Food security and public distribution system

Food security and public distribution system

1. Seminar Food Security and Public Distribution System (PDS ) in india Seminar incharge Dr. S.S. burark Presented By SHIVALIKA sood Department of agriculture Economics &management

2. Indian Agriculture Sector Agriculture is the backbone of the Indian economy. Around 58% population of India depends on Agriculture. Produces 51 major Crops. India ranks third worldwide in farm output . India is the second largest fruit producer in the world .

3. Second largest producer of wheat, paddy , sugar , cotton. Agriculture accounts for 10% of the total exports earning and provide raw material to a large number of industries and is 4 th largest exported principal commodity. India ranks among world’s 5 largest producers of over 80% of agriculture commodity viz coffee , cotton, livestock and poultry meat.

4. India’s population is 1.34 billion .( sep 12, 2016) India’s food grain production 252.23 million tonnes .(ministry of agriculture) India achieved national food self -sufficiency 35 years ago, Yet about 35% of its population remains food insecure. Low incomes and high food prices prevent individual food security. Another aspect of India’s food insecurity situation is that even after over four decades of operation, Public Distribution System (PDS) meets less than 10% of consumption of grains by the poor.

5. Mile Stones in Agricultural Development Special programmes were undertaken to improve food and cash crops supply Grow more food campaign (1940). Integrated production programmes (1950) focused on food and cash crops. Five year plans of India- oriented towards agriculture development. Land reclamation, land development, mechanization, electrification, use of fertilizers, chemicals. Green revolution(1966). Yellow revolution (1986-1990). Operation Flood(1970-1996). Blue revolution (1973-2002).

6. Year Food production 1950-51 50.8mt 1960-61 82mt 1970-71 108.4mt 1980-81 129.6mt 1990-91 176.4mt 2000-01 196.8mt 2011-12 259mt 2012-13 255mt 2013-14 265.57mt 2014-15 252.02mt 2015-16* 252.23 mt India’s food grain (rice, wheat, coarse grains and pulses) production. Source: Ministry of Agriculture, India * 3 rd advanced estimates

7. Year Rice Wheat Other cereals Pulses Total food grains Increase per year 2000-01 84.98 69.68 31.07 11.08 196.81 - 2001-02 93.34 72.77 33.37 13.37 212.85 8.1 2002-03 71.82 65.76 26.06 11.13 174.77 -17.8 2003-04 88.53 72.16 37.59 14.91 213.19 21.98 2004-05 83.13 68.64 33.46 13.13 198.36 -6.95 2005-06 91.79 69.35 34.08 13.38 208.60 5.2 2006-07 93.36 75.81 33.91 14.20 217.28 4.2 2007-08 96.69 78.57 40.76 14.76 230.78 6.2 2008-09 99.18 80.68 40.04 14.57 234.47 1.6 2009-10 89.09 80.80 33.56 14.66 218.11 -7.0 2010-11 95.98 86.87 43.4 18.24 244.49 12.2 2011-12 105.30 94.88 42.02 17.09 259.29 6.1 2012-13 104.40 92.46 40.05 18.45 255.36 -1.5 2013-14 106.65 95.85 43.29 19.78 265.57 3.99 2014-15 105.48 86.53 42.86 17.15 252.02 -5.10 2015-16* 104.32 93.50 37.94 16.47 252.23 0.08 Food grain production in India (million tones) Source: agricultural ministry of India *3 rd advanced estimates

8. Food Security : According to FAO (Food security) All people at all time have both physical and economic access to the basic food they need . WORLD BANK DEFINITION (1986): “ Access by all people at all times to enough food for an active, healthy life. Its essential elements are the availability of food and the ability to acquire it” The World Food Summit of 1996 food security exists “when all people, at all times have physical, social, economic access to sufficient, safe and nutritious food to maintain a healthy and active life”.

9. Food Security ensured in the country only if Enough food is available for all the persons.( Food Availability) There is no barrier on access to food (FOOD ACCESS) All persons have the capacity to buy food of acceptable quality(FOOD Utilization) Food security is a complex sustainable development issue . Food Security Food Access Food Utilization Food Availability

10. Food Insecurity A situation that exists when people lack secure access to sufficient amounts of safe and nutritious food for normal growth and development and an active and healthy life (FAO). Refers to lack of food access based on financial and other material resources Food insecurity is a household situation, not an individual situation and affects everyone in a household, it may affect them differently.

