Security Research Review

Food Security Series Part 1: Food Demand 

Raj Kumar

Executive Summary

India's population is rising  at a steady rate. Feeding these many people poses a considerable challenge. There is a need to study the projections of food demand and supply for the rising population. In the paper we look the problems  and prospects for production of large quantities of food. An shortfall in production will lead to a demand for food imports. The ability to preserve a steady supply of food without excessive economic strain to the nation is a vital aspect of its security. 

Introduction¹

Access to adequate food, which is one of the foremost basic needs of life, should be the birthright of every single Indian. In 1970, India ’s population was only two- thirds its current size, but cereal production was only half the current level and the country was critically dependent on food aid to prevent wide spread famine, particularly in drought years.

Today, India is self sufficient in cereals. The nation produces and consumes about 206.4 million metric tonne ² of cereals each year (including seed and waste).

Over the next 20 years, will total cereal demand will almost double again to over 340 million tons? Or will there be significant departures from past trends that may slow or in crease growth in demand? And will national production of cereals continue to keep pace with demand, or will in creasing resource scarcity and degradation—and already high use of high-yielding varieties, fertilizers, and irrigation—limit future growth opportunities?

A quick glance at the statistics published by the Census of India as a result of the 2001 Census shows that approximately 70% of India’s population is resides in a rural setting, Refer to Table 1 .

* denotes Union Territory

Table 1 – Population Data ³

This article is the 1 part of a 3 part article examining the Food Security of India. The article provides a brief overview of the state of Food demand & growth in India . This paper is based on the literature search of reports, studies & publications, and analysis of secondary data.

Demand for Cereals

From the mid 1970s to the early 1990s, several studies predicted that total food grain (cereal plus pulses) demand in India would exceed 200 million tons by the year 2000 ^{3, 4}. But these demand projections have proved too high, as evidenced by total food grain demand of only 170 million tons in 2003, slowing population growth, and declining per capita cereal consumption. More recently, several studies have projected continued slow growth in India ’s cereal needs into the early decades of the next millennium⁵ in consumption behavior, the distribution of income, and live stock production systems.

In urban areas, per capita cereal consumption seems to have stabilized at about 130 kilograms per year, while it has actually declined in rural areas — from 185 kilo grams in 1980 to 160 kilo grams per year currently. Diets are more diversified, with increasing shares of the food budget al located to milk, eggs, and live stock products. Consumption of milk and milk products, in particular, has grown rap idly, averaging about 6 per cent per year. Cereal demand for live stock feed has also remained low, at about 5 million tons per year.

There are many models which have been developed in order to project demand for cereals. The main ones are Rosegrant ⁶ & IMPACT ⁷

Assumptions for Demand Growth

Cereal demand projections are based on assumptions about growth in population size, urbanization, and national per capita income, as well as changes in consumption behavior, the distribution of income, and livestock production systems. These are discussed below.

                                 (i).      Growth in population size

                                (ii).      Rate of urbanization

                              (iii).      National per capita income

                             (iv).      Changes in consumption,

                               (v).      The distribution of income, and

                             (vi).      Live stock production systems.

Each of the above is now examined in greater detail.

  Growth in Population

India ’s population, measured at 1027 million in 2001, and has tripled since Independence in 1947 and almost doubled since 1980. The growth rate is slowing down, from 2.2% per year in the 1980s to 1.9% in the 2000’s, and is expected to slow even further. Still, the population is projected to reach 1.3 billion by 2020. Refer to Table 2 & Table 3 below.  

Table 2 – Population & It’s Growth Rate⁸

Table 3 - Population Projections For 2020⁸

Rate of Urbanization

Assumptions about urbanization are based on the urbanization projections developed by the Government of India⁹. These projections indicate an urban population of 465.6 mil lion by 2020 (up from 285 million in 2001), and a rural population of 863.5 mil lion (up from 741 million in 2001). The urban share of the total population is projected to in crease from 26% to 35% of the total population. Refer to Table 3 .

