Global Food Security Index 2013:Results for Indiawith a survey of regional smallholder farming
Prepared by the Economist Intelligence UnitAugust 22, 2013
India’s 2013 Global Food Security Index resultsresults
Global Food Security Index overview
In 2012 the Economist Intelligence Unit was commissioned by DuPont to produce the innovative Global Food Security Index (GFSI), that presents a common language and evaluative framework to understand the root causes of food insecurity across a set of countries worldwide.The 2013 GFSI builds upon the evaluation criteria established in 2012, and includes two new countries—Ireland and Singapore—and two new indicators—corruption and urban absorption capacity.
What is the definition of food security used in the index?
d hi d fi i i h Gl b l d S i d 20 3
What is the definition of food security used in the index?Food security exists when people at all times have physical, social and economic access to sufficient and nutritious food that meets their dietary needs for a healthy and active life.
Based on this definition, the Global Food Security Index 2013:
ranks 107 countries
according to their relative levels of food security
using 27 indicators divided into three categories: Affordability, Availability, Quality & Safety
Looks at the drivers of food security from a national food system perspective, rather ooks at the drivers of food security from a national food system perspective, ratherthan an outcome perspective.
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What does the Index measure?
This Index examines food security comprehensively across the three internationally established dimensions of food security:
Availability,Availability,Affordability, and Utilisation—called “Quality and Safety” in the index
It looks beyond hunger (and other outcomes) to the underlying factors that influence the ability of consumers to access sufficient amounts of safe, high‐quality and affordable food in their country.
It establishes an international standard for food security to help guideIt establishes an international standard for food security to help guide regional and local efforts throughout the year.
It includes several unique qualitative indicators, developed and scored by Economist Intelligence Unit analysts, to capture drivers of food security not currently measured in any international dataset.
This year’s update includes two new indicators that aim to capture the effects on food security of corruption and an economy’s ability to cope with urbanisationwith urbanisation.
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Global Food Security Index: Evaluative frameworkThe Inde meas res food sec rit across 3 categories affordabilit a ailabilit and q alit and safetThe Index measures food security across 3 categories: affordability, availability, and quality and safety.
Affordability measures the ability of consumers to purchase food, their vulnerability to price shocks, and the presence of programmes and policies to support them when shocks occur.Availabilitymeasures the sufficiency of the national food supply, risk of supply disruption, national capacity to disseminate food, and research efforts to expand agricultural output.Quality and safety measures what is sometimes called “utilisation”. It assesses the variety and nutritional quality of average diets, as well as the safety of food.
Each category is comprised of a number of indicators: Affordability Availability Quality and Safety
Food consumption as a proportion of Sufficiency of supply Diet diversificationp p ptotal household expenditureProportion of population living under or close to the global poverty lineGDP per capita (at purchasing power parity, or PPP, exchange rates)
y pp yPublic expenditure on agricultural research and development (R&D)Agricultural infrastructureVolatility of agricultural productionPolitical stability risk
Government commitment to increasing nutritional standardsMicronutrient availabilityProtein qualityFood safetyp y, , g )
Agricultural import tariffsPresence of food safety net programmesAccess to financing for farmers
yCorruptionUrban absorption capacity
y
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India’s overall performance: 2012 GFSI vs 2013 GFSI2013 Index 2012 IndexScore / 100
All country average
Rank / 107
Overall score 44.2 53.6 70
Score / 100
All country average
Rank / 105
Overall score 45 53.7 66
2013 Index 2012 Index
1) Affordability 38.3 52.8 74
2) Availability 49.8 52.9 56
1) Affordability 38.4 52.3 70
2) Availability 51.3 53.8 52
3) Quality and Safety* 44.5 57.5 76 3) Quality and
Safety 44.2 56.5 73
( f )India scores moderately in the overall Index (70 out of 107) and across all three categories: affordability, availability, quality and safety with an overall score of 44.2 out of 100.Of the three categories that constitute the overall score, India fares best in food
il bilit l ti t ff d bilit d lit d f tavailability relative to affordability and quality and safety.Relatively low agricultural volatility is the primary driver of India’s stronger score in this category. India’s high import tariffs and low micronutrient availability result in lower scores in th th t t ithe other two categories.
* Owing to the addition of two new countries and the fact that rankings are relative, changes in a country's score do not always yield a concomitant change in rank.