11. Results Of food insecurity

12. 15.2% of our population is undernourished 30.7% of children under 5 are underweigh t 58% of children stunted by 2 years of age According to GHI report 2014 India ranks 55 th out of 76 countries followed by Pakistan (57th ). Facts About Hunger In India Source: www.indiafoodbanking.org

13. Global Hunger Index Score Countries Undernourished population Underweight children under 5 years Under 5 year mortality rate GHI 1999-2000 2010-12 1998-2002 2008-12 2000 2011 2000 2014 Bangladesh 18.4 16.8 45.3 36.8 8.4 4.6 24 19.1 Brazil 12.1 6.9 3.6 3 3.6 1.6 6.4 <5 China 14.4 11.5 7.4 3.4 3.5 1.5 8.4 5.4 India 21.3 17.5 44.4 40.2 8.8 6.1 24.8 17.8 Indonesia 17.8 8.6 23.3 18.6 5.3 3.2 15.5 10.3 Malasiya 2.9 3 16.7 12.7 1.1 0.7 6.9 5.4 Mexico 3.1 2.1 6.0 2.8 2.9 1.6 <5 <5 Nepal 24.5 18 43 29.1 8.3 4.8 25.3 16.4 Pakistan 24 19.9 31.3 30.9 9.5 7.2 21.6 19.1 Russia 4.7 1.7 2.3 1.2 2.1 1.2 <5 <5 South Africa 4.8 2.9 10.1 8.7 7.4 4.7 7.4 <5 Sri Lanka 28.7 24 22.8 21.6 1.9 1.2 17.8 15.1 Source: IFPRI and GHI 2014

14. M ajor States at hunger index and the underlying components State State-wise Hunger Index Score Prevalence of calorie undernourishment (%) Under weight children below 5 years (%) Under 5 mortality rates (deaths per hundred Lives) Indian state hunger index rank Punjab 13.64 11.1 24.6 5.2 1 Kerala 17.66 28.6 22.7 1.6 2 AP 19.54 19.6 32.7 6.3 3 Assam 19.85 14.6 36.4 8.5 4 Haryana 20.1 15.1 39.7 5.2 5 Tamilnadu 20.88 29.1 30 3.5 6 Rajasthan 20.99 14.0 40.4 8.5 7 West Bengal 21.00 18.5 38.5 5.9 8 UP 22.17 14.5 42.3 9.6 9 Maharashtra 22.81 27.0 36.7 4.7 10 Karnataka 23.74 28.1 37.6 5.5 11 Orissa 23.79 21.4 40.9 9.1 12 Gujarat 24.69 23.3 44.7 6.1 13 Chhattisgarh 26.65 23.3 47.6 9.0 14 Bihar 27.30 17.3 56.1 8.5 15 Jharkhand 28.67 19.6 57.1 9.3 16 MP 30.90 23.4 59.8 9.4 17 Sources: Calorie undernourishment & child underweight: IIPS 2007; under-five mortality rate: NSSO 2007 and authors’ calculation

15. Several schemes started to achieve food security are : The Food for Work Programme was started in 1977-78. In September 2001, different programmes were merged into an umbrella programme called SGRY ( Sampoorna Gramin Rozgar Yojana – Comprehensive Rural Employment Scheme) In February 2006, a National Rural Employment Guarantee (NREG) scheme was launched in 200 most backward rural districts under NREG Act passed by the Parliament. Rashtriya Krishi Vikas Yojana with an outlay of Rs. 25000 crore National Food Security Mission with an outlay of about Rs. 6,000 crore .

16. India’s Food Security System Buffer Stock Public Distribution System Food Security system of India

17. Public Distribution System

18. Public Distribution System (PDS) Definition : Public distribution system is a government-sponsored chain of shops (Fair price shops) entrusted with the work of distributing basic food and non-food commodities to the needy sections of the society at very cheap prices. PDS is a national food security system that distributes subsidized food to India’s poor. It means distribution of essential commodities to a large number of people through a network of Fair Price Shops (FPS) on recurring basis.

