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India's Export Ban on Foodgrains: A Measure to Ensure Availability of Food for its Poorest Citizens

Sunday, June 1, 2008
India's Export Ban on Foodgrains

A Measure to Ensure Availability of Food for its Poorest Citizens

By Adil Ali

Adil Ali, a fellow at the Oakland Institute, teaches at the Centre for Culture, Media and Governance at Jamia Millia Islamia, a central university in India.

Recent remarks from top U.S. officials on the causes of the food price crisis caused quite a stir in India. U.S. Secretary of State, Condoleezza Rice, shot off the first salvo stating “improvement in the diets of people in India and China” is forcing the governments to keep food “inside.” This was followed by George Bush's more nuanced statement on the growing consumption of “350 million” strong Indian middle class. These remarks come with criticism of export bans on key agricultural commodities that several countries including India have placed to meet domestic needs. While comments from President Bush and Condoleezza Rice have generated a sense of outrage across the political spectrum in India, they have not evoked an adequate response.

Today India faces an agricultural crisis and significant hunger and nutrition security issues, which are structural in nature and not due to the current skyrocketing prices of basic staples. While a small section of the Indian population – one that Mr. Bush feels has been demanding more and thereby creating an imbalance in the world consumption basket – has benefited from spectacular growth since the 1990s, a quick look at the national numbers paints a different picture.

 

While many might believe that the miraculous New Economic Policies adopted by India in the 1990s have improved diets of Indians, the 2007-2008 Economic Survey points out that the consumption of cereals declined from a peak of 468 grams per capita per day in 1990-91 to 412 grams per capita per day in 2005-06, indicating a decline of 13 per cent during this period. The consumption of pulses declined from 42 grams per capita per day (72 grams in 1956-57) to 33 grams per capita per day during the same period.”

Appreciating the fact that India has a burgeoning middle class with an “improving diet,” it is the poor who are suffering acutely and facing hunger. The World Food Programme’s country page for India states: “nearly 50 percent of the world's hungry live in India, a low-income, food-deficit country. Around 35 percent of India's population - 350 million-are considered food-insecure, consuming less than 80 percent of minimum energy requirements.” According to the NSS 62nd Round, 53% of the expenditure of an average rural Indian was on food with more than 70% of the rural population needing to devote greater percentage on food from their needs basket. With 30% of the population in the lowest bracket spending more than 60% of expenditure on food, compared to the top bracket which spends only 41% on their entire food basket (including significant amounts of meat, fruits and vegetables), the poor are more vulnerable to increasing prices of foodgrains and pulses and with inflation getting close to 8%. The Indian Planning Commission (Draft XIth Plan Document) makes it more obvious: “the significant point is that overall, per capita intake of calories and protein has declined consistently over a 2-year period from 1983 to 2004/5.... Rural calorie consumption per day has fallen from 2221 to 2047, an 8% decline. Similarly, the urban calorie consumption fell by 3.3%, from 2080 to 2020. The rural protein consumption fell by 8% over the same period, and urban consumption remained the same over the 20-year period.”

As far as the current food price crisis is concerned, India has sought to control agricultural prices by trying to restrict hoarding and putting a curb on non-premium rice export – a step which should have been taken some time ago.

Net availability of foodgrains in the 1960s was bolstered through large imports of grains to combat distress. Net availability over time went up as the Green Revolution kicked in but has steadily declined since the early 1990s. As of 2005 (the latest data set available), the per capita food availability is down to 422.4 gram per day, similar to the numbers from about 50 years ago with one significant difference - India till a few weeks ago was exporting grains – the same it was importing 50 years ago. India’s agricultural trade balance has been positive (foodgrain export being higher than imports) for all but 2 years since 1991, a period when net per capita availability fell from 510.1 grams (1991) to 422.4 grams (2005). This was also a period which saw rice exports from India increase from 0.5 million tons (1990-91) to 4.75 million tons (2006-07).

India may have an international obligation towards helping other countries, and it may have a middle class with a strong effective demand, but the decision to hold onto its domestic production is the obligation of the Indian State to its own citizens – 77% of who subsist on less that Rs. 20 ($0.50) per day. While the majority of non-premium rice that is exported from India goes to sub-Saharan Africa and the ban would adversely impact its availability and thus increase prices, the difficult question is who will bear the costs of these exports? Food exporters in India are protesting the ban as it impacts their profits, not out of any concern for the poor in sub-Saharan Africa. Besides, countries in the Sub-Saharan region like Senegal are already emphasizing food self -sufficiency and keen to boost their own agricultural production to eliminate dependence on food imports.

By holding back essential commodities in the country, the Indian government is not only seeking to feed the “350 million” strong middle class but more important attempting to protect the poor and vulnerable against the current agricultural global price shock. The ban has actually come later than earlier. However, in itself, it will not be sufficient.

To effectively deal with hunger in the long run, India needs to work towards giving an impetus and improving productivity of dry land farming as 60% of India's agriculture is rain dependent. India has to work towards making its safety nets for the poor and vulnerable more effective through better implementation of the National Rural Employment Guarantee Programme, the Public Distribution System, and the Social Security schemes. India also needs to work towards revitalizing its agricultural sector, make significant additional investments in the rural areas that support small farmers that form the bulk of Indian agriculture, and emphasize production of food crops for local and national markets. A spate of farmers suicides across the country, an estimated 150,000 over the last decade, is a rude reminder of India’s agrarian crisis and the perverse grip of cash cropping on poor farmers which has been bolstered by seed and chemical agribusiness.

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