Discussion Paper
‘Game changing’ policies, actions & initiatives of the Government of India that shaped the path for a sustainable Food System
Backdrop
The background to this paper is the United Nations Food Systems Summit 2021 (UNFSS) and a review of the 'game changing' interventions that were identified and documented in the five theme documents prepared for this Summit. In turn, it triggered a recap of the various policy actions taken by India in developing its current day Food System. It was seen that many of the initiatives taken in India have been along the lines that fulfil the criteria laid down by the UNFSS.
The UNFSS has defined three primary criteria to prioritise ‘Game changing’ policies, actions & initiatives across the identified action areas. These criteria are Impact potential at scale; Actionability (taking into account politics, capacity, costs, tools); and Sustainability (including delivering beyond 2030). Further, it suggests ‘game changing’ solutions should support towards gender equity, empowering youth, and create synergies.
The concept of 'Food System' - the complex web of activities involving the production, processing, transport, and consumption of food - is about adopting a system approach to how we think and act in relation to food. Note, that while the Food System is inherently linked with agricultural activities, it does not include all of agriculture.
This discussion paper, therefore, narrows down on those interventions by the Government of India that focus more on food production, distribution, consumption and the aspects that relate closely to the food system. Whereas the policies and initiatives discussed herewith, may not have originated with a holistic food system in mind, this narrative in hindsight, takes liberty to lay out how a system approach did manifest, nonetheless.
India Context
On achieving independence in 1947, the Union of India went through an intense period of turmoil. The erstwhile commercial thrust by the previous regime to produce and supply non-food crops, primarily cotton, to British mills, had weakened food production in a some regions. Food insecurity and a debilitating feudal agricultural ecosystem was the state of affairs.
It was a time of acute food deficit, and foreign food grants had to be availed. Food security was accorded the highest priority and boosting food production a key policy thrust. The ensuing efforts resulted in notable outcomes at the aggregate level, but the benefits were not evenly distributed and new challenges arose. Nevertheless, 75 years since, India is no longer fed ‘ship-to-mouth’ and is now among the few net exporters of food, ranking very high in most production measures. Today, an Indian citizen’s right to food has legal title and implemented wholesomely. The interlude witnessed various game-changing interventions, to suit the need of the hour and the available knowledge-base and capacities at hand.
Along this path, regular review of past actions and suitable course corrections were needed - some interventions that were once a game-changer, need not remain relevant in when circumstances change, even if they came to be perceived as the norm. To deal with such vestiges of past policies another set of game-changing decisions were necessitated, so that progress would not stagnate along patterns of linear focus, but could adopt a system approach, and to promote the agenda of holistic development. Many of the past game-changing policies, actions and initiatives, are highlighted and contextualised in this paper, as well those that now envision advancements in India’s Food System to extend beyond 2030, towards an even more egalitarian, sustainable and gainful future.
This discussion paper narrows on those particular game-changers that directly affected India’s approach to the food system, had higher impact, actionability and sustainability, and predicated a transformation of the status quo. The narrative presents such interventions along sequential timelines and where relevant with related reconsiderations.
Early Game Changers by India
In line with the UNFSS criteria for ‘game changing’ solutions, this section narrates the key interventions related to the food system that were initiated by the Government of India, after independence and until 2015.
Ecosystem and Institutions
At independence, a highly food insecure India had insufficient irrigation systems, its cultivators were largely bonded to large landlords and suffered a domineering power structure which controlled agricultural land and markets. Shortly after, India enacted the Zamindari Abolition Act (1950), and disrupted the prevailing medieval ecosystem in its agricultural landscape. The system had carried forward a colonial mindset and power nexus that restricted economic freedom of small farmers. The Act enabled states to implement land and tenancy reforms which drastically transformed rural power relations and millions of cultivators were freed of the punitive demands and fetters that indentured them to a feudal nexus of land-owners. Coupled with the abolishment of begari (bonded labour), common land and resources like grazing land, wells, forest area, were freed of control of the feudal zamindars to become community property. The backdrop was set for an enabling environment where the underrepresented were provided rights and able to exercise them. Besides conferment of land rights to tenant farmers and sharecroppers, taxes on digging wells were repealed and the livelihood status of cultivators given new relevance. Assured title and rights to land, cultivators could make improvements to their farms and diversify with a higher level of confidence into livestock rearing and crops of their own choice. Other land reforms followed, such as states imposing a ceiling on the amount of land a person could own, to result in a more equitable distribution of agricultural land.
However, such reforms also required a market system that could provide millions of small farmers a fair price, through an auction mechanism. The mid-1950s saw the launch of Agriculture Produce Market Regulations with the state governments enacting their Agricultural Produce Market Committee (APMC) Act, to implement what has resulted in the current day network of more than 7000 primary wholesale agricultural market premises run by committee (APMC markets). For ease of governance, farming areas were assigned under jurisdiction of the APMCs, who could plough back funds to develop the market zones under their care. These APMC markets served as assembly points for farmers and licensed traders, where farm produce underwent a competitive auctioning process. The farmers could benefit from this price discovery mechanism and as the transactions were conducted within these market premises, they could be easily regulated and monitored by the state governments.
The 1950s was a time of uncertain supplies of various commodities, including foodstuffs, and opportunistic speculators could manipulate consumer prices by way of hoarding stock, to aggravate any prevailing supply shortfall. Hence, the Government of India passed the Essential Commodities Act (1955) (ECA), which empowered it and state governments to regulate and control the supply chain (production, storing, distribution) and prices of various commodities declared essential. Administered through Control Orders, the government could impose stock limits, prohibit withholding from sale, require to sell in whole or part of stocks held, regulate or prohibit any commercial or financial transaction of essential commodities, undertake search and/or seizure of such commodities, etc. This was done to curtail any tendency to buy low and hoard essential goods for later onward transaction, and thereby ensure a steadier state of supply of much needed essential goods and foodstuffs to consumers. The ECA helped ensure that the post-production food chain operated to maintain a steady supply from farm-gate to consumers.
These two Acts, APMC and ECA, were game-changers at that time, impacting the way the market ecosystem had functioned. At that time, since the country’s food supply was in deficit to demand and all production could be easily and readily absorbed, the APMC market network could easily facilitate the food supply chain. However, progressive growth in production changed the market dynamics in the future, and these two interventions required adjustments, which are discussed later in this paper.
In this post-independence period, a few other actions were commenced, including large scale public investment in irrigation sector, to build dams, canals, tube wells, etc., to augment the power and irrigation systems. All of these greatly empowered the larger agricultural sector and thereby the food system. Meanwhile, for a much-needed rapid breakthrough in food production, the government identified specially endowed areas and commenced the Intensive Agricultural District Programme (IADP) in 1961. This was preceded by the creation of Community Development Block in 1952 and National Extension Service Blocks in 1953. The Intensive Agriculture Area Programme (IAAP) was launched in 1965. These culminated in disseminating the green revolution technology during 1965-67.
For a game changing impact in support of smallholder farmers, the Government also enacted the National Cooperative Development Corporation (NCDC) Act (1962). This initiative resulted in bringing institutional focus on supporting and developing cooperatives, and a statutory corporation was created which is still regarded a key enabler of the cooperative sector. This period also saw the Government of India enact the Warehousing Corporation Act (1962) and pass the Cold Storage Order (1964), so that the post production storage aspects of the food chain could also be taken up as a thrust area. Earlier, in 1958, the National Agricultural Cooperative Marketing Federation of India (NAFED) had been constituted to promote and develop marketing, processing and storage of produce, besides undertaking wholesale or retail trade as required.
The post-independence phase saw initial social reforms, the restructuring and organising of the food production system along more equitable lines. Hundreds of millions of cultivators were impacted with unfettered access to agricultural land, while a mechanism to protect producers from existing market monopolies was rolled out. An agricultural market system that regulated the distribution of commodities was initiated, and steps also taken to ensure consumers were not artificially denied access to essential food items. These initial polices set the framework to revamp the production, post production and livelihood status of food producers. They positioned India to quickly step into the next phase of game changing actions, which is now commonly called the Green Revolution.
Supporting Production
The policy initiatives before the green revolution fostered a positive growth in food production, though it was felt the country still faced a shortfall in foodgrains, mainly wheat; the growth was unequal across regions and primarily in well-endowed and irrigated areas. The Multiple Cropping Programme (MCP) was launched in 1967-68 and dovetailed with the High Yielding Variety Program (HYVP) to take advantage of short duration varieties in areas with limited irrigation facilities. To incentivise continued growth in production of staple foodgrains, multiple statutory bodies were strengthened or founded in this period, including the Agriculture Prices Commission (APC) and the Food Corporation of India (FCI) in 1965, the Central Warehousing Corporation (CWC) was founded, and a network of multiple State Agricultural Universities was initiated. FCI is tasked with public procurement of foodgrains and till today is counted among the largest corporations in the country. It purchases up to 20 per cent of the country’s wheat and paddy output from farmers, every year, at prices notified by the Government.
In the first weeks after independence, India named the Ministry of Food on 29 August 1947. In February 1951 it was combined with the Ministry of Agriculture to constitute the Ministry of Food & Agriculture. Various iterations followed and currently India has a Ministry of Agriculture & Farmers Welfare, the Ministry of Consumer Affairs, Food and Public Distribution and the Ministry of Food Processing Industries who are the front-line agencies related to food. However, the food system closely involves with other ministries such as for rural development, education, health & family welfare, water resources, transport, skill development, environment, forestry and climate change, power, and others. Numerous specific and important initiatives were taken by these various ministries, and departments and agencies under them; a quick review indicate nearly 300 in number.