National Per Capita Income

The baseline case for per capita income growth is assumed to average 3.7 percent per year over the 1993-2020 period.

Changes In Consumption

It is now widely recognized that dramatic changes in food consumption patterns have taken place in India in the post green revolution period⁶.  For example, at the all-India level, cereal consumption declined from 15.3 kilograms per capita per month in 1972/1973, to 13.4 kg per capita, per month in 1993-1994 in rural areas. In urban areas, the corresponding decline was more modest from 11.3 to 10.6 kg over the same period. At the same time, the consumption of milk and meat products has increased.  Such changes in the diet, in the direction of greater variety, have come to be expected as one outcome of the process of economic development.

Between 1972/1973 and 1993/1994 the food basket has become much more diversified.  In particular, cereal shares have seen a dramatic decline of ten percentage points in most regions-in both rural and urban India .  Similarly, the share of meat and milk products, and vegetables and fruits has increased over time. 

The trend towards a more diversified diet can be discerned not just on average, but among the poorest 25 percent of the population as well.  Thus although cereals continue to dominate food expenditures, over time their importance has decreased; while at the same time, cereals have become cheaper in relation to other food groups. For example, in rural areas of Uttar Pradesh the per capita monthly consumption of cereals for the lowest quartile income group has declined from 13.6 kg in 1972-1973 to 12.3 kg in 1993-94. During the period coarse cereals consumption declined from 5.0 kg to 0.8 kg per capita per month. This was only partly offset by increase in consumption of rice from 2.6 kg to 3.5 kg and that of wheat from 6.1 kg to 8.1 kg.  

Between 1972-1973 and 1993-1994 in Uttar Pradesh the share of cereals in total food expenditure among the lowest quartile income group declined from 69 per cent to 49 per cent while that of milk and meat increased from 7% to 12%, that of vegetable and fruits also by the same amount and that of other food items from 17% to 28%.

It has been noted that over a period of two decades that is between 1972-1973 and 1993-1994 the per capita consumption of cereals has shown a steeper decline (by around 12 per cent) in rural areas than in urban areas (around 5 per cent)¹³. This has been attributed to the spread of the road network to rural areas and the increased availability of manufactured goods in rural areas. The message from all the data is that the demand pattern for food consumption is undergoing a change in India .  

People today prefer to consume more of non-cereals and among cereals the preference is for rice and wheat as against coarse cereals. There is a shift in the consumption pattern of the population towards superior food items like milk, vegetables, fruits, and animal foods. Thus the growth of aggregate demand for cereals in the country is slowing down because of deceleration in the pace of population growth and a shift in consumer preference towards non-cereals.

  The distribution of income

The baseline estimates assume that distribution of income is unlikely to change much within rural and urban areas, and that any redistribution in income will result from rural-urban migration.

Live stock production systems

Currently, India 's livestock rely heavily on crop by-products, household waste, and open grazing areas as sources of feed. In fact, less than 5 million tons of cereals are currently fed to livestock each year, or about 3-4 percent of total cereal production.

 Further expansion of these traditional sources of feed to support a large increase in livestock production seems unlikely, particularly as available grazing areas are shrinking and are already seriously degraded¹⁰.

Sarma and Gandhi¹¹ suggest feed coefficients for more modern livestock production systems in India of 2 kilograms of feed grains per kilogram of meat and eggs, and 0.2 kilogram of feed grains per kilogram of milk.

These levels are high by international standards. A more modest feed coefficients of 1.2 kilograms of cereals per kilogram of meat and eggs, and 0.12 kilogram of cereals per kilogram of milk should be considered.

This is consistent with survey evidence of actual cereal use in broiler and egg production in Punjab , Haryana, and western Uttar Pradesh¹². It also allows for the use of other feed-grains besides cereals in dairy production, which are not included in this analysis. The model assumes that 1993 levels of livestock production can continue to be produced with the very low level of cereal feed observed that year (3.7 million tons). However, if livestock production is to increase beyond 1993 levels, then we assume that the additional output will have to be produced under more modern systems with the feed coefficients mentioned above.