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South Asia: Regional performance
India’s average food supply dropped from the first edition of the Index, accounting for its drop from first place to second in the food availability category for the South Asian region. Micronutrient availability and low protein quality constrain India’s score in food quality and safety, placing India third, behind Pakistan and Sri Lanka, out of the five South Asian countries.p g , ,
India ranks second in food affordability among South Asian countries, displaying a slightly below‐average percentage of household expenditure60
Overall Score in Global Food Security Index
percentage of household expenditure on food (49.5%) and a strong presence of government‐sponsored food programmes.
h f
48.644.4
39.735.3 33.8
40
50
60
However, the poorest 30% of Indian households spend more than 60% of their monthly expenditures on food.*
10
20
30
Compared with other South Asian countries, India applies high tariffs on agricultural imports, thus impacting both the affordability and, indirectly,
0
10
Sri Lanka India Pakistan Bangladesh Nepal
the availability of food.* Ganguly, Kavery and Ashok Gulatin. “The political economy of food price policy: a case study of India.” (April 2013).
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India: Affordability
India’s high agricultural import tariffs are one of the key challenges for food security in the country. Tariffs are significantly Agricultural Import Tariffs, %higher than those of other countries in the region and place it at 100th out of 107 countries in the GFSI for this indicator.
Agricultural import tariffs for India
31.4
26.3
25 0
30.0
35.0
are 31.4% versus an average of 18.8% in the rest of South Asia.
India and the region in general is
17.2 17.014.5
15.0
20.0
25.0
India, and the region in general, is vulnerable to food price shocks, resulting from high poverty levels and a dependency on the monsoon season.
I di i d l
5.0
10.0
India experienced a year‐long over 10% increase in food prices after a drought in 2009.*
0.0India Sri Lanka Bangladesh Pakistan Nepal
* Ganguly, Kavery and Ashok Gulatin. “The political economy of food price policy: a case study of India.” (April 2013).
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India: AvailabilityIndia’s political instability risk levels are better
80
Political Stability Risk, %
India s political instability risk levels are better (lower) than those of other countries in the region and place it at 20th for this indicator out of the Index’s 107 countries.
65
70
65
60
70
80
South Asia’s level of corruption is extremely high, but compared to its regional counterparts, India’s levels are relatively low.
45
2530
40
50
Sufficiency of food supply, especially the country’s average food supply, drives India’s overall rank in the availability category down to
46.5
0
10
20 56th.
The food supply average in India is 2,321 kcal/person/day, a drop from the 2,3520
Sri Lanka India Pakistan Bangladesh Nepal
Sri Lanka India Pakistan Bangladesh Nepal
kcal/person/day, a drop from the 2,352 kcal/person/day level in the first Index according to the FAO food balance sheet.Comparatively, India’s average food supply is 122 kcal/person/day fewer than the
South Asia average political stability riskkcal/person/day fewer than the
average in the rest of South Asia.
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India: Sufficiency of food supply
South Asia’s score for sufficiency of food supply is the second lowest out of any region covered in the Index.
I f 37 9 i l li h l hi h hIts score of 37.9 is only slightly higher than that of Sub‐Saharan Africa, the region with the weakest score (33.4) for this indicator. Latin America & Caribbean, the region that ranks just above South Asia on this indicator receives a score of 52.9.
India receives the second to lowest score in the region for sufficiency of supply and its score is below the regional average.
However India scores significantly betterHowever, India scores significantly better than Bangladesh, the country with the lowest score in the region for this indicator.
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India: Quality and SafetyIndia’s food quality and safety score is constrained by its
SOUTH ASIA:PROTEIN QUALITY (grams)
1 Pakistan 51.5
India’s food quality and safety score is constrained by its micronutrient availability score, and particularly by the availability of animal iron in the national diet, which is below the regional and world averages.
2 Sri Lanka 40.03 Bangladesh 37.94 India 37.65 Nepal 37.6
India scores fairly well in both availability of vegetal iron and vitamin A, but the country’s dietary availability of animal iron is .6 mg/person/day, while the regional average is 1 0 mg/person/day and thethe regional average is 1.0 mg/person/day and the Index average is 2.9.
Due to cultural factors, India’s food supply also contains relatively low quantities of animal
CONSUMPTION BY FOOD GROUP
products, especially protein. The greatest source of protein in India comes from wheat, rice, and pulses.
209 kcal/person/day
Vegetal ProductsAnimal Products
India scores above the regional average in dietary availability of vegetal iron.
2113 kcal/person/day
Source: FAO STAT
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Results focus: Public Expenditure on Agricultural R&D in India
Expenditure on agricultural R&D is widely considered essential to improving productivity in the agricultural sector. India's Brazil 728
PUBLIC EXPENDITURE ON AGRICULTURAL R&D(PPP 2009 DOLLARS)
R&D public spending is low relative to the size of its agricultural sector.
The country does spend a large amount Indonesia
India
China
82.8
757.1
1526
The country does spend a large amount on R&D relative to other emerging markets.
