How to Feed 800 Million People

Anamika Devi balances on the edge of the family bed, straining to reach over her mother’s head to a newspaper-lined shelf above the small stove. Steam from a boiling pot of rice wafts up toward her, warming a corner of the single room that is bedroom, kitchen and bathroom to the 9-year-old and her parents. A few minutes later, her mother Lajja serves up a heap of dal and rice on a tin plate, and Anamika, cross-legged on the bed, tucks in.

Anamika probably doesn’t overthink where her dinner comes from, or know that it’s part of the world’s biggest subsidized-food program. Outside, the approaching evening is pungent with dinner-fire smoke in Lalpani, a low-income neighborhood that trickles down a hillside in Shimla in the northern Indian state of Himachal Pradesh. Most of the tourists who visit the erstwhile summer capital of the British Raj will never amble down the steep dirt pathways of Lalpani, where day laborers like Anamika’s father Udho Ram live. Ram earns about $63 a month — more than many in India but too little to afford food in the open market. Because Ram’s wages are low enough for him to qualify for cheaper rice and wheat subsidized by the central government in New Delhi, at about 5 cents and 3 cents a kilogram, respectively, his family only misses a meal a few times a month, and not every day, like so many other Indians.

India’s government has for decades been distributing, in some form or other, subsidized food to millions of poor. But last September, New Delhi went a significant step further: Parliament passed the National Food Security Act (NFSA), guaranteeing access to subsidized food to nearly 70% of the 1.2 billion population. In an unprecedented experiment, the central government is now legally bound to provide over 800 million people — just shy of the combined populations of the U.S. and the European Union — 5 kg of subsidized food grains every month. (The poorest receive more, and states also run their own food-subsidy programs.) For these people, food is now a right, not a luxury, and it’s up to officials to make sure they get it. “You can’t achieve zero [global] hunger if you can’t address the issues of hunger and chronic malnutrition in India,” says Ertharin Cousin, executive director of the World Food Programme (WFP), which advises New Delhi. “We could say the problem is too big, and so we don’t do anything, or we say the problem is big, but let’s try. [This law] is an attempt to make change.”

The landmark legislation relies on an existing national network of farmers, buyers, storage facilities and sellers to provide some 60 million tons of grains each year to recipients like Anamika and her family. In many ways, the system works: according to a recent study, in fiscal 2011 — 12, over 500 million Indians received 51.3 million tons of subsidized food — more than 10 times the amount of direct food aid delivered by WFP in 2011. Partly that’s because, for most of the past 25 years or so, India has been producing more than enough grain to feed its population. So much, in fact, that there’s a surplus: in 2012 — 13 India exported 22 million tons of cereals and this fiscal year will give $26.2 million in food aid to Yemen and Afghanistan. Yet over 17% of Indians are still undernourished, according to the 2013 Global Hunger Index. That so many go hungry even as India produces so much food is due to a complex set of factors including weak governance, urban migration and drought, says Subir Gokarn, director of research at Brookings India. “I would compare it to the homeless problem in the U.S.,” he says. “People fall through the cracks.”

Few would argue against getting food to more Indians. But not all agree the NFSA is the way to do it. The law, which also covers funding for an existing school-lunch system and a new maternal-nutrition program, among others, is expected to cost the government about $20 billion in fiscal 2013 — 14 as it is rolled out across India. That’s a moderate increase over what the government has already been spending on food programs. But many are concerned the figure could rise much higher, and NFSA critics say that more spending on welfare is reckless in an economy burdened by a weakened currency and a large fiscal deficit. Moreover, because the law relies on states to manage the food’s distribution, New Delhi’s money is only as good as each state’s efficacy. In 2005 the government estimated that nearly 60% of its grain did not reach beneficiaries because of theft, corruption and difficulties identifying the needy. “The economic inefficiencies and the losses incurred [in the system] will outweigh the welfare gains you are trying to achieve,” says Ashok Gulati, chairman of India’s Commission for Agricultural Costs and Prices (CACP).

The differences over this landmark legislation reflect a wider question facing India and, indeed, many other nations. Should the state invest vast sums of public money to help the poor get a leg up? Or should India recommit to the economic reforms it began in 1991, and bankroll measures to spur economic growth?