Baseline for Food Demand Projection  

The base line projection of cereal demand in 2020 for direct human consumption is 246.1 million tons — a 67 per cent in crease over 1993 demand of 147.1 mil lion tons (Table 4 - Food demand projections in India for 2020 ¹ ).

Table 4 - Food demand projections in India for 2020 ¹

Table 4 - Food demand projections in India for 2020 ¹ summarizes projected food and feed requirements for cereals in 2020 under different scenarios. The base line projection is for total cereal demand of 296.2 mil lion tons, including 50.1 mil lion tons (or 17 per cent) for feed and 246.1 mil lion tons (or 83 per cent) for direct human consumption.

This would mean a doubling of total cereal demand over 1993, which is the kind of in crease that India experienced over the past 30 years. The total cereal requirement increases to 374.7 mil lion tons if per capita in come grows at 6 per cent per year, including 107.5 mil lion tons (or 28 per cent) for feed.

This level of total cereal demand seems quite reasonable when expressed in per capita terms (0.77 kilo gram per capita per day), and would bring India more into line with the level demanded in China in 1993 (0.73 kilo gram per capita per day). It is also only about one- third of the cur rent level in the United States . If per capita in come growth slows to 2.0 per -cent per year, then total cereal demand in 2020 is projected at 257.3 mil lion tons, a modest 70 per cent increase over 1993 demand.

Estimating Cereal Supply to 2020

India 's total cereal production has averaged 2.7 percent annual growth since the mid-1960s. This was more than sufficient to keep pace with growth in market demand, and the country moved from severe food crises in the mid-1960s to aggregate food surpluses today. This remarkable increase in cereal production was largely the result of increases in yields; only 20 percent of the total production increase can be attributed to expansion of the net cropped area, and 80 percent to yield increases. The yield increases were attained from two major sources: an expansion of irrigated area from 24 million hectares in 1962-65 to 44.3 million hectares in 1990-93, and the spread of Green Revolution technologies, including improved seeds and intensive use of inorganic fertilizers.

The simplest method for projecting future production of cereals in India is to extrapolate past growth trends. Assuming that total cereal production will continue to grow at 2.7 percent per year, then by 2020 production will be 347 million tons, or more than twice the production level achieved in 1993.

Production

As far as production of cereals is concerned, India has achieved self-sufficiency, more or less on a sustainable basis. There may be a decline in production once in a while due to climatic factors but gone are the days when frequent famines in some part or other of the country were not too uncommon and were known to have taken a toll of million of lives.

The pre-independence era was characterized by an all pervading hunger among a large section of the population. It was estimated by the Famine Inquiry Commission in 1945 that as many as 30 per cent of the population remained hungry. The British had not much time for removal of hunger through increased cereals production. They were content with dealing with intermediaries and were only interested in Indian Agriculture producing raw material for their mills back home. Such raw material had to be produced even if it meant, for example, transforming paddy fields into robin dye fields.

The intermediaries, in turn, were great exploiters and had no interest in either investing or even encouraging the cultivator to raise the harvests. It is, therefore, no wonder that the well-known economic historian Daniel Thorner observes "when the British withdrew from India in 1947, they left the country with perhaps the world's most refractory land problem”.

For the upper classes that were in a position to collect rents, lend out money at interest or trade in agricultural commodities, the returns were so high that there was little incentive to invest in cultivation proper. The vast majority of cultivators never had a chance to accumulate for themselves enough capital with which to become capitalist farmers¹³. The extremely unjust land tenure system accompanied by the heavy taxation of impoverished agricultural sector contributed to the permanent poverty of the Indian people.