Though India has seen a steady positive trend in agricultural R&D investment over the past 0 500 1000 1500 2000
South Africa 165.8
Source: ASTIg y p g p
few decades, the number of government and university researchers has been dropping steadily since the late 1990s. There were 11,216 public R&D researchers in 2009 compared with 13,575 in 2000.
Some studies point out that a key to addressing the emerging challenges facing agriculture, will be research in areas such as promoting innovations, adapting to climate change, and fostering collaboration with institutions within and outside of the agricultural research system *system.
*Pal, Suresh, Michael Rahya, and Nienke Beintema. “India: Recent Developments in Agricultural Research.” (June 2012).
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Strengths and weaknesses: What the 2013 model shows about food security in India
India scores moderatel in most of the indicators in the Inde hich correlates ith its moderateIndia scores moderately in most of the indicators in the Index, which correlates with its moderate overall rank of 70 (out of 107).
The country’s strengths in the Quality and Safety category are its nutritional standards and food safety, while it is weak in protein quality.
India has a high presence of food safety net programmes and good access to financing for farmers; however a relatively low gross domestic product per capita explains its moderate scorefarmers; however, a relatively low gross domestic product per capita explains its moderate score in the Affordability category.
2013 Index: India’s Strengths and Weakness by Indicator
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Trends: What a year‐on‐year comparison of the Index says about food security in India
Indicator Rank change (2012 to 2013)*
Justification Increase or decrease?
NOTABLE RANK CHANGES IN THE 2013 INDEX
Food safety South Asia: 3rd to 1stOverall Index: 67th to 65th
India’s rank improved due to an increase in the percentage of the population with access to potable water. According to WHO estimates,92% f h l i h hi92% of the population now has this access.
Protein quality
South Asia: 3rd to 4thOverall Index: 85th to 89th
Despite a fall in rank relative to other countries, India experienced an increase in h f li i
gramsthe average grams of quality proteinconsumed. Other countries had even greater increases.
Sufficiency f l
South Asia: 3rd to 4thO ll I d 76th 79th
Rank decrease is driven by the drop in average f d l f hi h I di f ll f 76thof supply Overall Index: 76th to 79th food supply, for which India fell from 76th to86th.
*The addition to the 2013 Index of Ireland and Singapore, who both score ahead of India in all categories, must be taken into account when considering the rank changes from 2012 to 2013. Without the addition of these two countries, India’s overall index rank would increase by two in all of these indicators.
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l l l d ll d h k ll h d b l
India: National Food Security Bill and the GFSI
Results: ChileIn early July 2013, a National Food Security Bill was issued that seeks to alleviate hunger and battle malnutrition among the poor. The bill will:
Increase food subsidies from US$15bn to US$23bn.Provide 5kg of subsidised grain per month to 75% of rural and 50% of urban populations.g g p p pProvide free meals for pregnant women and lactating mothers, children between the ages of six months and fourteen years, malnourished children, and destitute and homeless people.
The bill has been criticised for failing to address corruption in the existing distribution system and improvements in the storage infrastructure.
The bill proposed to distribute the subsidised food through India’s existing food ration shops, which are notoriously corrupt. Studies have estimated that between 37% and 55% of the subsidised grain from this system are illegally diverted and sold in the open market.*
d h d ll d f f d k l h lOne study estimates that India will need 60m tonnes of food stocks to implement the National Food Security Bill. While the country’s actual food stocks could be more than 90m tonnes, India is likely to face a deficit in meeting the bill’s goals due to the loss of stocks due to inefficient storage.*
The Global Food Sec rit Inde sho s that one of main food sec rit challenges facing India is the foodThe Global Food Security Index shows that one of main food security challenges facing India is the food supply. The implementation of the National Food Security Bill would be a step towards improving India’s score in the sufficiency of supply indicator, especially the dependency on chronic food aid sub‐indicator. Though India already scores relatively well in the presence of food safety net programmes, the bill
*Biswas, Soutik. “Is India’s food security bill the magic pill?” (3 July 2013). would likely further improve the country’s score here as well.
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Smallholder farming
India’s Smallholder Farming Sector: An Overview
This report focuses on India’s smallholder farming sector, highlighting its current role within the Indian economy and society, recent developments that have impacted the sector, and the key risk and challenges faced by smallholders.
The presentation is divided into the following sections:IntroductionCurrent positionRural povertyKey indicatorsKey indicatorsPolicy and its impactChallenges and risksInnovation and its impactNew inputs and their impact
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Introduction
Agriculture plays a pivotal role in the Indian economy, contributing around 12% of gross domestic product and employing approximately 52% of the total workforce.The sector is dominated by small and marginal farmers, who together account for a largeThe sector is dominated by small and marginal farmers, who together account for a large and growing share of farm holdings and farmed area in India.