Commencing in 1966-67, the Government notified two types of prices, namely, (i) Minimum Support Price (MSP); and (ii) Procurement Price (PP). The MSP was intended to serve as a floor price and an assurance to farmers against market and the PP was used to undertake purchase by public agencies. Normally, the procurement price was higher than MSP, but lower than the open market price. This provided the farmer the choice to avail either the price in open market, or sell to the public agencies. This public procurement system bolstered farmers to produce the much-needed foodgrains and the green revolution that led to basic food self-sufficiency. Subsequently, and as in practice today, MSP itself is the Procurement Price and is now perceived as a benchmark price. The APC was restructured as the Commission on Agricultural Costs and Prices (CACP) which currently recommends the MSP for 23 crops, of which 21 are food commodities - comprising 7 cereals (paddy, wheat, maize, sorghum, pearl millet, barley and ragi), 5 pulses (gram, tur, moong, urad, lentil), 7 oilseeds (groundnut, rapeseed-mustard, soyabean, seasmum, sunflower, safflower, nigerseed), and 4 commercial crops (copra, sugarcane, cotton and raw jute) every year. The government considers their recommendation and accordingly notifies the MSP for implementation.
As millions of cultivators, now entitled with land ownership, benefited from production growth and public market interventions, the rural economy grew and also needed organised access to basic financial and banking services. In 1975, the government established the first set of five Regional Rural Banks (RRBs) with the purpose to include rural areas into the economic mainstream. In 1976, the RRB Act was passed to strengthen this initiative and today the country has 43 RRBs to provide sufficient banking and credit facility for agriculture and other rural sectors. The ownership structure of the RRBs is shared between the Central Government (50%), State government (15%) and sponsoring Nationalised Banks (15%). Subsequently, in 1982, the National Bank for Agriculture & Rural Development (NABARD) was established under the Ministry of Finance, entrusted with matters concerning policy, planning, and operations in the field of credit for agriculture and other economic activities in rural areas of India. NABARD replaced three erstwhile agencies in this field and today is one of the premier agencies that work with other global developmental organisations in the field of agriculture and rural development, and serves as the apex financing agency for institutions that provide investment and production credit for developing rural areas. Government of India accorded agriculture and allied sectors special dispensation that requires all commercial banks to provide a specific portion of its lending, called Priority Sector Lending (PSL). This continues to date.
Govt.’s procurement mechanism for basic food commodities greatly incentivised the output and led to the country becoming food secure and the ability to build strategic food buffers. Reforms and initiatives in the banking system eased the availability of credit to the food system. The country developed a large education and extension system and the geographic spread of agriculture research centres. Laying appropriate emphasis on financial inclusion, the Government of India set forth the long-term facilitation mechanism for the key stakeholders of the food system, not only to ease their access to credit to support basic operations, but also for modernisation and diversification.
The period 1991 to 2015 was when past learnings were consolidated and emerging technologies and knowledge got assimilated. These encompassed elements of nutritional health, sustainability, food safety, space technology and the like. Some notable actions in this period were taken to address policy anomalies in light of the new knowledge and changed circumstances. Various changes were required in the new situation and a few were implemented. The Cold Storage Order (1964), originally intended to support farmers, was seen to hinder future development and repealed in 1997. By now, the APMC market system also begged changes, and in 2004 revisions to the regulated agricultural market system, by way of a model APMC Act, was released. The Food Safety and Standards Act (2006) was passed which led to the creation of the apex Food Safety & Standards Authority. The National Rainfed Area Authority was established in 2006 to bring convergence within and among agricultural & wasteland development programs, covering all aspects of sustainable and holistic development and livelihood systems approaches in rainfed areas. With purpose to modernise agricultural warehouses, the Warehousing Act (2007) was passed and the Warehousing Development Authority (WDRA) established.
India could claim basic food security by 1970s, with high yielding variety seeds of the Green Revolution resulting in a major boost in wheat and paddy output, even if in irrigated regions. By 1970, the milk sector was undergoing a revolution too, and further bolstered by the initiative called Operation Flood, launched in 1970. The result, called the White Revolution, was a highly successful dairy cooperative movement that helped the country surpass and maintain the mantle of the world’s largest producer of milk, ever since 1997. The initiative was executed by the National Dairy Development Board (NDDB), which was setup in 1965 with the purpose to promote, finance, organise and support producer-owned and controlled organisations. By the close of last year, NDDB reported a network of 194,000 dairy cooperative societies with a cumulative membership of 17.22 million milk producers. These are associated with milk pooling points at village level and the subsequent supply chain of milk. India currently produces about 195 million tons of milk annually and with a direct impact on the protein needs of a country with a predominantly vegetarian diet. A few other initiatives are also clubbed and labelled as revolutions and categorised colourfully. These are mentioned here as the Pink, Blue, Yellow and Golden revolutions.
The pink revolution was initiated in the late 1970s when various schemes and programs were initiated to focus technological support to the meat and poultry sector. Increasing onion production and of prawns was also taken up. As a result, in 2014 India surpassed Australia and Brazil for the first time to become the world’s largest exporter of bovine meat. Prawn became the primary export in fisheries and India produces upwards of 20 million tons of onion (26 million tons in 2019-20). The focus on fisheries was expanded and further emphasised in the mid-1980s bringing the blue revolution to aquaculture, inland and marine fish sources. This involved various interventions by government agencies to ease and improve access to technologies, credit, inputs and markets which collectively boosted productivity of the fisheries sector. The resulting impact is India became among the top five producers of fish and this sector is now the highest export earner among its agricultural exports.
Starting 1986, institutional support was also directed to oilseed production (mainly mustard and sunflower) under the National Oilseeds Mission. Called the yellow revolution, the key themes were policy support for market intervention, with a developmental thrust on production technology and area expansion. Steady progress was made to result in production increasing from 11 million tons of oilseed in 1986-87, to 34 million tons in 2019-20. The year 1986 was also when the Agricultural and Processed Food Products Export Development Authority (APEDA) was established by the Government of India under its then Ministry of Commerce to support market expansion into export destinations.
In 1998, the Kisan Credit Card (KCC) scheme was introduced, to provide credit to farmers, on the basis of their holdings for uniform adoption by the banks, for purchase of agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs. The scheme was extended for the investment credit requirement of farmers viz. allied and non-farm activities in the year 2004. The scheme provides farmers with short term credit and crop loans at reduced interest rate and further interest subvention for timely repayments. Participating financial institutions include Regional Rural Banks, all commercial banks and state cooperative banks. The loans can be availed free of collateral up to a specified amount, and the quantum of loan in the first year is assessed on the basis of cost of cultivation, post-harvest expenses and farm maintenance costs. The credit is in the nature of revolving cash account and the credit balance in the account earns interest as savings bank rate. Farmers having KCC credit and below 70 years age, are also covered by personal accidental insurance for permanent disability and death and for other risks.
Much of the aforesaid initiatives were rooted in fears of past food insecurity and were focused on enhancing production and productivity. When production gains were visible, especially in high value foods, the general mantra was to target better priced export markets. India’s food system was primarily focused on production and high-value production was export oriented.
Adapting to Demand
Indians were not typically wheat eaters, and their foodgrains consumption used to comprise rice, grams and nutritious cereals like maize, millets (earlier called coarse cereals). Apart from these cereals, milk, vegetables, fruits, meat and fish occupied a share of the food plate, depending on regional availability. In the 1960s, with the government providing subsidised inputs including seeds to grow wheat and buying back the crop at a guaranteed price, farmers began switching their farms from millets and gram to wheat production. This resulted in the decline in per capita availability of traditional cereals and increased availability of wheat (and subsequently of rice), and skewed the nutrition basket in favour of wheat.
However, by the 1990s the domestic consumer was becoming conscious of their nutritional intake. This manifested in a progressive preference for fruits and vegetables and the availability of horticultural crops became a focus area. Though the government had established the National Horticulture Board in 1984, the diversification into horticulture got a major fillip in late 1990s. Majority of horticultural crops are perishable by nature and require the cold-chain as a conduit to markets. It was increasingly clear that without suitable cold-chains, the gains in field productivity and production of perishable fruits and vegetables were taking a wasteful turn. This was when the erstwhile Cold Storage Order (1964) was observed to inhibit new investment in the refrigerated logistics chain. In 1997 its repeal was followed with a Central Government capital subsidy programme and these actions changed the scope and scale of future cold-chain development in India.
Seeing rising demand for fruits and vegetables, two mission-mode programs were initiated, the first in 2001, initially to promote horticulture in North-eastern states and then expanded to cover all Himalayan States (HMNEH). This was followed with a more empowered National Horticulture Mission (NHM), launched 2005-06, to support horticultural activities in all suitably endowed regions in the country, as well as the associated cold-chain and marketing system. NHM led the golden revolution that saw a rapid scaling up of demand and production of a wide variety of horticultural crops. The production year 2011-12 culminated with India’s horticulture sector surpassing the production of foodgrains; this lead has been maintained since. Notably, the annual State of Indian Agriculture 2012-13 report indicates the horticulture output of 257 million tons came from 23.2 million hectares and utilised only 1 per cent of irrigated area. In the period 2006-07 to 2011-12, the average productivity per hectare for fruits increased 14.5 per cent and of vegetables by 6.5 per cent, with the per capita availability of fruits and vegetables increasing by 23 per cent.