In the 1990s, food grain output in India fell below the population growth rates. The last time such a situation occurred was in the 1960s. The opening up of Indian agriculture to trade boosted the demand for non-food crops for export to the North. Although total agricultural output still rose during the 1990s, liberalization reversed the recovery the country was making in per capita food availability, undermining the food security of the country.

Within the first half of the 1990s, growth of food output had decelerated to 1.7 per cent compound every year. During the same period population grew at 1.9 per cent compound every year. The thrust on exports of agricultural produce has resulted in a significant change in cropping patterns. Indian producers have been diverting more and more cultivable land from food grains and pulses to the production of oilseeds, cotton, horticultural crops, prawn culture, animal husbandry etc.

Cereals

Area under food grain cultivation in 1999-2000 was 4.6 million hectares less than in 1990-91. The most severe decline has been in coarse grains and pulses. Gross area under coarse grains fell by almost 7 million hectares between 1990-91 and 1999-2000. For pulses the area fell by 2.4 million hectares. However, area under rice in 1999-2000 was 1.9 million hectares higher than in 1990-91 and area under wheat went up by 4.4 million hectares during the same period. Refer to Figure 1 to Figure 4 .

   Figure 1 – All India Area Under Coarse Cereals¹⁴

 Figure 2 – All India Area Under Pulses¹⁴

 Figure 3 – All India Production of Coarse Cereals¹⁴

 Figure 4 – All India Production of Pulses¹⁴

It is no doubt a remarkable achievement to increase the cereal production by more than three times between 1951 and 1993. Net cereal protection went up from 40.1 million tonnes in 1951 to 145.6 million tonnes in 1993, the increase being 263 per cent over 42 years.

Agriculture almost all over the world suffers from fluctuating yields and Indian agriculture is also very much characterized by substantial fluctuations in production. In fact, depending on the cycle of good and poor monsoon rains, the agricultural production, especially that of cereals, also displays peaks and troughs and in between increasing or decreasing trends. Such fluctuations are prevailing in recent years also and if we observe the net production of cereals and their per capita availability, as shown in Table 5 , the effect of such fluctuations will become evident.

Note: Net Production has been taken as 87.5 per cent of gross production.

Table 5 – Production & Availability of Cereals in Recent Years¹⁵

This analysis indicates that per capita availability of cereals has substantially improved over the years, especially since 1988. Since the net availability has been calculated after adjusting for imports/exports as also change in government stocks, it can be safely presumed that availability picture can work as a proxy for consumption of cereals in India . It, therefore, follows that the per capita consumption of cereals has vastly improved over the years and since a well off household cannot over consume cereals, infect it will consume less on its income increasing, the consumption of cereals amongst even poor households must have substantially improved.

The production of rice, wheat and coarse grains totalling to production of cereals is shown in Table 6 – Total Cereal Production ¹⁵ .

Note: E - Estimated

Table 6 – Total Cereal Production ¹⁵

Pulses

As far as pulses are concerned, the picture has been rather unsatisfactory. In the decade between 1950-51 and 1960-61, the production of pulses jumped by more than four million tons, an increase of 51 percent or 5 percent per annum. This came about both by increase in area (3.39 million hectares or 16.8 percent in the decade) and increase in per unit production (441 kg per Ha to 539 kg per Ha i.e. an increase of 22 percent during the decade). During the next two decades, the production declined to 10.63 million tons, area as well as yield declining in 1980-81 due to unfavourable monsoon rains. During the next decade i.e. ending 1990-91, the production reached a high of 14.06 million tons, area and yields both registering an upward increase. There was again a decline to 12.02 and 13.60 million tonnes during 1991-92 and 1992-93.

Note:E- Estimated

Table 7 – Production of Pulses¹⁶

It is apparent that production of pulses has been at best stagnating and its availability has really shown a decline. Although pulses have been on Open General License for imports even during the stricter IMPEX policy, the annual imports of pulses never exceeded one million tons.

