Impact of the Indian food and nutrition policy on foodgrain consumption and imports

Gnanaraj Chellaraj, Purdue University

Abstract

The effects of India's food and nutrition policies on foodgrain consumption and imports are evaluated by state for 1956-85. The public foodgrain distribution system (PDS) and its interrelations with the consumption of foodgrains in the commercial market are emphasized. For all India, subsidized rice accounted for 6% of total consumption in 1957 and rose to 19% in 1986. Subsidized consumption of wheat rose from 39% to 46% during the same period. Only wheat and rice are subsidized through the PDS. Millet and sorghum consumption showed a steady decline in most states. There was considerable year-to-year variability among states in rice and wheat retail prices and consumption. The zoning policy accentuated the variability by forbidding private interstate movement of foodgrains. The policy prevailed in various forms between 1962 and 1977. Urbanization significantly affected the distribution of wheat and rice through the PDS, although there was considerable variation among states. This finding is consistent with the general policy of distributing subsidized rice and wheat primarily in the urban areas. The single exception is Kerala, in which both rural and urban areas are well-served by the PDS. The previous year's commercial market consumption was important only for wheat. In the rice and wheat commercial markets, the factors significantly associated with consumption were adjusted income (income less expenditure on subsidized foodgrain) and issues through the PDS. Subsidized grain substituted to some extent for commercial market purchases in most states. For all India, the replacement of subsidized rice for commercial market rice was estimated to be more than 50 percent and for wheat about 35 percent. Income considerably influenced the consumption of rice and wheat in the more prosperous than in the less prosperous states. For millet and sorghum, the retail prices of subsidized rice and wheat and income were the significant factors affecting consumption. In most states considerable substitution was found between millet and sorghum and subsidized foodgrains. Sorghum was considered an inferior good. Income had a larger positive influence on millet consumption in the less prosperous than in the wealthy states. For the country as a whole, imports of rice and wheat were both inversely related to import prices and positively related to income. Other factors were not found to be significant.

Degree

Ph.D.

Advisors

Farris, Purdue University.

Subject Area

Agricultural economics

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