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«Jomo Kwame Sundaram Vikas Rawal Michael T. Clark Tulika Books Published by Food and Agriculture Organization of the United Nations (FAO) Viale delle ...»

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After India introduced structural adjustment programmes in the early 1990s, the principle of universal minimum entitlement was abandoned and coverage of the PDS progressively reduced (Swaminathan, 2000). In June 1992, geographical targeting was introduced under the Revamped PDS, with beneficiaries in specified backward and inaccessible blocks across the country being given higher grain entitlements than beneficiaries in the rest of the country. In 1997, different entitlements were introduced for households identified as below the poverty line (BPL) and for others, under the Targeted Public Distribution System (TPDS). Two changes were introduced in the PDS in 2000: first, the central government stopped subsidizing grain provided to households not classified as poor; and secondly, the central government introduced another category, of the poorest and most vulnerable, who were given greater grain entitlements at highly subsidized prices. On the other hand, with the introduction of differentiated entitlements, targeting was progressively narrowed and persons not identified as poor were excluded. It has been noted that the TPDS targets subsidies very narrowly, and a large proportion of food-insecure and vulnerable households are excluded from it.

The PDS is operated jointly by the central and State governments. The central government has the responsibility for procurement, storage, and provision of grains to the States. Using estimates of poverty, the central government specifies the quotas of each State for obtaining grain for different categories of beneficiaries. The States are provided grain at the central issue prices specified for each category of beneficiary. The State governments are responsible for the identification of the different target groups and the distribution of grain to them through a network of fair price shops. Given high food inflation around the end of the 2000s and large-scale exclusion of the poor from the TPDS, many State governments introduced additional subsidies and entitlements for different categories of beneficiaries in recent years. For example, Tamil Nadu re-introduced universal coverage of the PDS in 2006. In 2011, Chhattisgarh expanded the PDS under a State-level Food Security Act to provide subsidized grain to 90 percent of the population. While the introduction of narrow targeting has resulted in substantial exclusion of the poor and increased leakages from the programme, the expansion of its coverage in many States and the modernization of supply-chain management Social Protection 45 since the late 2000s have contributed to a very significant decline in leakages from the PDS, contributing to its remarkable revival (Drèze and Khera, 2015;

Khera, 2011a, 2011b; Krishnamurthy, Pathania, and Tandon, 2014). Revival of the PDS has been associated with an increased proportion of households buying grain through PDS, rising from only 22 percent in 2004–05 to about 45 percent in 2011–12 (Himanshu and Sen, 2013).

As part of a larger move towards rights-based entitlements, the central government introduced the National Food Security Act (NFSA) in 2013 to revamp the TPDS (Ghosh, 2014; Sinha, 2013). Under the NFSA, 75 percent of the rural population and half of the urban population are entitled to subsidized grain. The NFSA promises to provide 5 kilograms of grain per person per month at subsidized prices to beneficiary households. An important feature of the NFSA is that it expanded the basket of grains to include millets and pulses, in addition to rice and wheat traditionally provided under the PDS. This is expected to have significant positive implications for nutritional outcomes.

The NFSA also has specific provisions for nutritional support to pregnant and lactating women, as well as children.

India spends only about 1.2 percent of its GDP on the Public Distribution System (Ghosh, 2014). With a network of more than 462,000 fair price shops distributing grain annually to about 180 million households, India’s PDS is the largest food distribution programme of its kind in the world. It also has been the most important instrument of India’s public policy against poverty and undernourishment. According to large-scale survey data for 2009–10, the PDS was responsible for lifting 38 million people out of poverty in 2009–10 (Drèze and Khera, 2013; Himanshu and Sen, 2013). When fully implemented, the National Food Security Act is expected to further strengthen the PDS in dealing with food insecurity and malnutrition.