Two special schemes, namely, National Pulses Development Program (NPDP) and Special Pulses Development Program (SPDP) have also been taken up for implementation since 1990. Serious efforts are being made in the area of R & D so that high yielding varieties, both for irrigated and dry farming could be evolved and popularized. The increasing trend in production seen since 1990-91 augurs well for the country but lot of ground is yet to be covered. Even though increase in the production of fish, eggs, milk and milk products has added to availability of protein, pulses are going to continue as the single most major source for supply of protein. In fact, this poor man's protein has such importance in the diets of Indians that a meal is commonly called Dal-Roti (pulse plus flattened bread) or DalChawal (pulse plus rice).

Fish

Fish production has gone up substantially as can be observed from Table 8 –Production of Fish (Inland +Marine) ¹⁷

Note: E - Estimated

Table 8 –Production of Fish (Inland +Marine) ¹⁷

The production of fish, taking together inland and marine fishery, is thus steadily rising and for the latest available three year period, it has gone from 0.75 million tonnes in 1950-51 to 5.65 million tons in 2001-02. No specific RDI has been prescribed with respect to the fish but its availability will certainly contribute to the overall dietary intake, especially in respect of protein, oil and some other micro nutrients.

Meat

Production of meat, from all sources has increased more than five-fold in the period 1971-1992 as can be seen from

Table 9 - Production of Meat ¹⁷

The availability of meat has thus, shown a steadily increasing trend. This increased availability would make up for decline in per capita availability of pulses and at the same time provide more easily absorbable protein to body.

Milk

It has often been said that India has recently gone through a white revolution. The "Operation Flood" strategy of cooperatising the entire milk production programme not only paid rich dividends in Gujarat State but was duplicated in many other States successfully. There has been good progress in cross breeding of cows and provision of extension as well as veterinary services. This, coupled with entry of private sector in the dairy industry, starting from captive hinterland, has resulted in sharp increase in milk production, especially from 1990-91, as can be observed from

Table 10 – Milk Production ¹⁷  

Egg Production

Impressive progress has also been made in poultry and production of eggs, as can be seen from Table 11 - Production of eggs

Table 11 - Production of eggs ¹⁷

In order to further increase production of this commodity, which is becoming very common even amongst poor household, especially amongst slum dwellers, laborers and migrant laborers, a number of poultry estates are planned to be set up. Tremendous progress has been made in the southern state of Andhra Pradesh, which now supplies eggs to at least half of the country. Similar progress is sought to be duplicated else where.

Edible Oils

India has been importing edible oils on regular basis from 1980-81 to 1990-91. The annual imports were as high as 1.6 million tons in 1983-84 and touched a peak of 1.8 million tons in 1987/1988, when the drought had badly reduced the production of oilseeds. However, in the meantime, India had launched a Technology Mission on Oilseeds in May 1986 to harness latest technology in all aspects of oil production, starting with production and going on to processing and marketing. Schemes like price support operations and market intervention were also started. A special Oilseeds Production Programme (OPP) is also being implemented in 324 districts in 21 oilseeds producing states in the country. The programme covers nine oilseeds.

The results were quite dramatic. The dependence on imports started getting reduced after 1987-88. In 1988/1989 the production of nine oilseeds jumped to 18.03 million tons from 12.63 million ton in 1987/1988. It remained at the high levels in the subsequent years and crossed the 20 million tonnes mark during 1992-93Even though the availability of edible oils has improved dramatically in recent past, it is still short of nutritional requirements. Refer to Table 12 – Production of Edible Oils²⁴

Table 12 – Production of Edible Oils²⁴

Sugar and Jaggery

Sugar and jaggery are important sources of energy, especially in rural areas. In urban areas also, the poor migrant families working at construction sites and moving from place to place along with shift of work or living in slums have started taking bread and tea for breakfast in a big way. In fact, very sweet tea is not only a glass that cheers but provides energy for the tough work these migrant laborers do. In urban slums too this brew is very popular. We can study the progress made in production of sugar and jaggery by examining the sugarcane production. It exhibits an increasing overall trend even though there have been sharp fluctuations as can be seen from the Table 13 – Production of Sugarcane ¹⁶