Defining smallholding farmsg gSmallholder farms are those agricultural holdings that cover an area of up to 2 hectares (ha).They consist of marginal farms (less than 1 ha)
The 11th and 12th Five Year Plans highlight agricultural development as an important
They consist of marginal farms (less than 1 ha)and small farms (greater than 1, but less than 2 ha).
component of a faster, more inclusive sustainable growth approach.The Plans recognise the challenges faced by smallholders and the threats to agricultural production, food security and rural incomes if these challenges are not met.
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Current position
The smallholding character of Indian agriculture is much more prominent today than ever before. At the national level:
100%
Smallholder farms in India 2010‐11
The number of smallholdings represent 44% of operated land and 85% of all holdings.Th l f t t h t t d t b
0%
50%
Holdings Area The value of output per hectare tends to be higher on smallholdings, but costs of cultivation are also higher.Smallholders’ contribution to total farm
Holdings Area
Small Other
Holdings with institutional creditoutput exceeds 50%, which is higher than their share of farmed land.Smallholders are financially distressed and penetration of institutional credit is low.30.0
40.050.0
(% total holding in group; 2006‐07)
Great regional variation exists in terms of contribution to output, value of output and net farm incomes
0.010.020.0
Marginal Small Medium Large All
farm incomes.
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Rural poverty
Rural poverty remains a serious problem for India, although greater policy focus on rural incomes (both agricultural and non‐agricultural) have had some success over the past decade.Latest government estimates place the number of people living in poverty at 217m in rural areas in 2011‐12, with rural poverty rates falling from 42% in 2004‐05 to 25.8% in 2011‐12.
40 0
Rural poverty 2011‐12 Latest data are highly contentious given choice over the poverty
20.0
25.0
30.0
35.0
40.0
ty ra
te (%
)
given choice over the poverty threshold.Seven* of the ten states that hold over 80% of smallholdings have poverty rates above 20%
0.0
5.0
10.0
15.0
20.0
Rural povert rates above 20%.
India’s most populous states of Uttar Pradesh and Bihar remain amongst the most impoverished.Odisha, Bihar and Madhya Pradesh saw the sharpest fall in rural poverty rates from 2004‐05 to 2011‐12.
*Uttar Pradesh, Maharashtra, Madhya Pradesh, Karnataka, Bihar, West Bengal, and Odisha.
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Key indicators
CensusHoldings
(m)Area
(Ha. m)Ave. Size(Ha.)
The number of smallholdings reached 117m and 71m ha were farmed in 2010‐11.Smallholdings are concentrated in 11 states*, which hold just over 80% all smallholder farm units andCensus (m) (Ha. m) (Ha.)
1990‐91 83.5 53.7 0.64
hold just over 80% all smallholder farm units and smallholder land area.Over 40% of smallholders are from socially disadvantaged groups (scheduled tribes and castes).C ib i f fl f1995‐96 92.8 58.8 0.63
2000‐01 98.1 62.0 0.63
Contribution to farm output reflects greater use of irrigation, fertilizers and high yielding crops:
Around 54% of the land farmed by
2005‐06 107.6 65.1 0.61
ysmallholders has access to irrigation, but smallholders often rent much of their irrigation equipment.75% of cropped area is treated with fertilizers
2010‐11(p) 117.1 70.5 0.6075% of cropped area is treated with fertilizers (180kg of fertiliser are applied per ha).The share of area under high yielding varieties (HYVs) and crop intensity is high.
*Uttar Pradesh, Maharashtra, Andhra Pradesh, Madhya Pradesh, Karnataka, Bihar, West Bengal, Tamil Nadu, Odisha and Rajasthan.
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Policy developments
India’s green revolution, which started in the mid‐1960s, resulted in more extensive and intensive farming methods, which enable self‐sufficiency and net‐exports in food grains.
The rapid increase in production and productivity during and after the green revolution largely reflects:and after the green revolution largely reflects:
More widespread irrigation systemsGreater use of fertilisersCultivation of high yielding crop varieties
Application of and benefit from Green Revolution strategies have been uneven across states and
Increased electrification/mechanisationExpansion of institutional credit
More recent focus on smallholdings
been uneven across states and socio‐ economic groups.
Economies of scale and scope encouraged through contract, collective and cooperative farming.Introduction of custom hiring facilities through farm machinery banks and cooperatives.Agricultural credit, insurance, and interest subsidisation schemes.