19. The commodities distributed are as follows: Wheat Rice Sugar Kerosene Iodized salt Pulses Edible Oil etc In India there are about 5.20 lakh Fair price Shops distributing food grains to about 16 crore families spending more than Rs.30,000 crore. Each shop covers about 2000 people. PDS in India perhaps the largest distribution network of its type in the world.

20. PDS Evolution in India At the time of world war II British government introduced the first structured public distribution of cereals in India through the rationing system in Bombay and Calcutta . In 1943 India abolished the rationing system. After independence in 1950 due to inflationary pressure in the economy, India reintroduced rationing . Due to the ineffectiveness of Rationing System to reach the poor.

21. Revamped Public distribution System (RPDS) was launched on Jan 1 1992 and made effective from June 1, 1992, in selected blocks (1775 blocks) . In June, 1997 , Targeted Public distribution system (TPDS) was launched. To target the needy people and provide them an assured supply of food grains. In TPDS the main aim was to target the “poor in all areas”. The distribution of food grains operated under two tier system of delivery to households Below poverty line (BPL) Above poverty line (APL) Contd……

22. National Food Security Act, 2013 with the objective to provide for food and nutritional security in human life by ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity. The Act provides for coverage of upto 75% of the rural population and upto 50% of the urban population for receiving subsidized food grains under Targeted Public Distribution System ( TPDS). Other welfare schemes Mid day meal scheme , wheat based nutrition programmes, scheme for supply of food grains to SC/ST/OBC Hostel, Annapurna Scheme, Emergency Feeding Programme , Village Grain Scheme. In December 2000, Antyodaya Anna Yojana

23. How Public Distribution works: Farmers or Producers Fair Price Shops FCI (Maintains Buffer Stocks) States MSP Distributes Grains Allocates Grains Central Issue Price Grains Consumer

24. Procurement of Rice and Wheat ( Lakh MT ) Year Wheat Procured Rice Procured 2001-2002 206.30 221.28 2002-2003 190.26 164.22 2003-2004 158.01 228.81 2004-2005 167.96 246.85 2005-2006 147.85 276.56 2006-2007 92.26 251.06 2007-2008 111.28 287.36 2008-2009 226.89 341.04 2009-2010 253.82 320.34 2010-2011 225.14 341.98 2011-2012 283.35 350.41 2012-2013 381.48 340.44 2013-2014 250.92 318.45 2014-2015 280.23 320.40 2015-2016 280.88 340.54 Source: Food corporation of India

25. Total Allocation of food grains for the Year 2014-15 under TPDS and Other Welfare Scheme (in lakh MT ) Schemes Allocation 1 APL/BPL 66.45 2 NFSA (normal) 218.66 3 NFSA (tide over) 264.85 4 Additional TPDS requirement for festival, relief etc. 12.85 5 Other welfare schemes 50.00 Total allocation 612.80 Source: Annual Report 2014-15,Department of Food and Public Distribution

26. Total Offtake of Rice and Wheat for the Year 2014-15 under T PDS and Other Welfare Scheme (in lakh MT ) Source: Annual Report 2014-15,Department of Food and Public Distribution Scheme Rice Wheat Total (A) TPDS AAY 37.274 9.557 46.831 BPL 59.625 18.561 78.187 APL 44.937 41.771 86.708 NFSA(Normal) 64.327 84.910 149.237 NFSA(Tide Over) 1.117 2.931 4.048 Total 207.281 157.730 365.010 Special Adhoc 15.559 1.721 17.281 Offtake against allocation made at economic cost/MSP rate 2.446 3.863 6.306 Sub-Total (A) 225.286 163.311 388.597 (B) Welfare Scheme MDM 14.809 2.752 17.561 WBNP 3.392 5.992 9.384 EFP Hostel/Welfare Institutions 1.310 0.446 1.756 Annapurna 0.043 0.008 1.138 RGSEAG- SABLA 0.244 0.894 1.138 VGB Sub-Total (B) 19.797 10.092 29.889 (C) Other Schemes WFP, Relief, Defense etc. 1.104 0.065 1.169 Open Sale/Tender Sale/Export 0.005 16.891 16.831 Sub-Total (C) 1.109 16.891 18.000 Grand Total (A+B+C) 246.193 190.293 436.486