Table 13 – Production of Sugarcane ¹⁶

Per capita consumption of sugar has steadily been going up from 2.5 kg./capita/year to reach 13 kg. during 1991-92. In fact, on the basis of ICMR norm of 31 gins/capita/day, the annual consumption should be only around 12 kg. This indicates excess consumption of sugar, which is not such a nutritious item (containing only energy).

Potato, Sweet Potato and Tapioca

These are important supplements to food intake for poor people, especially the tapioca. As can be noticed from the table below, while the production of potato has made a quantum jump since country's independence, whatever data is available for sweet potato and tapioca indicates stagnation in the production of these two food items. Of course, potato received lot of attention from research and extension workers and it has now become an important cash crop with huge production in some areas creating problems of surplus, notwithstanding establishment of a number of cold storage. Sweet potato is grown only as a risk crop on rain fed marginal lands and tapioca is popular in only a few states. The position regarding production of potato is shown in Table 14 – Production of Potato, Sweet Potato & Tapioca¹⁶

Table 14 – Production of Potato, Sweet Potato & Tapioca¹⁶

Fruits

It is only recently that serious attention is being given to improve production, processing and marketing of fruits. At the central level, the National Horticulture Board has been set up to coordinate all the activities and give the necessary push to all the horticulture related activities. As per the Board, the production of fruits is as shown in Table 15 – Production of Fruits²³

Table 15 – Production of Fruits²³

It appears that production of fruits registered a quantum jump in 1991-92 and it is hoped that this progress will be maintained. Availability of fruits will greatly help in improving the nutritional status of people, especially children, who tend to get a bigger share of fruit consumption within the family.

Conclusion

By combining the demand and supply projections from previous sections, we can now assess the likely cereal gaps for India in 2020. These gaps are reported in Table 16 – Demand & Supply Projections¹ for some of the more important demand and supply scenarios.

The Rosegrant⁶ & IMPACT ⁷ models show that whether India will have a manageable cereal demand in 2020 depends critically on what happens to the livestock sector. Rapid economic growth, particularly if it is accompanied by significant shifts in consumption patterns and reductions in malnutrition, could lead to escalating demands for milk, eggs, and meats.

Table 16 – Demand & Supply Projections¹

These in turn would require changes in livestock production methods, with increasing reliance on cereals for livestock feed.  

The per capita consumption of livestock products is currently very low by international standards, and also falls well below the standards set by the Indian Council of Medical Research. Any significant correction of these abnormalities would quickly lead to larger cereal gaps than what the modellers have estimated.

Given plausible assumptions about how expenditure elasticities and livestock-feed coefficients will change over time and per capita income growth of 3.7 percent or more per annum, India may need nearly 300 million tons of cereals by 2020. But short of significant changes in the agricultural sector, the country's production capacity is not likely to exceed 260 million tons (net of seed and waste). This implies a cereal gap (excess demand over domestic production) of 36 million tons or more per year by 2020.

The cereal gap would be even larger if India were to become a TIGER economy. For example, with 6 percent growth in per capita income each year, the gap could reach 115-142 million tons by 2020. Even if the Indian economy slows down to more historical rates of growth, the cereal gap could grow to as much as 25 million tons by 2020.

These findings contrast sharply with results from several other studies, which are much more sanguine about the prospects for continued national self-sufficiency in cereals. The IMPACT model projects a market clearing situation in which domestic production and demand are almost in balance at 237 million tons in 2020.

Kumar¹⁸ also projects small cereal gaps for 2020. In his case, projected demand is 265.8 million tons and production is either 286.1 or 245.9 million tons (both adjusted for seed and waste), depending on whether growth continues unabated or whether it slows down, In the first case, India would have a cereal surplus of 20.3 million tons, but in the second case there would be a cereal gap of 19.9 million tons. Yet our higher figures for India involve less cereal (including feed grains) per person in 2020 than some other Asian countries are already using today.