A key decision, to strategically allocate resources, so that horticultural production growth targets were matched with the associated target for development of logistics connectivity for perishables was taken. Commencing 2014, the share of funds allocated for horticulture area expansion was decreased by 50 per cent and that for post-harvest management increased by 300 per cent. Further, the support for cold-chain was rationalised with 13 new components added in the program. In just the following 2 years, between 2014 and 2016, under this scheme alone, more than 2 million tons capacity in 400 cold stores, and 70 integrated packhouses, 175 fruit ripening units, 50 reefer transport and 25 temperature-controlled retail outlets were installed. At the same time under MIDH, additional 73,400 hectares was developed under protected cultivation, 1360 nurseries were developed and accredited, besides expanding open field area under horticulture by 353,600 hectares and rejuvenation of 66,130 hectares of fruit trees. Other works include support for horticulture mechanisation, new water resources, capacity building, skilling, etc.
Today, India has the world’s highest capacity in refrigerated warehousing (approx. 160 million cubic metres) and is targeting a rapid scale up of the associated network of aggregation hubs at first mile, transport and distribution system. These economic activities are promoted in the hands of the private sector, farmer groups including cooperatives, and individual entrepreneurs. Growth in horticulture output also continues with horticulture production touching 320 million tons in 2019-20.
The food system has to cater to both fresh whole food and processed food items. Manufacture of convenience food items, fortified foods and extracts were supported by initiatives taken by the Government. Initially, the Ministry of Food Processing Industries focused on developing industry scale food processors, food technology parks and infrastructure creation. It led to a multitude of large processing enterprises, converting cereals and pulses into fortified meals, milling flour and rice, edible oil factories, convenience food items, beverages, and more. The industry was also encouraged for processing wine, potato chips, a variety fruits, vegetables, etc. Making pickles and jams from culled fresh produce, confectionary, frozen and ready to eat items, also got encouraged in the MSME sector.
Meat, poultry and fisheries food items for export is also processed and form a large share of food processing industries. Generally, the food processing industries in India primarily cater to domestic demand, yet this sector emerged as a net exporter. Towards the end of the Consolidation Phase (1991-2015), it is reported that India had more than 37,000 units registered as food processing factories. This number increased to 40,160 by 2017-18 and reported to engage 1.93 million persons. This picture excludes an estimated 2.45 million unincorporated enterprises, including cottage scale or micro scale units, that manufacture food and beverages.
In the dairy sector, while the bulk of milk is consumed in fresh liquid format, the large demand for butter, clarified butter (ghee), ice cream and other products led to a demand-led processing of milk. Surplus milk production is also processed into whole milk powder and skimmed milk powder. Much of dairy processing is handled by the cooperatives sector in India. The milk supply chain in India caters for both fresh milk demand as well integrates with the dairy processing units. Various reports indicate that food loss in milk is less than 1.5 per cent of the milk produced. The Economic Survey (2020-21) highlighted that in 2019-20 the per capita availability of milk was 407 gms per day, and with milk production expected to cross 205 million tons in 2020-21 (FY20: 198 million tons) the per capita availability is expected to cross 425 gms per day.
India is the global capital of spices and is the world's largest producer, consumer and exporter of spices. This food sub-sector traditionally comprises small landholders who have been positively impacted by initiatives of the Central Government. In 1987, country constituted the Spices Board of India, merging the erstwhile Cardamom Board and the Spices Export Council. A statutory body under the Ministry of Commerce and Industry (vide the Spices Board Act (1986)), its serves as a regulatory and export agency in regard to production and marketing of spices. The Board spearheaded activities that enabled India to reach a high level of excellence in this sector. India produces about 75 of the 109 varieties listed by the International Organization for Standardization (ISO) and accounts for half of the global trading in spices.
In 1976, the Government approved the final report of the National Commission on Agriculture (commissioned in 1970). Among other policy recommendations, it had emphasised the need to modernise livestock, fisheries and other allied sectors in agriculture, and for added focus of agricultural research, education & extension system on these sectors. This set the tone for public agricultural research and education to devote greater resources across the agriculture-allied sectors. As food demand diversified and expanded beyond cereals, so did the actions by the Government of India. India’s extensive public agriculture extension system scaled and adjusted to improve the productivity in other sectors, such as horticulture, animal husbandry, fisheries, beekeeping, etc. The private sector also supplements and supports extension services – to encourage this, 150 per cent of the eligible expenditure on agricultural extension projects was made deductible under Income Tax laws (Section 35CCC of IT Act) - the deductible is 100 per cent of such expenditure from 2021-22.
The National Livestock Mission, launched in 2014, is such an example. It establishes convergence and synergy among multiple ongoing Government programmes for sustainable livestock development. It dovetails a series of interventions to accelerate production of quality fodder and fodder seeds, promote applied research in prioritised areas of concern in animal nutrition and livestock production, provide for infrastructure and forward linkage for marketing, processing and value addition, to farmer’s enterprises, promote risk management measures including livestock insurance, and more.
Consumption and Access to Safe Food
In 1992 India ratified the United Nations Convention on the Rights of the Child (UNCRC) and under article 24 of UNCRC is committed to yield "adequate nutritious food" for children. On 15 August 1995, the Central Government launched its National Programme of Nutritional Support to Primary Education (NP-NSPE). Prior to this, similar initiatives were seen in 12 states of India, but by 1997-98 the NP-NSPE was being implemented all across the country. It then provided for a cooked midday meal, of 300 calories and 12 grams of protein, to children enrolled in government schools in classes one to five.
In 2007, the programme was restructured into the National Programme of Mid-Day Meals in Schools. By 2008, this Mid Day Meal scheme (MDM) covered all children studying in Government, Local Body and Government-aided primary and upper primary schools and those studying in centres supported by Education Guarantee Scheme (EGS) and Alternative & Innovative Education (AIE) Scheme and Madarsas/Maqtab, all across the country. The food norms were revised and the MDM also covers cost of essential infrastructure, cooking and hiring of cooks and helpers. In some States/UTs, additional provision of eggs, dairy products and fortified foods items is also seen.
In 2019-20, the scheme covered 11,19,724 institutions enrolling 11,80,16,529 children. The budgetary outlay in 2020-21 for the MDM scheme is Rs 12900 crore (USD 1.82 billion).
Even prior independence, and especially between the two World Wars, a food rationing system existed In India with the sale of rationed cereals at a ‘fair price’ undergoing various iterations. The food shortages in 1950s, brought back focus on a structured Public Distribution System (PDS), originally to manage scarcity of foodgrains in urban areas. The PDS was extended to tribal block and areas of high incidence of poverty in the 1970s and 1980s. In 1992, to strengthen and streamline the PDS, a Revamped Public Distribution System (RPDS) was launched. Shortly after, so that the PDS could better target the poor, the Government of India initiated the existing Targeted Public Distribution System (TPDS) scheme in June 1997.
In order to support the targeting of the food subsidy, a scheme called "Antyodaya Anna Yojana” (AAY) was initiated in 2000 by the Government to identify the poorest of the poor in the population. The identification guidelines include: -a) Landless agriculture labourers, marginal farmers, rural artisans /craftsmen, such as potters, tanners, weavers, blacksmiths, carpenters, slum dwellers and persons earning their livelihood on daily basis in the informal sector like porters, coolies, rickshaw pullers, hand cart pullers, fruit and flower sellers, snake charmers, rag pickers, cobblers, destitute and other similar categories in both rural and urban areas. b) Households headed by widows or terminally ill persons/disabled persons/ persons aged 60 years or more with no assured means of subsistence or societal support. c) Widows or terminally ill persons or disabled persons or persons aged 60 years or more or single women or single men with no family or societal support or assured means of subsistence. d) All primitive tribal households.
India signed into law, the National Food Security Act, 2013 (NFSA), also called Right to Food Act, in Sept 2013. It marked a paradigm change, from welfare to rights-based approach to food security. NFSA incorporates the Targeted Public Distribution System (TPDS), Mid Day Meal (MDM) scheme and Integrated Child Development Services (ICDS) scheme, making them legal entitlements. The MDM and ICDS are universal in nature and the TPDS targets about two-thirds of the country’s 1.3 billion people (75% in rural and 50% in urban areas). NFSA purpose is “to provide for food and nutritional security in human life cycle approach, ensuring access to adequate quantity of quality food at affordable prices to people to live a life with dignity…”
Under the NFSA, the TPDS entitles the households identified under AAY to receive 35 kilograms of foodgrains per household per month, and other priority households with 5 kilograms per person per month, at highly subsidised prices. The total number of persons covered under the TPDS is determined by the Central Government for each State on the basis of population estimates, and the state governments are responsible for evolving the criteria for identification of priority households. The TPDS provides for nearly 800 million people with highly subsidised foodgrains. Importantly, the eldest women in each household, who is not less than eighteen years old, is considered as the head of the household for purpose of issue of ration cards, another step for women empowerment. The NFSA also provides nutritional support to every pregnant woman and lactating mother by entitling them to a meal, free of any charge, and additional financial support as maternity benefit and to supplement nutrition. Through the ICDS and MDM it provides nutritional support to every child up to the age of fourteen years by way of appropriate meal, free of charge, through local ICDS centres, called Anganwadi centres, and in all schools run by local bodies, Government and -aided schools.