27. Source: Annual report 2014-15 ministry of consumer affair, food and public distribution Stock position of food grains in the central pool vis-à-vis minimum buffer norms (lakh MT) Year Wheat Rice Total Minimum buffer Norms Actual stock Minimum buffer Norms Actual stock Minimum buffer Norms Actual stock 1.1.2011 112.00 215.40 138.00 255.80 250.00 471.20 1.4.2011 70.00 153.64 142.00 288.20 212.00 441.84 1.7.2011 201.00 371.49 118.00 268.57 319.00 640.06 1.10.2011 140.00 314.26 72.00 203.59 212.00 517.85 1.1.2012 112.00 256.76 138.00 297.18 250.00 553.94 1.4.2012 70.00 199.52 142.00 333.50 212.00 533.02 1.7.2012 201.00 498.08 118.00 307.08 319.00 805.16 1.10.2012 140.00 431.53 72.00 233.72 212.00 665.26 1.1.2013 112.00 343.83 138.00 322.21 250.00 666.04 1.4.2013 70.00 242.07 142.00 354.65 212.00 596.75 1.7.2013 201.00 423.97 118.00 315.08 319.00 739.05 1.10.2013 140.00 361.00 72.00 190.33 212.00 551.33 1.1.2014 112.00 280.47 138.00 146.98 250.00 427.45 1.4.2014 70.00 178.34 142.00 202.78 212.00 381.12 1.7.2014 201.00 398.01 118.00 212.36 319.00 610.37 1.10.2014 140.00 32851 72.00 150.81 212.00 479.32 1.1.2015 138.00 251.13 76.10 117.43 214.10 368.56

28. Minimum support price (Rs./ Quintal) Year wheat paddy common grade- A 2011-12 1285 1080 1110 2012-13 1350 1250 1280 2013-14 1400 1310 1345 2014-15 1450 1360 1400 2015-16 1525 1410 1450 Central issue price (price per kg in Rs.) Source : Economic survey Sources: Food Corporation of India; PRS. Year Rice Wheat AAY BPL APL AAY BPL A PL 2002 3.00 5.65 8.30 2.00 4.15 6.10 2012 3.00 5.65 8.30 2.00 4.15 6.10

29. Quantum of food subsidies released Govt. of India Year Amount(crore) Annual growth rate 2001-02 17499 - 2002-03 24176 38.16 2003-04 25181 4.2 2004-05 25798 2.4 2005-06 23077 -10.55 2006-07 24014 4.06 2007-08 31328 30.46 2008-09 43751 39.65 2009-10 58443 33.58 2010-11 63844 9.24 2011-12 72,370.90 13.36 2012-13 84,554.00 16.84 2013-14 89,740.02 6.13 2014-15 1,07,823.75 20.15

30. Storage capacity with FCI (fig. in lakh MT) 15.8.2016 States Total storage capacity with FCI Covered CAP Total Owned Hired Owned Hired Owned Hired Punjab 22.15 81.70 7.24 0.00 29.39 81.70 Haryana 7.58 44.66 3.33 0.00 10.91 44.66 U.P. 12.43 29.85 0.05 0.00 12.48 29.85 Rajasthan 6.99 11.02 0.26 0.07 7.25 11.09 Uttrakhand 0.60 1.02 0.18 0.00 0.78 1.02 Delhi 2.48 0.00 0.00 0.00 2.48 0.00 J & k 0.97 1.40 0.00 0.00 0.97 1.40 H.P. 0.19 0.30 0.00 0.00 0.19 0.30 Total 53.39 169.95 11.06 0.07 64.45 169.95 223.34 11.13 234.47 Source :- IRRS STATEMENT

