Research Paper No. 2006/98 The Public Distribution Systems of Foodgrains and Implications for Food Security A Comparison of the Experiences of India and China
Zhang-Yue Zhou1 and Guanghua Wan2
September 2006 Abstract A comparative study of the public distribution systems of foodgrains in India and China is expected to reveal lessons and experiences that are valuable to policymakers. This is particularly important for developing countries in their endeavour to ensure food security. This paper undertakes such an exercise. The main features and developments of the two public distribution systems are first highlighted. This is followed by a comparative analysis of their similarities and differences. The role of public foodgrain distribution systems in ensuring food security is then evaluated. Finally, policy implications are drawn. Keywords: public distribution system, food security, poverty, food subsidy, India, China JEL classification: I31, I38, Q11, Q18
Copyright © UNU-WIDER 2006
1 School of Business, James Cook University, Australia email: firstname.lastname@example.org; 2 UNU-WIDER, Helsinki, email: email@example.com
This paper was prepared for the UNU-WIDER project on Hunger and Food Security: New Challenges and New Opportunities, directed by Basudeb Guha-Khasnobis. The project was carried out in collaboration with the Indian Council of Social Science Research (ICSSR) and the UN Food and Agriculture Organization (FAO). UNU-WIDER gratefully acknowledges the financial contributions to its research programme by the governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal Ministry of Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida) and the United Kingdom (Department for International Development). ISSN 1810-2611 ISBN 92-9190-882-7 (internet version)
Acknowledgements We wish to thank the participants at the Jaipur workshop for their comments on the paper. In particular, we wish to thank Dr Benjamin Davis of the Food and Agriculture Organization of the United Nations and Professor S. S. Acharya of the Institute of Development Studies (Jaipur) for their constructive and helpful suggestions.
Acronyms APL BPL FCI PDS (families) above poverty line (families) below poverty line Food Corporation of India public distribution system
FAO Food and Agriculture Organization MSP minimum support price PL480 global food aid programme established by the Agricultural Trade Development and Assistance Act of 1954 into law as US Public Law 480, commonly known as PL480 TPDS targeted public distribution system (of India)
The World Institute for Development Economics Research (WIDER) was established by the United Nations University (UNU) as its first research and training centre and started work in Helsinki, Finland in 1985. The Institute undertakes applied research and policy analysis on structural changes affecting the developing and transitional economies, provides a forum for the advocacy of policies leading to robust, equitable and environmentally sustainable growth, and promotes capacity strengthening and training in the field of economic and social policy making. Work is carried out by staff researchers and visiting scholars in Helsinki and through networks of collaborating scholars and institutions around the world. www.wider.unu.edu firstname.lastname@example.org
UNU World Institute for Development Economics Research (UNU-WIDER) Katajanokanlaituri 6 B, 00160 Helsinki, Finland Camera-ready typescript prepared by Liisa Roponen at UNU-WIDER The views expressed in this publication are those of the author(s). Publication does not imply endorsement by the Institute or the United Nations University, nor by the programme/project sponsors, of any of the views expressed.
The issue of food security has been around for a long time and the right to adequate food and to be free from hunger have been repeatedly affirmed in...
References: Acharya, K. C. S. (1983). Food Security System of India: Evolution of the Buffer Stocking Policy and Its Evaluation. New Delhi: Concept Publishing Company. Ahluwalia, D. (1993). ‘Public Distribution of Food in India: Coverage, Targeting and Leakages’. Food Policy, 18 (1): 33-54. Anon. (1995). ‘What Does the Reintroduction of Coupons Mean?’. Beijing Economic News, 17 September. Anon. (1996a). ‘Shanghai Adopts New Grain and Cooking Oil Distribution Methods’. Grain and Cooking Oil Market News, 8 March. Anon. (1996b). ‘Beijing Raised Grain Sale Prices’. Beijing Economic News, 2 July. Beijing Review (1994). ‘Social Security System Takes Shape’. Beijing Review, 21-27 February: 6. Cheng, S. H., P. Lu, and X. G. Yan (1987). ‘Decontrolling Grain Price Is an Inexorable Trend of the Development of Commodity Economy’. Problems of Agricultural Economics, June: 34-5. Dantwala, M. L. (1967). ‘Incentives and Disincentives in Agriculture’. Indian Journal of Agricultural Economics, 22: 1-25. Dantwala, M. L. (1993). ‘Agricultural Policy: Prices and Public Distribution System: A Review’. Indian Journal of Agricultural Economics, 48: 173-86. Deng, Y. M. (1991). ‘A Proposal on the Reform of the Grain Ration System and an Analysis of the Extent of Possible Support from Urban Dwellers’. Chinese Rural Economy, April: 10-15. Dev, S. M. (2002). ‘Public Intervention for Poverty Reduction in Asia: Macro Policies and Direct Programs’, in S. S. Acharya, S. Singh, and V. Sagar (eds), Sustainable Agriculture, Poverty and Food Security: Agenda for Asian Economies. Jaipur: Rawat Publications, 433-62. Dev, S. M., and M. H. Suryanarayana (1991). ‘Is PDS Urban Biased and Pro-Rich’. Economic and Political Weekly, 12 October, 26: 2357-66.
