How can policymakers, investors and development practitioners improve the affordability and availability of diverse, high-quality and nutrient-rich foods in India?
This is the question that set the stage for the policy dialogue in New Delhi on August 5th, 2016, held as part of the inauguration of the Tata-Cornell Institute’s (TCI) new project: Technical Assistance and Research for Indian Nutrition and Agriculture (TARINA). Ideas flowed from six distinguished speakers representing the government, academic and donor community. Over 100 guests from the development sector attended the event.
Distinguished panelists (from left to right): Dr. Prabhu Pingali, Professor of Economics at Cornell University & Director of TCI; Dr. Purvi Mehta-Bhatt, Deputy Director and Head of Agriculture for South Asia at the Bill & Melinda Gates Foundation; Dr. Ashok Gulati, Infosys Chair Professor at the Indian Council for Research on International Economic Relations (ICRIER); Dr. Shobha Shetty, Rural Development Sector Manager for the South Asia Region at the World Bank; Dr. P.K. Joshi, Director for South Asia at the International Food Policy Research Institute (IFPRI); and Dr. Suresh Pal, Member at the Commission for Agricultural Costs and Prices (CACP). (Photo credit: Megan Witwer)
The panel and ensuing discussion was held in light of the mission of TARINA to tackle malnutrition in India from a food systems perspective. TARINA considers the need to build better connections between factors that influence both agriculture and nutrition within and across different stages of food value chains, from production to consumption. A food system includes all value chain actors such as individuals, enterprises and institutions that influence the supply, demand, consumption and absorption of food and micronutrients. Thus, implementing a “food systems” approach to reduce malnutrition requires close engagement and coordination among a wide range of stakeholders, from policymakers, nutritionists and agricultural scientists to farmers, traders, processors, retailers and final consumers.
One of the crucial issues that the panelists agreed upon was the excessively skewed incentive system in India that subsidizes the production of staple crops, primarily rice, wheat and, to some extent, maize. These staple crops are given a price floor to ensure the farmer is not behest to the instability or fluctuations in the market. Such policies favoring staple crops arguably distort the market, thereby generating disincentives for the production of more nutritious, non-staple crops, such as fresh fruits, vegetables and pulses.
Among the proposed strategies to reduce what TCI Director, Prof. Prabhu Pingali, terms “staple grain fundamentalism”, was a suggestion to remove policies that create price-based incentives entirely and replace them with an income support program through cash transfers to farmers. This would give farmers the autonomy to make crop selection decisions and to efficiently utilize resources at their own will.
Dr. Prabhu Pingali, event moderator and panelist, fielding questions from the audience. (Photo credit: Megan Witwer)
A few panelists suggested the government offset disincentives for non-staples by establishing a procurement and distribution system for pulses, but indicated that this would be difficult for perishable commodities like fruits and vegetables due to the high risk and costs associated with the marketing and storage of such produce. Panelists argued that more appropriate interventions for these types of commodities include the strengthening of value chains, investment in post-harvest management technologies and the introduction of government-supported cooperative systems, similar to the Amul dairy cooperative model. However, scaling-up these initiatives involves taking on a price risk, given the biotic and abiotic factors that limit the reliability of fruit and vegetable production.
Interestingly, the consensus among policymakers, practitioners and academics is shifting rather uniformly toward food processing and cold storage as a means of increasing incentives for the production of fresh foods. At present, the government is interested in attracting foreign direct investment for the food processing industry. In the past, the agro-processing industry generated more jobs and revenue for the unorganized sector than for the organized sector. New avenues can be created for exporting the processed food, but further research is required to accurately determine the competitive advantage that India has for producing such innovative products.
Deficiencies in the domestic supply and production of pulses are a particular area of concern. Some panelists claimed that India’s trade policy lacks consistency and is not able to adequately respond to fluctuations in the demand and supply of pulses. Others argued that inadequate pulse production is not only linked to policy inefficiencies, but also to factors like a lack of technological advancement and high production risks.
Reservations were expressed regarding any strategy to diversify agricultural production that involves shifting land suitable for rice production to non-staples. Increasing agricultural diversity, while keeping in mind ecological and environmental limitations, therefore becomes a very important point of consideration. On the other hand, the continuous production of water-intensive crops in water-stressed regions was also identified as a major policy concern. Panelists noted that more attention should be paid to research and development for climate-smart agriculture, with solutions that are specific to the “natural resource base” of India. Efficient utilization of inputs, accompanied by better agronomic practices, can maximize production and reduce the cost to the farmer and the environment.
The ideas shared at the August 5th panel discussion pertain to broad initiatives to direct agricultural policy away from “staple grain fundamentalism” toward creating a diversified food system in India. This policy dialogue comes at a time when India’s rates of malnutrition and micronutrient deficiencies are among the highest in the world, signaling the urgent need to introduce a more nutritious food base for both the urban and rural poor. Although there was considerable discussion around the diversification of India’s food supply, consumer education was also highlighted as a method to generate more demand for nutritious food in the coming years.
While many policy limitations were tabled, such as the introduction of perishable commodities into the Public Distribution System (PDS), there were also strong differences of opinion on whether or not India should de-regulate its agricultural market and remove subsidies for staple crops entirely. This change would require farmers, traders and other actors participating in the market to respond to distortion-free, rather than imposed, prices. The question of de-regulation will likely be the most crucial point of contention for policymakers in the coming years, since the resulting decision has the potential to change the face of agricultural production in India. The panel served as a platform for debating these emerging issues, with hopes to see increased action and policy reforms that improve nutrition outcomes in the future.
To watch the full video coverage of this event, please click here.
The TCI-TARINA team after the public policy panel discussion in New Delhi. (Photo credit: Usha Ramakrishnan)
By Vanya Mehta