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Challenges
Limited access to quality public goods such as irrigation systems, electricity grids, road networks, and communication systems hinders effective access to inputs, markets, and information. Poor credit availability and affordability remain significant barriers to raising output and incomesPoor credit availability and affordability remain significant barriers to raising output and incomes for smallholdings despite policy to improve financing options.
Women and socially disadvantaged groups have a prominent role in smallholdings but theirprominent role in smallholdings, but their property rights and unhindered access to other productive resources (institutional credit, publicly provided inputs, extension services, and marketing outlets) remain problematic
Rapid economic growth, liberalisation, and globalisation encourage cost cutting, productivity gains and diversification into high value
marketing outlets) remain problematic.
gains, and diversification into high‐value agriculture. Higher transaction costs and risks associated with production, transportation and marketing are a disadvantage for smallholders.
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Risks
Smallholders face a number of individual and collective challenges and risks that can make it difficult to break from a vicious
Low risk taking
Low investment
Low productivity
make it difficult to break from a vicious cycle of low incomes, underinvestment, and restrained productivity growth.*
Low market focus
Low value additionLow margin
Smallholdings are vulnerable to environmental degradation and climate change, reflecting lower income and food security and less access to human, social, and financial capital and information.Low credit and insurance penetration make smallholders particularly vulnerable to p p yproduction and income shocks.High capital and maintenance costs, a mismatch between availability and need, and poor access to affordable credit can exclude smallholders from the benefits of mechanisation.Rising agricultural and non agricultural water use is exacerbating high production costs andRising agricultural and non‐agricultural water use is exacerbating high production costs and water access issues, as are poor land and water management practices.Private sector involvement in agricultural research, extension, and marketing tends to be limited to profitable, resource rich holdings rather than smaller marginal ones.
*Non‐Farm Opportunities for Smallholder Agriculture, Vijay Mahajan and Rajeev Kumar Gupta, IFAD (2011).
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Innovation
Technological and institutional innovations have been key aspects of Indian agriculture and future development in a number of critical areas could help smallholders raise agricultural productivity and farm incomes.
Institutional innovations have seen improved land and water management, a collective approach to input/product markets, and greater value/supply‐chain integration:
A i i i i t d i t t (i A dh P d h)An increase in irrigated area in some states (i.e. Andhra Pradesh)Collective farming approaches to reduce barriers to inputs, credit, extension and marketing (i.e. dairy cooperatives in Andhra Pradesh)Growing retail supermarket supply chains can increase security and margins.
Marketing research and information network innovations (i.e. Kisan Call Centres and E‐Choupal) have leveraged India’s ICT‐led development and mobile market, which has resulted in greater dissemination of market data and helped tackle the challenge of fragmentedin greater dissemination of market data and helped tackle the challenge of fragmented farms, weak infrastructure, and the presence of intermediaries.
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New inputs
New developments have been more immediately accessible to smallholders than traditional green revolution strategies.
Biotechnology led improved technologies have targeted small farmers including:small farmers, including:
Improved wheat varieties in Punjab and single cross hybrid technology for maize have significantly contributed to enhancing yields on smallholdings.The introduction of Bt cotton has been widely adopted by smallholdings and disadvantaged groups, resulting in a significant increase in net income.
Greater availability of smallholder specific machinery (i.e. low cost, light weight multipurpose equipment) is developing through custom hiring centres, such as those in Punjab Kerala Karnataka and Andhra Pradesh
Soil degradation is a particular problem facing smallholders. Organic and sustainable farming methods aim to focus on cost reduction (i.e. less damaging f tili d ti id ) ith t d i i ld l
Punjab, Kerala, Karnataka, and Andhra Pradesh.
fertiliser and pesticide use) without reducing crop yields or value.
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Summary
Agriculture is a large part of the Indian economy and smallholdings represent 44% of operated landAgriculture is a large part of the Indian economy and smallholdings represent 44% of operated land and their contribution to total farm output exceeds 50%.
India’s rural poverty rates are high and many smallholder farmers are affected by rural poverty: more than half of the ten states that hold over 80% of smallholdings have poverty rates above 20%.
Smallholder farmers face many challenges and risks that can make it difficult to overcome low incomes underinvestment and restrained productivity growth These include:incomes, underinvestment, and restrained productivity growth. These include:
Vulnerability to environmental degradation and climate changeLimited access to quality public goods Poor credit availability and affordability Higher costs for production, transportation, and marketing The effects of rapid economic growth, globalisation, and productivity gains of high value agricultureagriculture
India’s green revolution, technological and institutional innovations, and new biotechnology and smallholder machinery developments could help smallholders raise agricultural productivity and farm income
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