What is the cost of not feeding India’s malnourished children?

‘Zero Hunger’ is the second sustainable development goal, the first being no poverty. The key to achieving both these goals lies in ‘all people at all times having physical and economic access to sufficient, safe, and nutritious food  that meets their dietary needs and food preferences for an active and healthy life’, which is how ‘food security’ is defined as. And what holds the key to food security is agriculture, on which around 40 per cent of our population directly depends on for their livelihood. Given that agriculture and food security are such key concerns, how is our Government planning for it, how much are we investing in it, and what does our union budget have to say about that? These were some of the questions tackled by Dr. Madhura Swaminathan, Professor at the Economic Analysis Unit, Indian Statistical Institute, Bangalore, in her lecture on ‘Food security and agriculture: Implications of current policy and budget’. The lecture was organised by our neighbour in south Bangalore, Centre for Budget and Policy Studies, as part their annual lecture series on budgets.

Even before going into issues of access, the first question that comes up when it comes to food security is do we have enough? Do we have sufficient food to feed a population of little more than a billion people? According to Dr. Madhura, up to the 90s the answer to that question was yes. The graph of food production she showed hovered above the line tracking our population growth. But after the 90s, the situation reversed, which is bad news for both sides — those who grow food and those who eat food.

How badly have the producers of food been affected? For starters, there is little data on income of producers, said Dr. Madhura. To address this paucity of data, a group of scholars including Dr. Madhura conducted detailed surveys of 5000 households in 22 villages as part of the Project on Agrarian Relations in India (PARI). From the income data collected, Dr. Madhura highlighted two observations — one of extreme inequality. In the same village there are farmers who earn around Rs. 29 lakh a year, and others who barely make do. The other was of what she termed as ‘negative income’, where what you earned was less than what you spent. A significant number of farmer households have negative incomes. This leads farmers to abandon farming entirely, which exacerbates the situation we have now where already the food we produce isn’t enough for us all to be food secure.

Why?

Why is agriculture not making profits for these small (less than 2 hectare holding size) and marginal (less than one hectare holding size) farmers? First is that the input costs (seeds, fertilisers, machinery, etc) have shot up, something that is particularly hard on the small and marginal farmers. Second, the Minimum Support Price set by the Government isn’t enough to compensate for the investments that have gone in.

What then is the Government doing?

Not nearly enough, said Dr. Madhura. Though newspaper headlines hailed an almost 94 per cent increase in Government spending on agriculture, she said the increase was the result of some deft statistical jugglery with ‘interest subvention’. When the Government gives banks money so that they can then lend to farmers (or any sector) at a reduced rate of interest, it is termed as ‘interest subvention’. The money allocated thus for interest subvention goes to the banks, and not to farmers directly. The amount Government allocates for interest subvention for agriculture was earlier not added to the agricultural budget, but this year it was. And the sum of Rs. 15,000 crore allocated to interest subvention accounts for the gigantic leap into agricultural acchedin. What happens if you remove that figure? What you the get is an increase of around Rs. 7000 crore, which would not have garnered the kind of headlines that the budget did. (For a detailed analysis of why the allocation ‘math for the agricultural sector in the budget doesn’t add up’, go here.)

If we take away the interest subvention, does the figures still indicate an increased spending in agriculture?

If you look at spending in agriculture as a percentage of GDP, in 2012-13, it was 0.3 and in 2016-17 it is again 0.3. Therefore, it isn’t a big difference from what has happened earlier.

But the interest subvention has been increased from Rs. 13,000 crore to Rs. 15,000 crore. Isn’t that a good thing?

Apparently not, said Dr. Madhura. As mentioned earlier, the money given for interest subvention goes to the banks and not the farmers. One study shows that most credit goes to urban and metropolitan banks rather than rural banks and is disbursed to either large farmers or even large corporates. For instance, if a soft drink company wants to put up an irrigation system, it would be eligible for a loan. Therefore, the small and marginal farmers, who are in dire need of timely and affordable credit, are not the main beneficiaries. (For more on how ‘rural’ is agricultural credit, go here. The op-ed piece draws from studies by the same authors Dr. Madhura referred to.)

In this scenario, what happens to people who need food? We are worse off than all our neighbours when it comes to malnutrition figures, and so there is no question that there are a large number of desperate people who need immediate attention.

What are we doing for nearly 30 per cent of India’s children who are underweight? (For more on the ‘overlooked malnutrition crisis in India’, go here.)

Not much, according to Dr. Madhura. There has been a gradual policy shift toward targeted schemes, where the Government ‘targets’ who needs attention, rather than go toward universal food security. Now targeting has two kinds of errors – errors of inclusion and exclusion. If those who don’t need subsidised food get it, it is an error of inclusion. If those who need it don’t get it, it is an error of exclusion. The focus has been on errors of inclusion, because you can estimate financially what that error costs you. On the other hand, the error of exclusion is tricky.

For example, what is the cost of not feeding India’s malnourished children?

What happens when people who need the food don’t get it? Malnutrition, disease, inter-generational issues — all these are intangibles, and therefore difficult to put a cost on. Numbers can prove to be tyrannical. Easily quantifiable, something that can be plotted in graphs and charts is tangible, and something that evades that kind of easy quantification becomes an almost ephemeral entity. If there is no calculable cost to not giving children food they need, then it becomes intangible, a non-headline grabbing entity that fades into and falls off the margins.

Before asking the question of what is the cost of not feeding India’s malnourished children, the, more crucial question becomes, should we know the answer to that to make us do something about it?