Information on food and public distribution

Information on food and (targeted) public distribution systems (PDS / TPDS) and their various incarnations can be found here (official government of India website). Many more relevant documents can be found on the internet, e.g. this Woldbank study which exposes major flaws ion the PDS system.

A detailed study on the Wheat and Rice Sector policies in India including data can be found here. There, the dynamics of governmental programs for the redistribution of staple food is nicely discussed and put into the larger perspective of policy effectiveness. Also, the authors develop a multi-regional partial equilibrium model of wheat and rice sectors with which they study impacts on commodity markets of alternative farm support programs. The model is described in greater detail in Jha and Srinivasan (2006) and Jha and Srinivasan (2004). what follows is a short condensation of the article by Jha, Srinivasan and Landes (2007).

The goal of the government intervention programs (mainly food grain price support, procurement, storage and distribution) is simple, i.e. to redistribute food surpluses to deprived areas. However, increasing wheat and rice sector volatilities render the established system inefficient due to lacking responsiveness. A central question for ongoing research thus has become how to reform the distribution system so that distributive effectiveness by improved logistics, minimized storage holdings (and, for that, losses) relative to imminent and future anticipated excess demand as well as monetary efficiency can be attained.

The observed volatility increase gives rise to concern, namely that its causal factors are structural and not cyclical. These factors include a declining scope for further gains from existing HYV's, deteriorating soils and groundwater conditions as well as the reduced public investment in irrigation. However, wheat yields obtained in research farms show the potential for productivity gains of 25 to 50 percent relative to present levels. Certainly, ongoing degradation of natural resources (soils and water) declining public investments and only modest growths in private investments as well as suboptimal factor inputs into agriculture potentially threaten these potential improvements.

Both, input subsidies and excessive minimum support prices (MSP) are considered to be prime culprits of environmental degradation. Furthermore and since the rise of the MSP relative to costs of production, both governmental policies have started to favor producers in high output states whereas consumers and the state were not benefiting from these developments. Increasing MSPs were pushed through by the powerful agricultural lobby as a response to decreasing world market prices.