To enable more appropriate focus on food safety, the Central Government had passed a consolidating statute related to food safety and regulations in India, called the Food Safety and Standards Act, 2006; and in August 2011, the associated Food Safety Standards Authority of India (FSSAI) was formed, which is responsible to protect and promote public health through regulation and supervision of food safety matters. The FSSAI also contributes to development of international technical standards in food, and for disseminating and promoting public awareness about food safety and nutrition in India. This has empowered consumers with greater confidence in food products and with ability to redress any concerns regarding misleading claims regarding food ingredients, additives, products, etc.
Initiated during 2005-06, the Central Government through its Department of Agriculture regularly monitors the pesticide residues in food commodities and environmental samples under a central sector scheme, Monitoring of Pesticide Residues at National Level (MPRNL). The scheme involves participation of testing laboratories across the country for monitoring and analysis of pesticide residues in agricultural commodities in different agro-ecological regions of the country to address the concerns for food safety and impact of pesticides on food. The permissible maximum residue limits are regulated by the FSSAI.
The preceding polices and actions were selected to give a broad indication of how the Government of India laid the foundation to what is now known as and the Food System. They shaped the subsequent roadmap for related activities and have led to a fresh set of game changing interventions after 2015.
Game Changers after 2015
A large population and a history of food shortages in the past, ensured that India’s agricultural system stayed food-focused and the approach was highly production-centric. Yet, by 2015, India was not only self-sufficient in its food production, but also a net exporter of agri-products occupying seventh position globally. Despite gains in farm productivity and production, weaknesses in other aspects in the food system were evidenced. There were concerns about sustainability at ecological and economic levels. Large tracts of erstwhile arable land had been mismanaged and tuned into problem soils with indiscriminate use of chemicals. The water resources were coming and stress and climate change was adding new challenges.
The challenges included disparate and unequal development across the sub-continental land area of India. Some regions were highly vulnerable with low productivity and little resilience to inclement forces affecting the Food System. Technology and government support was not reaching equally across the country, or the support was brought into misuse. In some areas, indiscriminate use of resources and/or poorly thought commercial practices had led to land degradation. Food production had also given to untenable cropping systems which were managed by burning crop residue that harmed the ecology and the larger environment. The plateauing of yields across agricultural sub-sectors indicated a technology fatigue and that extension services needed modernisation, and climate change was raising new threats. Vigorous focus on new sciences and technology options, that targeted and benchmarked productivities & sustainability together, was required.
On the other hand, higher production had not translated into efficient supply and food loss was a growing concern. The farming community - the human factor behind food production – were in frequent distress and in fact, an inverse relation between farm production and farmers income was being evidenced. The scenario of record output of food, were frequently met with scenes of farmers dumping their produce on the roadside, demanding higher prices than those locally available. The country was still home to the largest number of the undernourished and underweight children in the world. Urbanisation and a demographic shift in food habits offered the pursuit of market-led production and economic growth, yet regular calls were made for the government to assure farmers remunerative returns through its public procurement mechanism.
The market ecosystem remained ingrained in the past, unproductive in dealing with the changed circumstances and inefficient in managing the surpluses generated. At consumption side, a large number housewives in poor households were still cooking food on kerosene stoves or by firing coal or other biomass and exposed to deadly smoke. Millions employed in unorganised sectors, had minimal resources to fall back on in their senior years which had a serious impact on their food intake, nutrition and health.
It was clear that henceforth, both production and post-production aspects of the food system must be progressed hand-in-hand together, unlike in the past when their role was thought to be sequential. Despite success in achieving high production volumes, the expected returns in the food system were not holistic. A sustainable food system with equitable and egalitarian benefits required adoption of a system approach to the Food System. After 2015, the Government of India rolled out a number of interventions to address these concerns and to correct any anomalies that had emerged existing interventions.
Supporting Healthy Nutrition
In 2015, the Atal Pension Yojana (APY) was launched - a scheme mainly focused on the unorganised sector workers, such as maids, gardeners, street hawkers, delivery persons, labourers, etc. aimed to provide them a guaranteed minimum pension after they reach 60 years age. Earlier, in 2014, one of largest financial inclusion programme in world was undertaken (Jan Dhan Yojana) to provide bank accounts with zero balance to all, and the pension program was linked to this. Subsequently, in 2019, a pension scheme for old age protection and social security of Small and Marginal Farmers (SMF), aged between 18 to 40 years called the Pradhan Mantri Kisan Maandhan Yojana (PMKMY) was also launched. These programmes touch millions of lives, with a guaranteed pension income that can supplement their nutrition needs in their old age.
Taking note of the pitiful conditions suffered when cooking in deprived households, on 1 May 2016 the Government launched the Pradhan Mantri Ujjwala Yojana (PMUY) or Ujjwala scheme, with the objective to make clean cooking fuel such as LPG available to women of rural households which were otherwise using traditional cooking fuels such as firewood, coal, cow-dung cakes, etc. PMUY originally had a target to give free 50 million LPG connections to mainly rural women members of below poverty line (BPL) households. In 2018, the scheme was extended to all poor households and other deprived categories.
As of August 2021, a total of 81,404,350 LPG connections have been released under this scheme. The scheme not only provides for a new connection, but also subsidises refills of cooking gas, if meeting the criteria of a poor household or other beneficiary types. Usage of traditional cooking fuels had detrimental impacts on the health of rural women as well as on the environment. The carbon footprint of LPG is half that of coal and helps reduce carbon dioxide and black carbon emissions, which are among the largest contributors to global warming. Before Ujjwala, India was among the largest contributors to global mortality due to household and ambient air pollution.
The implementation of the Targeted Public Distribution System (TPDS), certain inefficiencies needed to be addressed. To this end, in Aug 2015, the Government of India notified “Cash Transfer of Food Subsidy Rule, 2015” under enabling provisions in the National Food Security Act, 2013 (NFSA). It, inter alia, provides for the transfer of cash directly to the bank accounts of entitled households for provision of food entitlements. This direct cash transfer to beneficiary (DBT) mechanism is being implemented on a pilot basis in the Union Territories of Chandigarh, Puducherry and Dadra & Nagar Haveli. The DBT pilot aims to (i) reduce the need for huge physical movement of foodgrains (ii) provide greater autonomy to beneficiaries to choose their consumption basket (iii) enhance dietary diversity (iv) reduce leakages (v) facilitate better targeting (vi) promote financial inclusion. It is currently optional for other States/UTs to implement the cash transfer of food subsidy scheme or continue with physical distribution of foodgrains as per provisions of NFSA through the network of fair price shops.
India allows free movement of its citizens between states and the workforce includes a large number of domestic migrant workers, and many are enrolled under the NFSA. However, the ration card which enabled their food entitlements was linked to their home address in their domicile state. This was creating an administrative bottleneck and many NFSA beneficiaries could not avail their entitlements when they migrated outside their own state for work. To alleviate such logjams, in May 2019, the Central Government launched a One-Nation One-Ration Card (ONORC) scheme. It piloted the inter-state portability of the ration card in 4 states initially and then adopted by 12 states by January 2020.
The COVID-19 pandemic of 2020 brought to fore the advantages of having portability of ration cards. By December 2020, a total of 32 States/UTs covering around 690 million, i.e., 86 per cent of NFSA beneficiaries in the country, were brought under ONORC. In 2021, this is being implemented in 34 States/UTs and provides seamless portability of existing ration cards for availing food-security entitlements. Tailor made for migrant labourers, ONROC makes food security portable by allowing beneficiaries to avail their entitlements under the NFSA, from any Fair Price Shop (FPS) also known as ration shops, irrespective of their physical location anywhere in the country. Today, India’s has more than half a million (5,44,851) ration shops, which constitute the largest food distribution network in the world. The FPS network services nearly 235 million ration cards linked to 793 million beneficiaries.
In 2018, the Government launched Prime Minister’s Overarching Scheme for Holistic Nutrition (POSHAN), also called the Poshan Abhiyaan or National Nutrition Mission (NMM). The objective of POSHAN is to ensure adequate nutrition and enhance the nutritional status of pregnant women, mothers and children, in identified districts with the highest malnutrition burden. It is a multi-ministerial initiative that leverages technology and convergence between various agencies of the government. It has specific targets for reducing anaemia by 3 per cent annually, and stunting, low birth weight and under nutrition by 2 per cent annually. It also targets the scaling up of interventions under aforementioned ICDS scheme. The implementing agency is the Ministry of Women & Child Development. POSHAN has more than 98.6 million beneficiaries and its dashboard provides a daily tracker of take-home rations and cooked meals disbursed.
To protect consumers from excessive price volatility, especially in case of onion and potatoes, a Price Stabilisation Fund (PSF) was conceived in 2014 and for which the operational guidelines were released by the Ministry of Agriculture in March 2015. With a corpus of Rs 500 crore, the fund operated to provide interest free advance to state governments and UTs, to procure and maintain a strategic buffer of the two perishable vegetables to protect consumers by supplying the commodities in a calibrated manner to discourage hoarding and unscrupulous speculation. In 2016, the implementation of this fund was moved under Ministry of Consumer Affairs, Food and Public Distribution, and pulses were included in the notified commodities. The PSF remains in use, to support consumers and keep these staple food items affordable in times of extreme price fluctuation.
