Activists demanding food as a fundamental right view the state as saviour, unperturbed by pervasive state failure in sector after sector. The public distribution system (PDS) is a public scandal. Activists say if only all states create as good a PDS as Tamil Nadu’s, the system will work beautifully. This is like saying that if only all Indian cricketers play as well as Tendulkar, India will be world cricket champion. Policies must not assume that the best can always be had with sufficient moral urging. Rather, policies should be designed to work even with very sub-optimal implementation.
I am all for aiding the needy but against entitlements parading as rights, which hugely expand a corrupt, inefficient state. In National Sample Surveys, the percentage of people claiming to be hungry has fallen steadily from 15% in 1983 to 2% in 2004-5. Economists Dreze and Deaton have shown that as incomes rise, poorer Indians opt for superior foods rather than more calories. Clearly, only non-hungry people will prefer quality over quantity. Poverty is still substantial, but hunger is now marginal. Instead of rejoicing in this, leftists remain in denial.
The big problem is malnutrition, not hunger. A recent survey revealed anaemia rates of 51-74% in women and small children. Of children under three, 47% were underweight and 45% stunted by global standards. Protein deficiency is a culprit.
How do we focus on nutrition rather than presumed hunger? Not through ever-rising subsidies on food. Sonia Gandhi wants subsidized grain even for better-off folk. This aims to provide electoral security for Sonia. Don’t confuse it with food security.
Dreze and Amartya Sen have shown that targeting the needy can lead to huge errors — exclusion of the poor, inclusion of the non-poor. Targeting can be socially divisive and create poverty traps — if a poor man becomes non-poor, he loses his subsidized food and slips back into poverty. Hence Dreze prefers subsidies for all.
However, self-targeting can avoid problems of exclusion, inclusion and poverty traps. Maharashtra’s rural employment schemes in the 1970s paid low wages that only the poor would accept, a good example of self-targeting.
Ajai Shankar, former industry secretary, has an excellent suggestion for self-targeting in food — mix wheat flour (atta) with soya flour, raising its protein content but making it less palatable. Richer folk will not eat this, but poor people will. Such protein fortification of atta could help reduce protein deficiency in pregnant women and children. Ajai Shankar also suggests offering brown, unpolished rice, which has more nutrition but is less palatable than white rice, and so will be self-targeted at the poor.
I would fortify atta with not only soya but iron (to combat anaemia), iodine (to combat goitre) and Vitamin A (to combat night blindness). This will cost very little extra, yet combat serious nutritional deficiencies. It’s not a silver bullet: other nutritional programmes need overhaul and strengthening too.
Brown rice has two drawbacks. First, it can be resold by shopkeepers to mills at a huge profit, so the PDS incentive for massive diversion will remain. Atta mixed with soya cannot be unmixed, and so eliminates diversion.
A bigger objection should be to rice in any form. Rice is the most expensive cereal, and guzzles the most water. It requires 22 irrigations per crop against eight for wheat. Rice cultivation is sustainable in high rainfall areas, but is environmentally disastrous in moderate-rainfall areas (Punjab, Haryana). It lowers the water table precipitously, so drinking-water wells and shallow tubewells of small farmers run dry, and some of them commit suicide.
Any food entitlements should be for basic food, not for the most expensive cereal. A right to rice is conceptually like Marie Antoinette’s right to cake. For centuries, poor Indians have eaten coarse grain (bajra, jowar) costing half as much as rice. If necessary, India can export rice to finance imports of twice as much coarse grain, which can then be fortified with nutritional supplements for the PDS. It will be self-targeting: richer folk will not buy it.
Some economists would rather send money to the needy than subsidize goods (food, fertilizers, electricity). But since this is politically unacceptable, a second-best solution is universal entitlement to nutritious but unpopular foods that only the poorest quarter or third of the population will actually buy.
This will be inclusive, yet relatively inexpensive. It will address the fact that nutrition is a greater problem than hunger. It will eliminate incentives to divert supplies to the open market, and so work even in corrupt states. But, like many good ideas, it will not translate instantly into votes. Will that be fatal?