Brazil’s food acquisition programme, Programa de Aquisição de Alimentos (PAA), is remarkable in many respects. The PAA, started in 2003 as part of the Fome Zero Programme, reorganized and expanded the earlier system of price support to farmers. Through the PAA, price support was extended to resource-poor family farmers. Figure 3.1 shows the large increase in number of beneficiaries and public expenditure on PAA between 2003 and 2012. The unique feature of the programme was that, besides procurement of central food stocks for price stabilization and food security, it also created marketing channels for local procurement of food through farmers’ organizations and local networks for sale to locally food-insecure populations. Specific initiatives were taken to create opportunities for farmers to produce and sell vegetables, native fruits, grains, nuts, milk, and other nutritious food items.

Food items procured from family farmers through the PAA were supplied to food-insecure households as well as to schools for their meal programmes (Peraci and Bittencourt, 2011; Silva et al., 2011; Soares et al., 2013; Swensson, 2015). Many assessments have shown that these initiatives have significantly improved the dietary diversity of both family farmers and food-insecure consumers (for reviews, see Grisa and Schmitt, 2013; Soares et al., 2013).





46 Ending Malnutrition Figure 3.1 Brazil: Public expenditure on and number of beneficiary family farmers, Programa de Aquisição de Alimentos (PAA), Brazil, 2003–12 Source: Based on data from Soares et al. (2013).

Food assistance in emergencies While many countries have discontinued general food provisioning programmes, it is common to use food provisioning to deal with disruption in food supplies because of disasters, emergencies and economic and humanitarian crises. For example, food assistance and food subsidies were relied upon by many countries to deal with the 2008 food price crisis.

According to FAO’s Global Information and Early Warning System for Food and Agriculture (GIEWS) database, five countries in Africa, five in Asia, and six in Latin America and the Caribbean instituted policy changes in favour of food subsidies/food assistance programmes in response to rising prices.¹ Of the ten African countries covered by the Monitoring and Analysing Food and Agricultural Policies (MAFAP) programme of FAO, six used distribution of subsidized food as a measure to deal with food price rises in 2008 (FAO, 2013a).

School feeding programmes In contrast with the decline of programmes to subsidize food, food assistance in the form of school-meal programmes is being used more widely across countries (Figure 3.3). A World Food Programme report estimated that 368 million children the world over are fed in schools daily (World Food Programme, 2013). India’s Mid-day Meal Scheme is the largest school

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Figure 3.2 Brazil: Public expenditure on and number of children provided meals through Programa Nacional de Alimentação Escolar (PNAE), 1995–2012 Source: Based on data from Soares et al.

(2013) and Swensson (2015).

feeding programme in the world, feeding over 100 million children daily.

Brazil’s school feeding programme, Programa Nacional de Alimentação Escolar (PNAE), feeds over 45 million children daily. The PNAE, which was started in 1954, saw a major expansion after its integration into the Fome Zero programme in 2003 (Figure 3.2). The PNAE is particularly noteworthy for the efforts taken to improve the nutritional quality of meals served.

With its linkages to the Food Acquisition Programme (PAA), the PNAE has substantially increased inclusion of locally sourced fruits and vegetables in school meals. As a result, the proportion of schools in Brazil serving fruits in school meals increased from 28 percent in 2004 to 62 percent in 2006.

Similarly, the proportion of schools serving fresh vegetables in school meals increased from 57 percent in 2004 to 80 percent in 2006, and to 90 percent in 2010 (Sidaner, Balaban, and Burlandy, 2013).

The European School Milk Scheme was started in the late 1970s to provide subsidized/free milk and dairy products to schoolchildren. In 2009– 10, the European Union (EU) initiated a major programme to provide free fruit to children in schools. The scheme provides free fruit to over 8 million children in the EU. The EU covers 50–75 percent of the cost of fruit, with the rest borne by participating countries. In 2014, the EU merged its School Milk Scheme and its School Fruit Scheme into a single scheme (WHO, 2015).