Similarly, a Market Intervention Scheme (MIS) is available to state governments, as an ad-hoc scheme under which are included horticultural commodities which are perishable in nature and which are not covered under the minimum price support scheme. The MIS is intended to intervene to protect growers from making distress sale in the event when prices tend to fall below economic levels and cost of production, however, it has also helped maintain such producers who would otherwise react and shift from producing such crops in the following cropping cycle. The scheme therefore contributes to sustain the subsequent supply of such nutritious foods to consumers.
| These set of actions directly relate to ensuring access to safe and nutritious food for all. Furthermore, they also link to supporting a positive food environs and food experience to support healthy consumption patterns, and the sustenance of livelihood of the workforce. |
Supporting Nature Positive Food Production
Indian Government has a National Mission of Sustainable Agriculture (NMSA), which caters to key dimensions of ‘Water use efficiency’, ‘Nutrient management’ and ‘Livelihood diversification’, by adopting sustainable development pathway. It promotes location specific improved agronomic practices through soil health management, enhanced water use efficiency, judicious use of chemicals, crop diversification, progressive adoption of crop-livestock farming systems etc. and encourages a progressive shift to environmentally friendly technologies, energy efficient equipment, conservation of natural resources, etc.
Soil health management is crucial component of the NMSA, and to facilitate science-based and farm specific interventions, the Central Government launched a Soil Health Card (SHC) scheme in 2015. After testing soil samples and assessing the nutrient status of each, a physical soil health card is issued to each farmer who can then take informed decision for integrated nutrient management of the soil. As of current year, 11,51,65,629 farmers are covered under this scheme (more than 115 million farmers) and more than 97 million soil health cards have been generated. This intervention will have a long-lasting impact on mitigating the indiscriminate use of chemicals and to promote customised inputs and fertigation.
A sub-component of soil health management under the NMSA, is the Paramparagat Krishi Vikas Yojna (PKVY), a programme that primarily aims to increase soil fertility and thereby helps in production of healthy food through organic practices without the use of agro-chemicals. The PKVY helps farmers develop sustainable models of farming through a mix of traditional wisdom and modern science to ensure long term soil fertility build up, resource conservation and helps in climate change adaptation and mitigation. This sub-component of NMSA was also launched by the Central Government in 2015.
Other related components of NMSA are Rainfed Area Development (RAD), Climate Change and Sustainable Agriculture: Monitoring, Modelling and Networking (CCSAMMN), and two sub-components focused on organic farming. Collectively the NMSA impacts soil health management, to facilitate scientific inputs, aids diversification of cropping systems, disseminates best practices and technologies in rainfed areas, supports judicious use of fertilizers and minimises soil degradation. A sub-mission on Agricultural Mechanisation (SMAM) works to increase the reach of farm mechanization to small and marginal farmers and to the regions where availability of farm power is low. It also supports the setting up of custom hiring centres so farm machines can be availed as a service by small farmers. This is important from perspective of nature positive production as the farming equipment includes those that facilitate judicious and safe application of pesticides and other chemicals. The Government of India allocated Rs 1050 crore to SMAM in 2020-21.
Adopting a systems approach to ongoing interventions on soil health, water conservation, watershed development, also helped dovetail agro-forestry on farm landscape. Natural biophysical resources on farm landscape are promoted, such as trees to help in enriching soil organic matter and as wind breaks, peripheral shrubs as large pest barriers, etc. Agro-forestry is a sub-mission under NMSA and also aids in higher carbon sequestration and complements other national initiatives on climate change adaptation and mitigation.
Integrated food farming system are encouraged, promoting crop-livestock synergies in individual farms as well across village communities. The emphasis on creation of farmer-producer organisations also extends to village producer organisations, where village communities can cooperate for a more sustainable mixed crop-livestock food production system. Besides NMSA, Central Government support for integrated farming is also provided through the Mission for Integrated Development of Horticulture (MIDH). A separate National Mission on Beekeeping was also scaled up in 2019 to bring appropriate emphasis on bees, whose pollination activities have a multiplier contribution on crop yields, and for the production of honey as a nutritious food supplement.
Committed to accord high priority to water conservation and its management, the Government of India launched the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) in July 2015 with a corpus fund of Rs 50,000 crore (USD 6.8 billion). It amalgamates other schemes with the objective to extend the coverage of irrigation (Har Khet to Paani – water to every farm), and improve water use efficiency (Per Drop, More Crop), in a focused manner with end-to-end solution on source creation, distribution, management, field application and extension activities. The PMKSY has a decentralized planning and execution structure, in order to allow States to draw up a District level and State level Irrigation Plans. The small farmers are provided a 55 per cent subsidy under this scheme All structures created under the scheme, such as canals, watersheds, drainage, farm ponds, sprinkler systems, etc. are geotagged. In 2020-21, the total area covered micro irrigation is 9.38 lakh hectares with 3.57 lakh ha under drip, and 5.81 lakh ha under sprinkler. Other interventions also created new potential for 3.65 lakh ha for protective irrigation. This programme is also accorded priority for convergence with other development programmes of Department of Rural Development.
| These actions have direct impact on soil health, effect smart & efficient use of water resources, encourage regenerative farming to enable living soils and aid in restoring degraded ecosystems. They also help resilience development, and by optimising inputs advance the livelihood efforts of small producers-farmers. |
Supporting Resilience in Food Supply chain
The food supply chain was approached in a sequential manner in the past, which had focused more effort and resources on various production aspects. Organisations and agencies had developed to market a variety of inputs, machinery and guidance which was production-centric. The efficient marketing of the output, did not capture equal focus in the earlier phases of development. This resulted in more vested and less resilient post-production supply chain, especially for fresh whole food which did not require intermediary conversion into processed food products. The market architecture of the 1960s, designed for a period of deficit, were being continued into the 21st century.
A new market architecture was proposed by the Committee for Doubling Farmers Income in its preliminary report in 2017. It pointed out anomalies that did not enable small holder farmers to opt for market connectivity beyond the regulated markets in the immediate vicinity of their farms. There were very few aggregation hubs for farm produce that could service such needs of the farmers. Without such services, the farmers had no option to target better paying markets within the country. In 2018, the Government of India announced the setting up of 22,000 aggregation hubs called GrAMs (gramin agricultural markets) that would primarily serve as first-mile aggregation points and physically connect the aggregated lots to other market centres, be electronically connected with other markets to support such transactions, and also function to allow local retail level transactions. It was also announced that the GrAMs would be kept outside the ambit of the existing APMC market system.
This intervention indicated that farmers need not restrict themselves to near-farm sales at depressed valuations, but could avail the services of GrAMs and target the higher valuations for their produce at wholesale markets in other States and regions. It did not restrict farmers from continuing the existing practice of selling at their local wholesale APMC market which originated a multi-layered non-differentiated agricultural supply chain. Till then, all wholesale transactions were conducted at the regulated market under whose jurisdiction their farms lay, but now with such facilitation, a market anywhere in the country could be targeted. This was the first time that farmers were provided the means that empowered them with a choice of marketing where supply connectivity under concept of One-India One-Market was feasible. The direct dispatch of fresh produce to terminal destinations was also intended to minimise repeated intermediary handling and mitigate food losses in the supply chain. The GrAMs are not merely pack-houses for fruits and vegetables, but could also consolidate pooling points for milk, aggregation and bagging of grains, and other agricultural produce for forward supply chain connectivity.
Additionally, convergence with an ongoing programme for providing unrestricted all-weather road connectivity to unconnected villages of India, was also initiated. The Pradhan Mantri Gram Sadak Yojana (PMGSY - program for rural road development), then in its in its third phase (PMGSY – III) was directed to ensure that GrAMs, as they were created, would be provided with road links. In 2017, the Model Agricultural Produce & Livestock Marketing (Promotion & Facilitation) Act (APLMC) was released as guidance for States/UTs, in place of their existing APMC Acts. This model Act included livestock marketing indicating its importance and demonstrated a marked shift in approach, from regulation to promotion and facilitation, towards agricultural markets.
However, the idea of a One-India One-Market ecosystem came to fore fully, with the legislation of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 (FPTCA). It legally provisions farmers and traders with the freedom of choice relating to inter-State and intra-State sale and purchase of farmers’ produce, including through channels outside the physical premises of markets notified under other market legislations. FPTCA delineates a farmer means “an individual engaged in production of farmers’ produce” by self or otherwise and includes farmer producer organisations; and farmers’ produce includes all foodstuffs and dairy intended for human consumption in its natural or processed form. For the purpose of this Act, ‘trade area’ is stated as any area or location, place of production, collection and aggregation and includes silos, warehouses, cold storages or any other structures or places, but does not include premises within physical boundaries of markets and yards formed or deemed markets under the State APMC Acts. The definitions and the Act have empowering ramifications for those engaged in production of food items. The FPTCA basically opens up the entire country as a farmers’ market and allows the existing regulated market yards to operate and compete in the open market. From perspective of the food system, it opens up horizontal and alternate market channels and marketing services for farmers, thereby building enormous resilience in the food supply chain.
