GS Paper III

News Excerpt:

The authors Jean Drèze and Christian Oldiges, explore the perplexing factors that contribute to the significant discrepancy between India’s annual cereal production and consumption numbers.

Production-Consumption Discrepancy:

• According to the official Foodgrains Bulletin, cereal production (mainly rice and wheat) crossed 300 million tonnes for the first time in 2022-23, reaching 304 million tonnes to be precise.
• The three-year average of annual production in the most recent years for which data are available (2020-21 to 2022-23), it comes to 292 million tonnes —close to 300 million.
• Combining both the second India Human Development Survey (IHDS-2) and National Sample Survey (NSS) data, the consumption requirements stand at only about 200 million tones.
• The authors are trying to account for the difference of about 100 million tonnes between production and consumption.

Per Capita Cereal Consumption (PCCC) Trends:

• The PCCC trends in India reveal a perplexing scenario. The latest estimates from 2011-12 indicate figures of 11.6 kg per month (India Human Development Survey-2) and 10.7 kg per month (National Sample Survey).
• All data indicate a decline in monthly PCCC steadily from the late 1970s onwards. 
• The declining PCCC trend challenges assumptions of rising poverty as the primary cause. Instead, urbanization, increasing education levels, diversification of food intake, and potential reductions in activity levels are identified as factors contributing to this decline among better-off sections of the population.
• The evolving consumption patterns underscore the complexity of addressing the production-consumption gap in India's cereal economy.

Economic Survey's Estimates and SFW Allowance:

• The Economic Survey’s “Net Availability” estimates are inflated by an insufficient seed, feed, and wastage (SFW) allowance. The traditional allowance of 12.5% consists of 5% for seed, 5% for feed and 2.5% for wastage. 
• Independent experts have argued for some time that the 5% norm for feed is too low.
• If we double the feed allowance, from 5% to 10% of gross production, that would reduce the cereal gap by 15 million tonnes or so. A large gap would still remain.

Other Uses of Cereals:

• Cereals are not solely consumed by households; they serve other purposes like seed, animal feed, and industrial uses.
• The mystery deepens whether cereal consumption is increasing due to the expansion of the public distribution system, or if animal feed and industrial uses have surged, contributing to the gap.

Conclusion:

Reducing India's cereal gap offers a chance for comprehensive policy reform that will promote a strategic diversification of agricultural output. In order to ensure sustainable practices and match production with changing consumption patterns, this challenge has the potential to spark creative solutions that will ultimately improve the food security and economic health of the country.