Mohandas Gandhi, leader of India’s freedom movement, was a tireless advocate for the poor, a commitment that has been embraced by the nation’s foremost political dynasty, the Gandhi family. (Though they share a last name, Mohandas Gandhi and the family are not related.) Sonia Gandhi, head of the Congress Party, which leads the United Progressive Alliance (UPA) government, has made alleviating poverty through welfare a cornerstone of her party. A national employment program was widely seen as being key to the re-election of the UPA in the 2009 general elections, and Congress chiefs hope the NFSA will also give the now struggling coalition a similar boost in this spring’s polls. Says Gokarn: “If the UPA does well, this will be given a lot of credit.”

Perhaps so, but for critics like Gulati, winning political points doesn’t necessarily mean the scheme is sound. If the economy does not continue to expand, he says, the government “will distribute … poverty, not prosperity. Let the cake grow.” Gandhi, who led her party’s long fight for the law to be passed, is convinced of its need: “The question is not whether we can do it or not,” she said in a rare public speech to lawmakers before the bill’s passage. “We have to do it.”

Too Much of a Good Thing
To understand just how ambitious the NFSA is, you have to go down to the farm. The rice that Anamika’s mother cooked for dinner in Lalpani came from a government-licensed ration shop, known as a fair-price shop, up the hill from their home. But it was grown in neighboring Punjab state, India’s breadbasket. By early November, the autumn rice harvest is almost over in Punjab’s Patiala district. Only a few diesel-run harvesters still lumber up and down the saffron-hued fields, chased by white birds eating the rice seeds that fly in their wake. Though the state comprises less than 2% of India’s land, its farmers grow nearly a fifth of the nation’s wheat and about 14% of its rice. Almost all the rice is sold into the food program.

That’s no accident. Fifty years ago, Punjab’s fields became the beating heart of India’s Green Revolution. In 1943, when India was still under British rule, a famine swept Bengal and killed 2 million to 3 million people. Newly independent India’s leaders never forgot that tragedy. They adapted rationing systems, like the one set up by the British during World War II, to distribute food. But by the 1960s, India was facing food shortages, living “ship to mouth” and relying on millions of tons of food aid to feed its growing population. The government started improving high-yielding seed varieties and fertilizers that dramatically boosted the production of wheat and, later, rice. In a few short years, classrooms were being cleared out to make space to store grains. To get the bumper crop to consumers — and motivate farmers to grow more — in 1965, New Delhi formed the Agricultural Prices Commission, now the CACP, to set the price at which the government would buy food from farmers, and the Food Corporation of India (FCI) to purchase, transport and store the grains.

If farmers grew it, the government would buy it: the pact remains intact today, though it works better for farmers in places where they are politically powerful, like Punjab. In poorer states like Bihar and Uttar Pradesh, many farmers don’t even know there is a minimum support price (MSP) and are often conned out of it by unscrupulous brokers or buyers. At a grain market outside the village of Bolar Kalan in Patiala, 62-year-old farmer Inderjit Singh says the MSP should be higher, but acknowledges that selling to the government is still more secure than relying on the open market. “There’s no guarantee from private dealers,” says Singh. “They could lower the prices anytime.”

The pact has also helped create a new problem: oversupply. The government cannot say no to farmers selling certain grains — thus it buys more food than it can dole out. Last July the FCI had 74 million tons of wheat and rice in storage across the country, more than the distribution system can handle. To try to clear the inventory, India has been exporting some of it. Other nations now worry that India’s food program will end up flooding global markets with subsidized grains, artificially lowering prices.

In Patiala, signs of the glut are everywhere. Bags of rice and wheat are stacked up in old gas stations and in rented patches of land between fields. Along one lonely road, the smell of fermenting grain is thick where thousands of bags of government-bagged wheat rot behind a wall of brick and barbed wire. Ruined food is a common sight in Punjab — and it infuriates farmers. “We have grown all this and it’s sitting here rotting when it could be feeding a child,” laments Gurmail Singh, a 54-year-old farmer in Patiala who says there are five or six storage areas, or godowns, near his village where food is openly rotting. “It’s the biggest problem in Punjab.”