On the other hand, efforts were also made to facilitate the trade at APMC markets. Earlier in April 2016, an electronic agricultural trade portal was launched to provide a common online trading mechanism to APMCs. Called the eNAM (electronic national agriculture market), its stated mission is the “Integration of APMCs across the country through a common online market platform to facilitate pan-India trade in agriculture commodities” with the idea of removing information asymmetry, promoting real time price discovery along with timely online payment. eNAM now operates pan-India, networking 1000 APMC markets in 18 States and 2 Union Territories. Funds are also provided to APMCs to augment their infrastructure facilities.
The eNAM is also to link with the aforementioned GrAMs and has recently initiated a logistics module so that electronic trade can also be physically fulfilled with appropriate transport and warehousing options. The eNAM also provides electronic integration with Negotiable Warehouse Receipt System (e-NWR) that is promoted by the country’s Warehousing Development and Regulatory Authority (WDRA). The e-NWR assures the quality and quantum of stock held and enables produce owners, usually small and marginal farmers, to trade the negotiable receipts or take loans pledged against their stocked inventories. The Government supports an extensive pledge finance program through banks for farmers who can avail credit against their warehouse receipts at highly subsidised rates. The system allows such farmers the option to store and sell their produce at a later more opportune time, when it suits their requirements. Such systems mitigate the need to undertake distress sales and adds resilience among farmers to face any incremental shocks.
Pledge loan and negotiable warehouse receipts are not equally feasible in case of fresh perishable foods like fruits, vegetables, fish, etc. The more perishable produce types, like milk, must rely on a post-production refrigerated supply chain system. In case of the others, without an appropriate cold-chain, the farmers’ produce is unable to connect with national demand and their market is constrained to an immediate selling radius around producing areas. This in turn dissuades higher productivity and production, or the adoption of sustainable economy-of-scale in other components of the associated food system. However, the demand for these high value foods is rising and hence, the Government of India places crucial importance on cold-chain development. The minimum system standards for cold-chain infrastructure components were first put in place in 2015, and differentiated programs are in place to support modern cold-chain systems under the ministries and departments in charge for horticulture, dairy, fisheries and food processing as applicable. Extensive research and studies were conducted by the National Centre for Cold-chain Development, which was established in partnership between Govt and private sector, including baseline surveys and demand and gap assessments, between 2014 and 2016, to formulate suitable strategic direction to cold-chain development. Other studies were also done to assess the quantum of food loss, especially of perishables, so that most appropriate mitigation efforts could be taken and to support the direction towards sustainability.
In 2015, the Reserve Bank of India (RBI) also amended its guidelines for Priority Sector Lending. In the revised RBI Guidelines, issued on 23 April 2015, post-harvest activities and cold-chain were classified under Agriculture. With this, the distinction between direct and indirect agriculture is dispensed with and credit under Priority Sector Lending (PSL) could include loans for post-harvest activities, viz., sorting, grading and transporting of produce, as well loans for construction of storage facilities (warehouses, market yards, godowns, silos), including cold storage/cold-chain designed to store agriculture produce/products. This again indicated the more holistic approach to support agricultural development including the food system. In 2014, a separate infrastructure fund of Rs 5000 crore - Warehouse Infrastructure Development Fund - was also established under NABARD to provide credit at reduced interest rates, for cold-chain and dry logistics infrastructure.
Since cold-chain affords some convergence in their utility across produce types, the scheme for Gramin Agricultural Markets (GrAMs) encouraged such synergies. The operational guidelines for GrAMs were formulated in 2018 for developing them as multi-commodity aggregation hubs. They allowed for service models where resource sharing for the pooling and cooling of milk, preconditioning and precooling of fruits and vegetables, assaying and bagging of cereals, and other requirements of the local community could be achieved. Therefore, GrAM facilities are aimed to serve as village community hubs, to function at bulk and retail levels and to achieve a high level of energy efficiency through more effective resource and capacity utilisation. The concept of market infrastructure was no longer only focused on developing buying-selling centres, but also on creating village level services at assembly/pooling /packaging units that could facilitate forward connectivity services to cross-regional centres. The service would allow for the produce under custody to remain under ownership of the primary farmer-producer until the terminal wholesale transaction. The Agri-Market Infrastructure Fund with an intial corpus of Rs 2000 crores (USD 270 million) was set up in 2018 to support creation of such suitable infrastructure in GrAMs, as well as to upgrade the existing regulated wholesale markets (APMCs). Subsequently, in 2020 the Agriculture Infrastructure Fund (AIF) of Rs 100,000 crore (USD 13.6 billion) was set up which added focus on post-harvest management Infrastructure and community farming assets.
The roll out of Goods and Services Tax (GST) with effect from 1-July-2017 gave a boost to achieving a single market status in India and to attain a one-tax one-market status. Even so, to minimise the taxation impact on services carried out to prepare and market fresh produce, the GST regime carried forward the recommendation to exempt tax services by way of pre-conditioning, i.e., sorting, grading, cleaning, and pre-cooling, waxing, retail packing, labelling of fruits and vegetables, which do not change or alter the essential characteristics of the said fruits and vegetables. Thereby, preconditioning services, packaging, labelling and precooling, as well as ripening, loading, unloading transport and warehousing of agricultural produce remains exempt from GST. This gave added incentive to undertake operations at pack-houses and GrAMs as a service, encouraging a farmer-producer business model, as opposed to an intermediary trading model. There is a continued need to create additional capacity and to modernise the food supply chain. Logistics assets are a priority for enabling access to a wider one-nation market. Such infrastructure and business development are largely attracted through incentivising capital investment from the private sector who are also expected to bring in the desired operational efficiencies. These supporting initiatives by the Government help maintain the momentum in creating relevant infrastructure and services to modernise the food system.
In further support to drive a changed market ecosystem, past regulatory controls that were designed in times of deficit had to be addressed and urgent calls for the same were being made for more than a decade. In September 2020, the Government enacted amendments to the Essential Commodities Act, 1955 (ECA). The ECA had provided government officers the powers to control production, supply and distribution of essential commodities, which include foodstuffs, by way of requiring stock limits, controlling permits, directing commodity prices, enforced selling of stock, etc. This legislation constrained wholesome private sector participation in the food chain and did not allow for the development of a free market economy in the food system. The Essential Commodities (Amendment) Act, 2020, did away with these omnibus powers on foodstuffs and only allow such controls during extraordinary moments like war, famine, natural calamity of grave nature, or extraordinary price rise; further, in such cases a predetermined guidance is placed, to make the level of control reasoned and transparent to stakeholders such that traders, exporters and food processors, whose operations depended on the prearranged availability of stock, can plan for and manage such eventualities.
Farming enterprises often produce crops that are vertically integrated with the processing industry. Common examples of food crops that must be processed into consumer-ready items are wheat, paddy, oilseeds, cane, processing variety potato, etc., which have to be milled or extracted into flour, rice, edible oils, sugar, chips, etc. Even table variety fruits and vegetables, milk and meats which are marketed fresh, can be vertically integrated with the supply chain of aggregators or other industry units. Vertical integration can be done through a multi-layered market network or by way of contractual arrangements, the latter becoming more common. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 (FAPAFS) was enacted to safeguard farmers who choose to enter such contracts. FAPAFS is intended to balance the unequal power relation between small farmers as contracted party and private sector as contractor; as well to empower the farmers (as the contractor) when they enter into agreements for agricultural services from private sector (the contracted party); and combinations thereof. This Act provides for more equitability in agreements between commercially unequal parties. Since the majority of output from agriculture is food, the FAPAFS is considered an important policy for the Food System.
Food producers, especially small farmers, are at whim of various market risks, and provision of electronic linkage with the national market or the means of logistics connectivity is not sufficient. The food system is not resilient enough and it still requires price support from government. The public procurement system does provide some steady demand and succour during market crisis, but also had some key inadequacies. To make the procurement system more robust, in September 2018 the PM-AASHA Scheme was announced, with a bouquet of options such as Price Support scheme, Price Deficiency Payment scheme and to pilot a Private Procurement & Stockist scheme. The interventions are intended to help mitigate market risks and allow for greater stability in trade of various food items.
Another major risk to food producers is the weather, and the risks exist despite various weather advisory and alerting systems. To cover losses from natural calamities, a flagship crop insurance scheme called Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched in 2016. This government sponsored insurance system is in line with theme to integrate multiple stakeholders on a single platform and for bringing uniformity across the country. A total of ten insurance companies are linked and the Central Government subsidise the premium of the farmers. The States and UTs are provided flexibility to run the scheme with a selection of additional risk covers. The insurance covers cereals, millets, pulses, annual horticultural crops and oilseeds against losses arising from calamities like landslides, hailstorms, floods, droughts, pest infestation, cyclones, etc. Various technologies (drones, smartphones, and satellite remote sensing, etc) are used for faster and efficient estimation of crop losses and to ensure early settlement of insurance claims. The insurance is voluntary for farmers and can be taken as per cropping season. In FY 2019-20 nearly 61.3 million farmers applications were accepted, insuring an area of 50 million hectares. It is clear that the PMFBY backstops to keep the production base financially resilient in the face of such disasters, and thereby supports quicker recovery from the supply chain disruptions that occur at production end.
