoliberal framework.

As it happens, the OMSS resulted in the Wheat Crisis in 2006, when in April of that year (which is a month of wheat procurement), the stock of wheat in the central pool fell short of the buffer norm by 100 thousand tonnes (Aspects of Indian Economy, 2006); this forced the government to import wheat in that year. It was under United Progressive Alliance-I, which was a front led by the Congress and supported by the Left parties among others, that the OMSS was entirely stopped between 2004 and 2009; unfortunately, it again got a new lease of life subsequently. The trends for the OMSS during the last two decades are clearly evident from Figure 4.

C. Unemployment and Migration of Workers

The neoliberal model of economic development has created huge challenges for labour absorption in the country thus aggravating the pool of labour reserves. This again has many dimensions and multiple correlates. Many of these are connected with accelerated primitive accumulation, vis-à-vis the petty production, peasant agriculture and a whole host of activities broadly subsumed under informal production, who were earlier protected to a certain extent from the big capital (both foreign and domestic) under Nehruvian Socialism (dirigiste regimes) (Patnaik and Patnaik, 2019).

On the challenges of labour absorption in contemporary India, as we have argued earlier, there is “overwhelming dependence on agriculture which accounts for close to 50% of the total workforce. Significantly, as per the recent estimates, agriculture contributes only approximately one-sixth of the GDP of the country. This overcrowding of the workforce in agriculture and its ‘underemployment’ is structured by a high presence of wage labour and a declining number of people who report themselves as ‘cultivators’. As regards the non-agricultural sector, its single most important feature (quite like agriculture) is the extremely high proportion of vulnerable informal employment. Though the non-agricultural sector accounts for about half the work force, it contributes approximately 80% to the total GDP, with a very small segment of less than 10% of workers, in the organized sector. Of the total employment in the organized sector, almost 65–70 per cent is in the public sector (including public administration and defense services). The unemployment among the youth, in particular among the ‘educated’, is substantially higher than the overall rate of unemployment” (Jha, 2019; pp. 10–11).

One of the significant promises with which neoliberal policies ascended in India was adequate and appropriate employment opportunities to the growing workforce. However, as is clear from Table 4, the overall outcome has gone in the opposite direction.

Table 4: Unemployment rate (%) in India

Source: Reserve Bank of India, Handbook of Statistics of the Indian States and NSS 2019. Periodic Labour Force Survey, 2019.

It is worth noting here that the massive and growing political outcry on the employment front, especially, in rural India during the first and half decades of economic reforms pushed the government to adopt the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2005, which provided some succour to the most vulnerable segments of the rural population, and has been a life line for them. After the General Elections in 2014, the National Democratic Alliance (led) by the BJP formed government at the Centre and has pursued a range of policies which have been, on the whole, disastrous on the employment front as is evident for the figures from Periodic Labour Force Survey 2017–18.

Reasons for poor labour absorption have been analysed in great detail by a large number of scholars working on India; for reasons of space, it is not possible for us to get into a discussion of the relevant issues here and those interested in these may refer to Jha (2016); Patnaik (2016); Patnaik and Patnaik (2019) among others. It also worth noting that the huge swelling of labour reserves in the country has impacted on quality of employment. Table 5 presents the total number of workforce in India in the formal and informal sectors. Apart from a rising number of informal workers, the most worrying fact is—the rise in informal workers in the formal sector, i.e. informalisation of formal sector workers.

Table 5: Distribution of Workers by Type of Employment and Sector

Source: 1. NSS 66th and 68th Rounds of Employment-Unemployment Survey. Computed.

2. The figure for 55th and 61st round are adopted from the Report on Conditions of Work and Promotion of Livelihoods in the Unorganised Sector, 2007. Note: Figures in brackets are percentages.

The informal sector workers (who are deprived of any kind of social security, paid leave etc.) are extremely vulnerable to any sudden economic shock. Further, even for the most protected category of workers (i.e. formal sector workers), there has been a substantial increase in vulnerability, as is evident from the Periodic Labour Force Survey (2017–18) conducted by the NSSO. The Survey indicated that among the regular wage/salaried employees, 69.2 percent in the rural areas and 72.4 percent in the urban areas and a total of 71.1 percent in whole India do not have written job contracts. The same survey also reveals that 56.2 percent in the rural areas and 52.8 percent in the urban areas and 54.2 percent at all India level, regular wage/salaried employees do not have any provision of paid leave; it also notes that, among the regular wage/salaried employees, 52.5 percent in rural areas, 47.7 percent in urban areas and 49.6 percent at all India level do not have any social security benefits.

Increasing challenges of labour absorption have contributed significantly to labour mobility. Unfortunately, there are serious data challenges relating to labour migration, which we are not in a position to pursue here. However, it is quite clear that during the period since the early 1990s, labour mobility in search of work has increased very substantially (Census, 2001, 2011; GoI, 2017; NSSO different rounds, Srivastava, 2020).

Compression of rural development expenditure, reduced access to land, growing landlessness among marginal and small farmers, increased vulnerabilities of peasant production, etc., which have strong organic connections with neoliberal policies, are obvious contributors to growing mobility in search of work; in short, much of labour migration in contemporary India is driven by distress. These ‘footloose’8 workers are constantly moving not only from rural to urban but to rural to rural and urban to rural as well, many of them cot into multitasking and perennial circuits of circular migration.

D. The Rise in Landlessness and Asset Inequality:

One of the major adverse outcomes of overall economic policies in rural India during the neoliberal era has been the rise in landlessness. Of course, there are other factors at work, such as, development and infrastructure projects, urbanisation, etc. which have put pressure on land for agricultural purposes. However, it is quite clear that a whole range of polices unleashed by neoliberalism have dramatically exacerbated the trend towards growing landlessness for at least the bottom half in the rural India and the trends for the recent years have been studied by several scholars (Rawal, 2008, 2013; Patnaik, 2012; Verma, 2015; Verma and Roy, 2019; GoI, 2013b). It is quite clear from the recent studies that more than 40 percent of households in rural India do not have access to cultivable land, (i.e. other than their homestead) (Rawal, 2008; GoI, 2009; Verma and Roy, 2019).

Table 6: Number of operational holdings and rural households in India (in Million)

Source: Agricultural Census, 1990–91 2000–01, 2010–11 and Census of India 1991, 2001, Socio-economic Caste Census, 2011.

Table 6 provides information on the number of operational holding and the total number of rural households in India. According to the official definition, “operational holdings include all lands which are used wholly or partly for agricultural production and is operated as one technical unit by one person alone or with household members without regard to the title, legal form, size or location” (GoI, 2019; pp 6). It is clear from the above table that access to land by rural households has drastically decreased in the period under consideration.

A study on asset inequality in India (Sarma et al., 2017), based on the All India Debt and Investment Survey (1991–92 (48th Round), 2002–03 (59th Round) and 2012–13 (70th Round)) shows the rise in asset inequality in rural and urban India. Decile-wise percentage asset holdings are given in Table 7. It shows that the assets held by the bottom 60 per cent in both the rural and urban areas have declined in the period from 1991–92 to 2012–13. Also, the assets held by the middle 35 per cent have declined. The top 5 per cent have witnessed an increase in their asset holdings both in rural and urban areas.

Table 7: Percent Share of Assets Held by Asset Deciles

Source: Sarma et al., 2017

The inequality in land and other assets holdings is sharper if the data is further disaggregated by social categories (Sarma et al., 2017; Verma and Roy, 2019). It means that the Scheduled Tribes, Scheduled Castes and the other backward classes, who are historically vulnerable with respect to assets, especially, land and are thus more vulnerable to food insecurity.