31. PEG Summary on North Zone (31.07.2016) (in Lakh MT) Capacity Region Approved Cancelled Net Sanctioned Completed Taken over Not taken over Under construction Yet to start Punjab 45.29 0.20 45.09 44.94 44.69 0.25 0.00 0.15 Haryana 45.03 9.84 35.19 33.93 33.80 0.13 0.76 0.32 Rajasthan 2.50 0.15 2.35 1.63 1.63 0.00 0.72 0.00 UP 22.73 6.40 16.33 13.60 12.06 1.54 2.73 0.00 UKD 0.10 0.00 0.10 0.00 0.00 0.00 0.00 0.10 Jammu 2.94 0.30 2.64 1.27 1.27 0.00 1.17 0.20 H.P 1.18 0.00 1.18 0.20 0.20 0.00 0.05 0.93 Total 119.77 16.89 102.88 95.57 93.65 1.92 5.43 1.70

32. TARGETING ERRORS AND LEAKAGES The implementation of TPDS is accompanied by large Errors of Exclusion (of BPL families) Inclusion (of APL) Prevalence of ghost BPL cards. High exclusion errors imply low coverage of the target group (BPL households). TPDS also suffers from diversions of subsidized grains to unintended beneficiaries (APL households) because of Error of Inclusion.

33. Total leakages > 36 %, Leakages through Ghost Card – 17%, Leakages at FPS - 19% Diversion of food grain to APL- about 25% ( AP, Karnataka, Kerala and TN contributed 70 % of this) Bihar and Punjab rank top most with more than 75% PDS food grain leaking out. Assam, Gujarat, H.P. and Rajasthan are states with high leakages of food grain more than 25% A.P, Kerala , TN , Orissa and W.B. are states with least Quantity of food grain leaking out .

34. Leakages from PDS Type of leakage Percent States High and low exclusion of BPL families High leakages >20% Assam, Bihar, Gujarat, Haryana, Karnataka, Maharashtra, Odisha , Uttar Pradesh, West Bengal Low leakages <20% Andhra Pradesh, Himachal Pradesh, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu Leakage at fair price shop Very high leakages >50% Bihar, Haryana and Punjab High leakage 25-50% UP & Rajasthan Moderate leakage 10-25 % Bihar, Gujarat, KTK, Maharashtra,Orissa,TN and West Bengal Low leakage <10% Assam,HP,MP, Orissa,TN & West Bengal. Leakage through ghost card Very high Leakage >30% Assam, HP &MP. High leakage 10-30% Bihar, Gujarat,Ktk,Maharashtra, Orissa, Uttarpradesh and west Bengal Moderate leakage <10% AP,Haryana,Kerala,Punjab, Rajasthan and TN Source: “Performance Evaluation of Targeted Public Distribution System”, Planning Commission, 2005.

35. Fallouts of P.D.S. Problem of Hunger still exists in many areas of India. Deterioration in quality of stored food grains if kept for longer time and high storage cost Increase in MSP has led to shift from coarse grain to rice and wheat production among the farmers. Cultivation of rice has also led to environmental degradation and fall in the water level. There is no set criteria as to which family is BPL and which is APL. This non ambiguity gives massive scope for corruption and fallouts in PDS systems because those who are actually meant to be benefitted are not able to taste the fruits of PDS.

36. Contd …. . Malpractices on part of PDS dealers: Diverting the grains to open market to get better margin, Selling poor quality grains at ration shops, Irregular opening of the shops Deceitful dealers replace good supplies received from the F.C.I(Food Corporation of India) with inferior stock and sell FCI stock in the black market. Illicit fair price shop owners have been found to create large number of bogus cards to sell food grains in the open market. Many FPS dealers resort to malpractice, illegal diversions of commodities and black marketing due to the minimal salary received by them. Regional allocation and coverage of FPS are unsatisfactory and the core objective of price stabilization of essential commodities has not met.

37. Conclusions The food security has many dimensions. It may arise at global, national, sub- national and household level. PDS is one of the biggest network of its kind for the distribution of food grain to the vulnerable section of the society. PDS has become a central tool of the Government for managing the food economy of the country . The quantum of food subsidy has increased due to constant CIP and increasing MSP.

38. The margin of stocks above the minimum buffer stocks has been increasing over the years – impacts prices of grains in the open market. Identification of beneficiaries is challenging task as many deserving persons are excluded while undeserving are included. Increasing food grains stocks and the slower increase in FCI storage capacity put grater pressure on storage capacity available in the country. In Andhra Pradesh , Karnataka, Kerala and Tamil Nadu, the proportion of subsidized grains received by APL households is unacceptably large.

39. Thank you……