The supply chain of food also includes a large array of food processors. In India, most are cottage scale or micro scale enterprises. These stakeholders in the food system do not have recourse to resources that were generally made accessible to large industry scale food processors. There are approximately 250,000 such micro processing units in the country, 66 per cent of which are in rural areas and they are estimated to contribute 74 per cent of employment in the food processing sector. It was necessary support these units and make them resilient in a changing market environment that was placing demands on their operational capabilities. In June 2020, the Government launched the PM Formalization of Micro Food Processing Scheme, for a tenure of five years (2020-21 to 2024-25). With this, the Ministry of Food Processing Industries is to provide financial, technical and business support to upgrade existing micro food processing enterprises. The Central Government has earmarked Rs 10,000 crore (approx. USD 1.4 billion) for this centrally sponsored scheme. The scheme encourages a One-District One-Product approach in implementation. Among the objectives of the scheme is to enable access to credit, capacity building and handholding support, to encompass such units into a formally compliant framework, and to support their integration with organised supply chains.
Another game changing initiative launched by the Central Government of India, in September 2020, is the Pradhan Mantri Matsya Sampada Yojana (PMMSY). With a tenure of five years and a total outlay of Rs 20,050 crore (USD 2.73 billion) it targets modernisation and sustainable development of the fisheries sector. The programme encompasses the entire gamut of the fisheries supply chain, covering inputs, production, post-harvest management and market supply. To amplify the outcomes of PMMSY, the scheme is to be fostered by other ongoing schemes of ministries of shipping, food processing industries, rural development and agriculture.
The PMMSY programme involves area-specific strategic development planning, promotes aquaculture especially in northern India where soil has turned saline and alkaline, focuses on value chain aspects such as species diversification, accreditation and standardisation of brood stock, block chain for end-to-end traceability, laboratories to address disease, anti-biotic and residue issues, development of entrepreneurship models, expansion of fisheries extension support services, and national level e-marketing. The desired outcomes are not merely the increase of sustainable fish production, productivity and share in GDP, but also to decrease the post-harvest loss from current 25 per cent to 10 per cent, and to increase domestic fish consumption from 5 kg to 12 kg per capita. These specific outcome-centred targets indicate that the Government of India has result-orientated approach towards the Food System.
Various similar initiatives to enhance productivity of livestock and animal husbandry sector are under implementation. However, in September 2019, the Central Government brought forth targeted and resurgent focus on making the livestock sector more resilient to disease, with the launch of the National Animal Disease Control Programme (NADCP) for control of Foot & Mouth Disease (FMD) and Brucellosis. This programme has a total outlay of Rs.13,343 crore (USD 1.8 billion) for five years (2019-20 to 2023-24) for vaccinating 100 per cent cattle, buffalo, sheep, goat and pig population for FMD and 100 per cent bovine female calves of 4-8 months of age for Brucellosis. In achieving these explicit targets, this programme will add much needed resilience and have deep impact on millions of livestock and livestock farmers.
| These actions in this section have direct impact on improving post-harvest management, to minimise food loss, strengthen smallholders to mitigate risks. They also contribute to advance livelihood and livelihood opportunities across the food system. Relating to the supply chain, these also ensure benefits that cut across the 5 action tracks of UNFSS. |
Advancing Livelihoods in the Food System
Traditionally, the food system, like all agriculture, has been production-centric. Not just in efforts to enhance production and farm level productivity, but also how achievements and growth were recorded. The metrics were output focused, limited to tons of commodity produced per unit of land, quantum of fertilizer used, number of water resources created, population of livestock, capacity and numbers of warehouses created, and the like, all rooted in linear thinking. A system approach with the measure of the outcome was not evident. More relevant measures could be tons of food delivered per unit of land, returns per unit of input, throughput increase and market expansion from logistics, metrics of food system sustainability, etc. Furthermore, farmers growth, the human factor behind food production, was considered synonymous to production growth, ignoring the fact that economic returns also depend on market dynamics and supply demand metrics. In fact, growth measured in terms of food producers’ income would automatically assimilate and necessitate focus on specific outcomes from all other interventions.
In February 2016, the Prime Minister of India set direction by visioning the doubling the income of farmers, and a Committee on Doubling Farmers Income (DFI) was constituted in April 2016. Its members were drawn from policy makers, experts, researchers and civil society and the Committee addressed various concerns in agriculture and the food system. The watchword adopted by DFI was Efficiency for Sustainability and explaining that, “Agriculture sector as a profession will become wholesome, when transition happens from, food security to nutrition security for the consumers, extractive production system to sustainable production system for the ecology, and from a mere Green Revolution to a Farmers’ Income Revolution or Income Revolution for the farmers – Good for the Farmer, Good for the Consumer and Good for the Planet. “
The findings and recommendations of DFI were accepted by the Government of India and are under various stages of implementation. Many of the recommendations were adopted concurrently, even before the final report by the Committee which was released by the Ministry of Agriculture in September 2019. DFI analysed the growth of agriculture over the past 7 decades, examined the results and current status to set appropriate context and understanding of the pathway followed. It determined the need for a directional change, where farmers’ income is to be the basis, in place of production alone. It set appropriate outcomes as growth targets and suggested the following strategy:
- Adopting a “demand-driven approach” for efficient monetisation of farm produce and to synchronise the production activities in Agriculture & Allied Sectors.
- Improving and optimising input delivery mechanism and overall input efficiency [technologies, irrigation methods, mechanisation, Integrated Pest Management (IPM), Integrated Nutrient Management (INM), farm extension services, adaptation to climate change, integrated agri-logistics systems, Integrated Farming Systems Approach, etc.].
- Offering institutional credit support at the individual farmer and cluster levels.
- Strengthening linkages with MSMEs (micro, small and medium enterprises), so as to accelerate growth in both farm as well as non-farm incomes along with employment creation.
DFI noted that farmers’ income is directly related to cost of production (including input costs), it was also dependent on the profitable monetisation of their produce, through effective market linkages. The Committee deliberated in detail the specific economic activities and topics that have a durable impact on increasing farmers’ income. The broad pathway it set forth is extracted as follows:
- Demand Driven Agricultural Logistics System for post-production operations such as produce aggregation, transportation, warehousing, etc.
- Agricultural Value System (AVS) as an integration of the supply chain and to drive market led value system – District level, State level and National Level Value-System Platforms to promote individual value chains to collaborate and integrate into a sector-wide supply chain.
- Farmer-centric National Agricultural Marketing System by restructuring for a new market architecture, consisting of primary aggregation centres at First-mile called gramin agricultural markets (GrAMs) numbering 22,000 and Primary Wholesale Agricultural Markets (APMCs/APLMs-other markets numbering around 10,000), as also secondary & tertiary agricultural markets, all of which are networked by online platforms to facilitate pan-India access to domestic markets; as also integrating the domestic market with export market by considering the latter as a targeted market activity and not just an add-on.
- Developing Hub & Spoke System at back-end, as well as front-end, to facilitate supply chains and promote an Agri-Value System (AVS) (which is a combination of input providers, farmers, transporters, warehousing, wholesalers, food and agro-processors, retailers, etc).
- Marketing Intelligence System to provide demand led decision making support system - forecasting system for agricultural produce demand and supply, and crop area estimation to aid price stabilisation and risk management. It required moving from erstwhile market inspection regime to providing stakeholders with market intelligence on demand and supply.
- Promoting Sustainable Agriculture, Climate Resilient Agriculture, Rainfed Agriculture, Conservation Agriculture, Ecology Farming, Watershed Management System, Integrated Farming System, Organic Farming, Agro-Climatic Regional Planning, Agricultural Resources Management and Micro-Level Planning, etc. While these alternate systems are to be adopted & scaled up, with due validation of the protocols & outcomes by NARS (National Agricultural Research System), the modern agro-chemical based cultivation practices shall also be promoted but based on the principle of evidence based, minimal/integrated and efficiency targeting resource use (eg., Soil Health Card recommendations as the basis for soil nutrient management). It is essential that sustainable agriculture is not limited to the practice of alternate production systems in certain geographies alone, but goes beyond into larger cultivation practices by incorporating evidence based and good agricultural practices.
- Effective Input Management achieving Resource-Use-Efficiency (RUE) and Total Factor Productivity (TFP) – Water, soil, fertilisers, seeds, labour-farm mechanisation and credit, so as to reduce farm losses, while ensuring sustainable and eco-friendly practices.
- Enhancing Production through Productivity– to achieve & sustain higher production out of less and release land and water resources to diversify into higher value farming for enhanced income.
- Farm Linked Activities including secondary and tertiary sector activities of KVIC (Khadi and Village Industries Commission) and MSME (Micro, Small and Medium Enterprises) scales, for promoting near-farm and off-farm income generating opportunities as well as to facilitate more of the produce capturing more of the market value.
- Agricultural Risk Assessment and Management including drought management, demand & price forecast, weather forecast, management of biotic stress including vertebrate pests, access to credit for farming operations; post-production finance to prevent distress sale by farmers, and crop & animal risk management through insurance.
- Empowering Farmers through Agricultural Extension, Knowledge Diffusion and Skill Development that focused on the entire supply chain and not production alone.
- Research & Development and ICT designed to support the Doubling of Farmers’ Income strategy in the short run, and help accelerate the pace of income enhancement on a sustainable basis in the long run.
- Structural and Governance Reforms in Agriculture, including building a database of farmers, facilitating farmer & produce mobilisation, mechanism at district, state & national levels for coordination & convergence and farm income measurement as key delivery channels for transparent and inclusive development.