Of course, large cereal gaps could never materialize in a market economy. There would be an inevitable upward pressure on prices, which would serve to close the gap by dampening demand, inducing new sources of supply, and encouraging more imports. Price increases would be particularly hard on the poor and, as in the past, it is likely that the government would give continuing priority to either keeping basic food prices at acceptable levels or targeting assistance to the needy. Either approach would help maintain cereal demand. The gaps would therefore have to be filled through increased domestic production or imports. Imports could take the form of rice and wheat for human consumption, livestock feeds (such as maize), or livestock products themselves.

Policy Implications

The likelihood of a rapidly growing demand for livestock products and feed grains presents an important opportunity to increase incomes and employment and to reduce poverty in rural areas through additional investments in agricultural development. There is considerable scope for additional agricultural growth that is economically efficient, that would better exploit the country’s comparative ad vantage, and that would contribute to the generation of rural employment and poverty alleviation. This would require additional policy reforms and market liberalization to bring price ratios more in line with world prices, and additional public in vestment in agriculture and rural areas.

The policy reforms begun in the early 1990s have yet to be fully completed for many domestic agricultural markets. Many farmers have been squeezed between the rising costs of key in puts (as subsidies have been re moved) and declining farm gate prices. The latter have been aggravated by restrictions on ex ports, cheap imports, and excessive regulation of agro-industry¹⁹ Completion of the re form process with full liberalization of domestic markets, foreign trade, and agro-industry would improve the terms of trade for many farmers and encourage greater cereal and livestock production. Such growth could include many of the poorer rain fed areas²⁰.

As in the past, public investment in rural in farm infrastructure, agricultural re search and extension, and the education and health of rural people will continue to play a key role in deter mining the rate of agricultural growth²¹.

It will also require that rain fed areas receive a larger share of any additions to public investment. There is clear evidence that infrastructure investments have been biased to wards irrigated areas, and this has compounded the natural advantage enjoyed by irrigated over rain fed areas²². Recent evidence suggests that while in the past these investments have yielded the highest returns in irrigated areas, this has been less true in the post-Green Revolution era ²¹. In fact, the marginal returns to several infrastructure investments are now higher in many rain fed areas, and they also have a potentially greater impact on reducing rural poverty. This suggests the possibility that in vestment in infrastructure in rain fed areas can offer India a “win- win” strategy for addressing productivity and poverty problems.

The Indian government already spends more on agriculture than almost any other Asian country.  But the lion’s share of these expenditure subsidies are for farm inputs, particularly fertilizers, credit, water, and electricity. While once important for helping to initiate the spread of the Green Revolution, these subsidies contribute very little to agricultural growth today^{19, 20}. As such, there is considerable scope for achieving greater growth in agriculture simply by redirecting public funds that are al ready ex pended on the sector. There is also scope for reducing the cost of providing public goods in rural areas by

a)     forming new partnerships between the public, private, and NGO sectors to take better advantage of alternative and lower cost sources of supply of public goods; and

b)     improving the efficiency of public supply institutions through improved management, more trans parent procurement and operational procedures, and greater accountability to end users¹⁹.  

A combination of greater productive investments plus more favorable terms of trade for agriculture could bring about an additional 20 – 30 million tons of cereals by 2020. With parallel increases in live stock productivity, the projected food gaps should be manageable.

The policy alternative would be to fill the cereal gap through increased imports. The importation of 36 – 64 million tons of cereals (or its equivalent in livestock feeds or live stock products) would place a heavy bur den on the country’s trade balance and divert funds from more economically productive investments. It would also do much less to alleviate the most crucial gap of all—the growing gap in incomes, wealth, and opportunity between India ’s rural & urban areas.

