05 March 2011

Cash Transfers is Not the Answer to Food Security

It is being taunted that cash transfers will sort out all problems and bring about efficient and effective targeting of many welfare schemes. One would not dismiss the merits outright, but would like to state that this argument is based on the assumption (rather a presumption by policy makers) that nothing is wrong in the real sector.

This does not make sense when there is food shortage. Providing cash transfers to poor consumers (who could also be producers) will not enable them to buy the requisite food as and when they went.  Thus the solution misses the fundamental aspect that a financial/monetary solution cannot be applied to a problem that requires intervention in the real sector.

In day-to-day discourse one hears the example of cash for bicycles being given to girl students in Bihar as an incentive to make them attend schools. Yes, this is a direct transfer, but one that is tied with a real thing, a  bicycle.Similarly, if welfare schemes are to be successful in addressing food security, it has to be tied with the availability of food. Chattishgarh, not an example of governance in many other spheres, has done good in addressing this through the public distribution system.

An effective public distribution system, no doubt, reduces leakages from the system, and would help improve access to food. Nevertheless, the question of food security or food shortage is broader - not enough is being produced. The irony is that the producers of food (either as cultivators in small farms or labourers). who do not get enough returns also happen to be the consumers of food.

The net returns from input-intensive cultivation is decreasing because of increasing costs.  Nevertheless, this has been propagated by a thinking that there is no alternative (TINA). There are alternatives but it is not like one-size fits all. Usage of low-external input sustainable agriculture by taking into consideration local specificity make many alternatives exist (MAE; which literally is a variant of mother is some Indian languages). Like mother, it can adapt to different situations and open up different possibilities. They will differ from region-to-region, and from crop-to-crop, among others. Whatever it is, it ought to be locally grounded to make the alternative cost-effective and increase returns.

Choice of multiple crops at the farm/household level will address a variety of food requirements necessary for better nourishment. This reminds me of wadi (orchard) projects in tribal pockets of Thane adjoining Mumbai. Such interventions along with water harvesting structures facilitated production of cereals with fruits and some seasonal vegetables. This stopped out-migration and improved nutrition intake of the households. Similar  initiatives are replete across the country. Some of them are even integrated with livestock management, fishery, and poultry  among others. The oft-quoted example given in recent years is the  community managed sustainable agriculture in Andhra Pradesh. If scaled up effectively this can address the food security concerns.

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