The DFI Committee emphasised that the subject of agriculture (and hence food) is complex in nature and cuts across domains and socio-economic backdrops, and therefore, the approach to it cannot remain in a narrow prism of a traditional farmers’ discipline, nor boundaried to a farm. It therefore incorporated a cross-disciplined, system approach, when developing strategies. Noting that agrarian societies, are a source of agricultural raw material that can feed humans, animals and industries on a sustainable basis, it opined that these societies would find renewed global predominance, as the world faces growing populations & industrial demands, which is happening in the backdrop of climate change. It brought focus on the fact that farming must be treated as an enterprise, and that future development will have the returns and not just the output from farms as its prime objective.
| India, in its SDG targeting exercise, had stated, “By 2030, to double agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets income and livelihoods…” The DFI Report advances and fast-tracks these commitments. |
Other Support to Food System
The use of satellite technology and other modern technologies to support execution and to optimise the implementation of schemes and programmes of the Government of India is common. In September 2014, keeping in view that horticulture sector is a major driver for the growth of Indian agriculture and need for reliable and timely horticultural statistics, a project called CHAMAN (Coordinated Horticulture Assessment and Management using geo-informatics) was initiated under Mission for Integrated Development of Horticulture (MIDH), of the Ministry of Agriculture. CHAMAN leverages a combination of remote sensing, geo-spatial applications and field survey for better horticulture assessment and development.
Similarly, a programme called FASAL, using procedures developed by Space Applications Centre, ISRO, regularly generates crop forecasts at District/State/National level for 9 major crops of the country for the Ministry of Agriculture. The assessment both optical and microwave remote sensing data for rainfall, Remote Sensing Vegetation Index and Moisture adequacy Index and used for crop acreage estimation, crop condition assessment and production forecasting. In the year 2017-18, total 17 forecasts were generated for crops, such as Jute, Kharif Rice, Sugarcane, Cotton, Rapeseed & Mustard, Rabi Sorghum, Wheat, Rabi Pulses and Rabi Rice.
To provide near real-time information on prevalence, severity level and persistence of agricultural drought at state/ district/sub-district level a project called NADAMS (National Agricultural Drought Assessment and Monitoring System) is implemented. NADAMS is developed by National Remote Sensing Centre, and currently, it covers 17 states of India, which are predominantly agriculture based and prone to drought situation (Andhra Pradesh, Assam, Bihar, Chhattisgarh, Gujarat, Haryana, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal).
To support the crop insurance schemes with a remote-sensing-based index for index-based insurance, a project called KISAN (C[K]rop Insurance using Space technology And geoiNformatics) was launched in October 2015. The project envisages using high resolution remote sensing data from satellites and UAVs for optimum crop cutting experiment, planning and improving yield estimation. Experiments for mapping and monitoring of post-Kharif rice Fallow Lands using Satellite Remote Sensing and GIS Technologies are also being done, to support crop intensification under the National Food Security Mission (NFSM). Satellite based wind vector data products for weather forecasting, cyclone detection and tracking services are also initiatives taken by Government of India.
In 2019, the Kisan Credit Card (KCC) Scheme, earlier linked to crops, was extended to farmers in animal husbandry and in 2020 to fishers. Furthermore, in February 2019, Pradhan Mantri Kisan Samman Nidhi scheme (PM-KISAN) where land owning farmers are provided monetary support, paid directly to their bank accounts in three equal instalments annually, to supplement their financial needs. While not specific to the food system, this supplemental income supported a great number of food producers in the distressing time caused by the COVID-19 pandemic.
In 2021, to bring a resurgent focus on the Cooperatives sector, the Government of India established a dedicated Ministry of Cooperatives. Various schemes are being introduced by the National Cooperative Development Cooperative (NCDC) to ease credit availability and other associated support to fast track the digitisation of primary cooperative societies, to build entrepreneurship capacity, support technology induction in dairy and fisheries sector, each of which complement Government schemes being implemented by other Ministries and Departments.
The programmes and schemes implemented by the Government of India host dedicated web portals with dashboards, with a pan-India database which is regularly updated. This enables transparent public dissemination of the information, helps in the monitoring of the implementation and sets public expectations of outcomes.
The Comptroller and Auditor General of India (CAG) is one of the institutions that evaluates implementation of Central Government programmes and expenditures. The CAG report is taken seriously whenever various systemic inefficiencies, delays and deficiencies in such implementation is assessed. Additionally, third party impact evaluations are a norm for the programmes and schemes being implemented, such reports are disseminated for public consumption and utilised for planning course corrections.
| A system approach that focuses on system wide outcomes, through convergence and dovetailing of resources, with appropriate monitoring mechanism is evident. The Government of India has initiated a holistic set of initiatives, that leverage modern and emerging technologies, as well consolidate piecemeal initiatives that support various aspects of the food system and support the themes considered under UNFSS 2021. |
Author's annotations
Various other policies and actions also have an impact on agriculture and allied sectors such as, adopting the WTO agreement, committing to SDGs, international cooperation through Joint Agricultural Working Groups, region-specific initiatives, localised sector specific programmes, solarised applications like irrigation pumps, employment guarantee programs, income support programs, digitalisation of agriculture, funds to support agricultural tools, infrastructure and R&D, interventions to facilitate railway, waterway and airway connectivity, and more. Being an agrarian society many of India’s socio-economic development and welfare activities inherently converge on the associated stakeholders including the food system. However, this discussion paper touches on those that are primarily food system related and specific to Government of India. Other regional interventions by state governments, social enterprises and other agencies are not in the ambit of this discussion paper.
The policies, actions and initiatives of the Government of India in this discussion paper are therefore not exhaustive, nor are they complete; neither are they perfect. The paper is intended to narrate the evolution of the food system in the country and the direction taken for sustaining the pathway well beyond 2030. The scale and scope of impact of the discussed interventions are inherently large given the backdrop of India. Suitable adaption and adoption for appropriate relevance in other countries is possible, to match their circumstances.
The
objective of this discussion paper is to correlate and narrate India’s course of
actions at different phases as it advanced its food system. Other countries at
various stages of development can identify specific
policies/actions/initiatives and consider adaptation or replication as may best
suit their circumstances. Corrective measures are included which may elevate
public discussion, help avoid pitfalls and aid fast-tracking of interventions,
besides engendering local and global partnerships for developing guiding
principles of significance for further action and a system for follow-up.
The UNFSS can consider a comprehensive detailing of schemes and programs, including in other countries, and compile templates categorised by outcomes so that they can be easily and quickly adapted by others. Due consideration may also be given to dovetailing resources of various arms of the UN to assist LDCs to indigenise and adapt the specific and exemplary actions and policies from other countries. Towards this, a global level Monitoring and Impact Evaluation Group may be considered to assist in the implementation of selected policies that can modernise the food system. This group can also contribute to knowledge sharing, albeit in standardised language and uniform manner, under auspices of UN.
The food system impacts all humankind at multiple levels which cannot remain partial to merely think global to act local, but need to think global and also act global, as inter-linkages across the continents get strengthened. The UNFSS 2021 and the five Action Tracks synthesised for it, bring to fore this urgent need for greater global collaboration, cooperation and action. Interventions must address the outcomes that encourage a supportive mindset or a value system that promotes an ecosystem where all stakeholders in the food system are winners.
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Various initiatives of the Government of India relate to agriculture, and food system, and they have provided incremental gains in their course. For purpose of brevity, discussed in this paper are those that are considered to have a higher impact through means of effecting convergence, or vide amalgamation of schemes, or suggest a transformation by offering a paradigm change altogether.
This note draws upon various documents of the Government of India, including Planning Commission, Niti Ayog, the Committee on Doubling Farmers Income, dashboards of various schemes & programs and individual insights.
The full discussion paper with added inputs by Ms. Raka Saxena & Ms. Ritambhara Singh will be available on ResearchGate by Sept-2021.
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About UNFSS 2021
The United Nations Food System Summit (UNFSS), to be held in the last week of Septermber 2021, aims to document and discuss food related initiatives taken across the world and to disseminate and progress a more systemic & standardised approach for greater equitability in nutritional security, sustainability and dependability of the Food System worldwide.
UNFSS is to discuss challneges faced by the Food System and solutions along five major themes and action tracks (AT1 to AT5), summed up as follows-
- Ensure Access to Safe and Nutritious Food for All – to achieve zero hunger, higher nutrition, and higher food safety
- Shift to Sustainable and Healthy Consumption Patterns – to have safe, sustainable and healthy food environs, to improve demand and experience for healthy food, and reduce food waste at level of households, food services and retail.
- Boost Nature Positive Production – to protect natural ecosystems, sustainably manage existing food production, and restore and rehabilitate degraded ecosystems.
- Advance Equitable Livelihoods – improve status and returns of the workforce food system - farmers, waged agri-workers, fisherfolk, pastoralists, food processing/ manufacturing workers, transport/distribution workers, shop and market workers, food preparers/servers
- Build Resilience to Vulnerabilities, Shocks & Stress – universal access to climate justice and resilient development, strengthen smallholders to mitigate risks, reduce food loss in supply chain, risk proof food system infrastructure, and manage agro-ecology and water-energy-food nexus sustainably.
The food system does not mean all agriculture, though it is inherently linked with agricultural activities and the allied food distribution chain. Therefore, this discussion paper narrows down on those interventions that focus on production, distribution and consumption of food and other aspects that relate closely to the food system.
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