 References and Footnotes

1. G. S. Bhalla/ Peter Hazell/John Kerr 1999.Prospects for India 's Cereal Supply and Demand to 2020: Published by International Food Policy Research Institute (IFPRI)

2. Census Bureau of India

3. Rao, C. H. H. 1975. Technological change and distribution of gains in Indian agriculture. New Delhi : Macmillan

4. Radhakrishna, R. and C. Ravi. 1990. Food demand projections for India . Hyderabad , India : Centre for Economic and Social Studies.

5. Sarma, J. S., and V. Gandhi. 1990. Production and consumption offoodgrains in India : Implications of accelerated economic growth and poverty alleviation. Research Report 81. Washington , DC : International Food Policy Research Institute.

6. Rosegrant, M. R., M. Agcaoili andN. Perez. 1995. Global food projections to 2020: Implications for investment. Food, Agriculture and the Environment Discussion Paper 5. Washington , DC : International Food Policy Research Institute.

7. IFPRI's International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT) incorporates the effects of key factors on food supply and demand to 2020—population, income growth, urbanization, the rate of increase in food production due to technological change and productivity growth, prices of commodities, and the response of supply and demand to prices. The "baseline" results show an aggregate global food supply and demand picture that is fairly good, if rates of investment in agricultural research and development are maintained. The IMPACT projections used a base year of 1993, were developed in 1995, and were reported in Rosegrant et.al. (1995). The IMPACT model is annually reviewed and updated as new information becomes available. Results from later runs of the model may vary from those presented and described here.

8. Ruddar Datt, Business Line, The Hindu, Published 14^th August 2001 . http://www.thehindubusinessline.com/businessline/2001/08/14/stories/041420ru.htm

9. Government of India . 2001. Population projections for India and states 1996- 2020, Re port of Technical Group on Population Projections. New Delhi : Registrar General.

10. Repetto, R. 1994. The “second India ” revisited: Population, poverty and environmental stress over two decades. Washing ton, DC: World Resources Institute.

11. Sarma, J. S., and V. Gandhi. 1990. Production and consumption of food grains in India : Implications of accelerated economic growth and poverty alleviation  Research Report

12. Bansil, P. C. 1985. Feed, seed and wastage rates: A regional study. New Delhi : Techno Economic Research Institute.

13. P.C. Joshi , India 's Economic Development Strategies, Ed. Mongia & Vyas, 1986

14. United Nations: Food and Agricultural Organisation: Mediabase: http://www.fao.org

15. Economic Survey of India 2004 – 2005. http://indiabudget.nic.in/

16. Directorate of Economics & Statistics, Ministry of Agriculture

17. Department of Animal Husbandry

18. Kumar, P. 1998. Food demand and supply projections for India . Agricultural Economics Policy Paper 98- 01. New Delhi : Indian Agricultural Research Institute.

19. World Bank 1999. Towards rural development and poverty reduction. Paper presented at the NCAER–IEG–World Bank conference on “Re-forms in the Agricultural Sector for Growth, Efficiency, Equity, and Sustainability,” April 15–16, New Delhi , India .

20. Gulati, A., and A. Sharma. 1997. Freeing trade in agriculture: Implications for resource use efficiency and crop ping pat tern changes. Economic and Political Weekly, December 27, A155–A164.

21. Fan, S., and P. Hazell. 1999. Are re turns to public investment lower in less favoured rural areas? An Empirical Analysis of India . EPTD Discussion Paper No. 43. Washing ton, DC: International Food Policy Research Institute.

22. Binswanger, H., S. R. Khandker, and M. Rosenzweig. 1993. How infrastructure and financial in stituations affect agricultural output and investment in India . Journal of Development Economics 41(2): 337–366.

23. Food & Agricultural Organisation of the United Nations. http://www.fao.org/

24. Ministry of Consumer Affairs, Food & Public Distribution, Department of Food & Public Distribution, New Delhi .