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With robust macro-economic fundamentals, India is among the world’s fastest growing significant economies. GDP growth, rising incomes, population pressure, age profile and appetite for consumption have all combined to drive demand up for various goods and services. Food, of course, tops the list.

Despite an impressive show on the economic front, India’s development indicators are far from satisfactory. The proof of this comes from the country’s low ranking in the Human Development Index and high rank in the Global Hunger Index.

A pernicious but under-appreciated challenge India currently faces is pervasive malnutrition or specifically, under-nutrition. This is prevalent especially in the rural areas and among the urban poor.

The National Family Health Survey revealed that as many as 42% of children below the age of five are under-weight with a high prevalence of stunting. An alarming 70%t of women are anaemic. They include pregnant women and lactating mothers. Protein and calorie deficiency have led to acute malnutrition.

Under-nutrition exerts long-term adverse effect on human health, impairs labour productivity and general well-being. Perpetual under-nutrition results in low resistance to infections and increased morbidity. It imposes higher healthcare costs on individuals and, worse, imposes huge hidden, unaccounted and unrecognised losses on society and the nation at large.

Within the country, we find stark inter-state variations in the nutrition profile of people. For instance, Tamil Nadu, Kerala, Goa and Punjab do reasonably well, while the nutrition profile of states like Uttar Pradesh, Bihar, Madhya Pradesh and Rajasthan leaves much to be desired.

Improve food-support schemes

India risks a move toward nutrition insecurity if the issue of under-nutrition is not addressed with the great urgency it deserves. For a rapidly emerging economy like India with aspirations to become a developed economy, it is critical that extant nutrition challenge is recognised at the highest policy-making level and steps are initiated to ameliorate it.

To address malnutrition, the government runs several schemes, but these are fragmented and there is little coordinated action among different ministries that implement different schemes. As a result, funds are frittered away and results on the ground are less than desirable. All schemes to address malnutrition need to be dovetailed so as to deliver better service and capture value.

Inflation hurts, especially food inflation; and it hits the poor the hardest. The poor need food and nutrition security. In a price conscious market such as India, high prices often lead to demand compression, especially among the vulnerable sections of the population – a section that suffers from under-nutrition and desperately needs to consume more oils and fats.

One way in which India’s nutrition security can be advanced is through inclusion of edible oil for supply under the Public Distribution System (PDS) or the National Food Security Act.

Of the 250 million families, as many as 150 million families deserve to be supported with wholesome but economically priced food. Currently, there is access to rice, wheat and sugar under the PDS. This list should be expanded to include edible oil and pulses. Supply of even 1kg of fortified edible oil per family per month will go some way in addressing the nutrition issue.

For the purpose, I estimate the quantity of edible oil involved at approximately 2 million tonnes a year which is about 10% of India’s annual consumption. The supply of packaged edible oil (in half- or one-kilo packs) will ensure that consumers get unadulterated safe edible oil to meet at least a part of their nutrition requirement.

Without doubt, there will be political, social and economic benefits that would flow from such a policy initiative. To be sure, supplying edible oil through the PDS would be nothing new for India.

Until 2002, consumers had benefited from supplies of economically priced refined palm olein. In its wisdom, the then government decided to discontinue the service. It is time for revival of the scheme. If it involves some subsidy, so be it.

Low food self-sufficiency

It is often said in jest that the Indian government does the most rational things, but only after exploring other possibilities. It looks like policy makers are still exploring. One reason could be that, unlike pulses – the shortage and strident price rise of which over the past year has put the government on the defensive – edible oil prices have not evoked any strong consumer response.

But it may only be a matter of time. Vagaries of nature and vicissitudes of the market are less predictable. What happened in the case of pulses can happen in edible oil too. So, this article should be treated as a wake-up call.

India’s self-reliance is low and dependence on the world market for meeting domestic shortfall is rather high at about 65%. This makes the country tremendously vulnerable to external factors over which it will have little control. This risk needs to be mitigated.

The oilseeds and oils sector deserves policy support, research support and investment support. Lessons from the so-called ‘dal-shock’ lend a sense of urgency to designing a progressive long-term policy for the country’s oilseeds and oils sector, so as to make it less vulnerable and more competitive.

Trade and industry associations have an opportunity to demonstrate their vision and strategic action plan for the sector by providing policy inputs.

G Chandrashekhar
Global Agribusiness and Commodity Sector Specialist

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