A Leaky Faucet
Rotting food is unacceptable in a country where children are dying from malnutrition. Yet far more food is lost to theft and corruption once it starts moving toward the people who need it. On a late afternoon in Patiala, a group of truck drivers stands around a rice miller’s yard, watching workers from Bihar state unload sacks of paddy to be milled into rice. One driver explains that the opportunity to grab a bag or two usually comes in the chaos of loading rice bags onto train platforms before they are sent by rail to any state where rice is needed. “Sometimes we’ll steal a few bags,” admits a driver, chuckling. “If it’s good quality, we’ll take it home ourselves. Otherwise we’ll sell it.”

It’s not just truck drivers who nab the odd sack of rice. In the past decade, as much as $14.5 billion worth of government food was stolen by corrupt politicians in Uttar Pradesh alone, according to a 2012 Bloomberg investigation. It’s not clear how much food continues to be lost each year, but it’s enough to feed a lot of hungry people. In 2005 the Planning Commission estimated that about 58% of public food grains from central authorities did not reach the intended beneficiaries. More recent assessments show the system is becoming more efficient. A 2011 survey of nine states, led by economist Reetika Khera, found that households were receiving more than 80% of their entitled food, except in Bihar state, a notorious underperformer.

But Punjab, a relatively rich state, experiences widespread theft too. “Everyone here has food,” says Parminder Sandhu, Punjab’s joint secretary in the Department of Food, Civil Supplies and Consumer Affairs. In India’s breadbasket, even people who qualify for ration cards have enough rice and wheat from their own fields. They don’t need their allotted, discounted food, so shopkeepers sell it off. “People don’t visit the ration shops,” says Sandhu, “so it gets diverted to the open market. That’s how it goes.”

Another factor why food gets pilfered: shopkeepers who don’t make enough on government grains are tempted to sell them when market prices are higher. In Bilaspur, a rural district outside Shimla, the window of the village’s fair-price shop is crammed with customers who have come to buy sacks of rice and wheat for the month. “I don’t sell my rations [on the black market], but others do,” says D.P. Varma, the owner, sitting with a ledger on his lap. Varma says the commission he receives for selling government grains — between 13% and 23% — isn’t enough to keep his business going. “I used to have staff, but I couldn’t afford them. Now I work alone.”

A Moving Target
Varma’s state, Himachal Pradesh, was among the first in the country to implement the NFSA, on Sept. 20. A little over half of the state’s population will be covered by the new food scheme, and the rest by the state itself. In the past, Himachal Pradesh has done better than other states in stopping theft and leakages; in 2009 — 10, only 22% of food grains there were being illegally diverted, compared with 74.5% in Bihar and 66% in Rajasthan.

Yet things still need fine-tuning. In Kanaul, a village 25 km outside Shimla, the roadside ration shop is shuttered, the owner out sick for the day. It’s a 20-minute walk downhill to the smattering of homes that buy their food there. One belongs to Narayan Das, a 72-year-old farmer with sunken cheeks covered in a coarse white beard. Das supports two wives, three daughters, two sons and a daughter-in-law on the vegetables growing on his land. It’s a big household, and the rice and wheat he is entitled to buy is “nowhere near enough” to feed the family, Das says. He gestures to the withering corn rows beneath his hillside home. “We work in the field,” he says. “We need to eat.”

The law’s supporters are confident the system will get better with time — by, among other measures, computerizing the supply chain and having more co-ops, rather than individuals, run the ration shops. Some say that eventually moving from food aid to direct cash transfers, which the law allows for, will help too. “Establishing the right to food is not an empty gesture,” says Peter Kenmore, representative of the U.N.’s Food and Agriculture Organization in India. “What could happen over the next 20 years would be a refocusing, so that people who are most severely at risk receive the lion’s share of the attention.” Then, says Kenmore, more food could be given to fewer people, the public distribution system could downsize and be cheaper to run, and “the total subsidy goes down.”

That would take too long to help Congress win this year’s elections. And it might not be enough to settle the debate over growth vs. spending to tackle India’s poverty. “It takes a huge amount of time for people to realize that food is actually a right,” says Himanshu, an economist at Jawaharlal Nehru University who uses just one name. “That people can demand food, and go and shout at a person and say, ‘This is my right. You can’t give it to somebody else.'” And, he adds, “Once that starts, it moves exponentially.” There’s no denying India’s landmark law relies on a flawed system that, currently, is inefficient, expensive and bedeviled by corruption. But there’s also no denying this: countless Indians are the better for it.