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vulnerable. Such programmes directly result in increased food consumption, and thus have a direct impact on undernourishment and malnutrition.

Food-for-work programmes not only provide direct income support to manual wage earners, who are typically among the poorest sections in a country’s population, but can also have an indirect effect on incomes by raising wage levels in labour markets. Food-for-work programmes can also make a significant contribution towards building public infrastructure.

School-meal programmes have been shown to have a very positive impact on school enrolment as well as on the nutritional status of schoolchildren.

School feeding programmes have also been used to mitigate the impact of various kinds of crises (Bundy et al., 2009).

Food provisioning programmes, if based on procurement of food commodities from local farmers, can also support smallholder agriculture, promote production of more nutritious and less resource-intensive crops, and induce more sustainable land use. The 2013 State of School Feeding Report showed that, like all other food provisioning programmes, school feeding can help create demand for domestic agriculture. Local procurement of food not only helps increase demand for agriculture, but also facilitates the provision of diverse, nutritious, and unprocessed food to children (World Food Programme, 2013).

Food provisioning programmes based on domestic procurement of food can be designed to reduce the exposure of producers to price fluctuations and to ensure that they get decent remuneration through prices. Food provisioning programmes can also be used to induce dietary changes in favour of more nutritious food items.

A major advantage of entitlements specified in terms of food is that, unlike cash entitlements, food entitlements are automatically protected against food price inflation. This can be extremely important in times of high food-price inflation, which typically increases food insecurity.

It may also be pointed that food provisioning programmes, in general, have been popular among beneficiaries wherever they have been introduced in developing countries. Many studies from across different countries in Asia and Africa have reported preference of beneficiaries for in-kind provision (or a combination of cash and in-kind entitlements) over cash entitlements (Ahmed et al., 2009; FAO, 2012; Ghosh, 2011; Hoddinott, Sandström, and Upton, 2013; Khera, 2011a; Sabates-Wheeler and Devereux, 2010).

Although food provisioning programmes have many advantages over other forms of social protection by ensuring access to adequate and nutritious food, the capacity of governments to run large-scale food distribution programme is limited by the World Trade Organization’s Uruguay Round agreement. Public procurement of food from farmers through price support programmes is considered trade-distorting and classified in the Amber Box in WTO’s current rules. Under these rules, the difference between Social Protection 49 prices offered to farmers under a public procurement programme and prices prevailing in 1986–88 is multiplied by the total output potentially eligible for support (not the actual quantity procured), to calculate the level of price support provided by a country. The price support thus computed is considered part of Amber Box subsidies, subject to restrictions on the Aggregate Measure of Support.

Over time, as world food prices have increased to levels far higher than the prices prevailing in 1986–88, the WTO restrictions on price support and public stockholdings have stifled food distribution programmes. On the other hand, these restrictions have done little to reduce the vast disparities between levels of support to agriculture provided by developed and developing countries. Despite restrictions imposed under the agreement, most developed countries have retained high levels of support for agriculture by shifting most of their subsidies to the unlimited “Green Box” of forms of support, not restricted by the Agreement on Agriculture.

Green Box subsidies in developed countries, although not directly linked to levels of production, have helped farmers to innovate, invest, and increase productivity by providing additional resources for investment and by effectively reducing risks associated with investment. Such support has also extended social protection to the countryside. On the other hand, lacking comparable levels of support, cultivation by small producers in developing countries has become even less viable and uncompetitive. The WTO does not restrict Green Box-types of support to agriculture. However, administrative and other constraints limit the possibility and feasibility of developing countries using Green Box subsidies. The WTO provisions for policy instruments such as crop insurance to be counted in the Green Box are extremely restrictive. Green Box measures, such as decoupled payments – lump cash transfers to farmers – are not feasible in most developing countries because of domestic governance bottlenecks such as the absence of data, a lack of well-defined land titles, informal markets, frequent market failures, and insufficient rural financial facilities.



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