Ding, H. P. (1997). ‘A Study on Issues Related to the Reforms of China’s Social Security System’. Economics of Finance and Trade, 6: 48-9. Du, Y. T. (1989). ‘Retrospect and Analysis on the Grain Prices and Subsidy Policy in China’. Reference Materials for Economic Research, 26: 17-32. Dutta, B., and B. Ramaswami (2001). ‘Targeting and Efficiency in the Public Distribution System: Case of Andhra Pradesh and Maharashtra’. Economic and Political Weekly, 36 (18): 1524-32. FAO (2002). ‘World Food Summit: Five Years Later, Summit News’. Available at: www.fao.org/worldfoodsummit/english/newsroom/news/8580-en.html. Accessed 13 January 2006. FAO (2004). The State of Food Insecurity in the World 2004: Monitoring Progress towards the World Food Summit and Millennium Development Goals. Rome: FAO. George, P. S. (1996). ‘Public Distribution System, Food Subsidy and Production Incentives’. Economic and Political Weekly, 28 September. GOI (Government of India) (various years). Economic Survey. New Delhi: Ministry of Finance, Government of India. Gu, Q. F. (1990). ‘Grain Price Subsidy in China and Government Intervention in Grain Marketing, 1977-1986’. Grain Economy Research, 1: 21-4. Guo, M. Q. (2004). ‘On the Practice of a Social Security System in Rural Areas’. Journal of Chinese Youth College of Politics, 1: 112-6. Huang, Y. X. (1990). ‘The Grain Ration System Has to be Reformed Urgently’. Chinese Grain Economy, 6: 22-3. Jha, S. (1992). ‘Consumer Subsidies in India: Is Targeting Effective?’. Development and Change, 23 (4): 101-28. Jha, S., and P. V. Srinivasan (2004). ‘Achieving Food Security in a Cost Effective Way: Implications of Domestic Deregulation and Reform under Liberalized Trade’. MTID Discussion Paper No. 67. Washington, DC: International Food Policy Research Institute. Jharwal, S. M. (1999). Public Distribution System in India Reassessed. New Delhi: Manak Publications. Jiao, K. P. (1994). ‘The Social Security System in Reform’. China Today, 43: 18-20. Ka, L. (1995). ‘How to Comprehend the Reintroduction of Coupons’. Economic Daily, 22 February: 2. Ke, B. S. (1990). ‘Grain Price Systems in State Grain Marketing Sector and the Subsidy Problem’. Chinese Rural Economy, November: 44-50. Kozel, V., and B. Parker (1998). ‘Poverty in Rural India: The Contribution of Quantitative Research in Poverty Analysis’. Washington, DC: World Bank. Mimeo. Liu, X. A. (1998). ‘Towards a New Approach to Institutional Change in Rural China since 1949’. Brisbane: Griffith University. PhD thesis.
Liu, Y. Q. (1986). ‘On the Development of Grain Production and Marketing: Some Viewpoints on the Decontrol of Grain Price’. Problems of Agricultural Economics, June: 23-5. Liu, Y. Z., B. B. Zhou, H. B. Gao, and J. Chen (1986). ‘Non-Commercialization, SemiCommercialization and Commercialization: the Crux of and Solution to China’s Grain Problem’. Problems of Agricultural Economics, June: 18-22. Ma, L. Y. (1987). ‘The Relative Low Grain Price and the Ideas to Reform It’. Chinese Rural Economy, November: 4-7. Pal, S., D. K. Bahl, and Mruthyunjaya (1993). ‘Government Interventions in Foodgrain Markets: The Case of India’. Food Policy, 18 (5): 414-27. Parikh, K. S. (1994). ‘Who Gets How Much from PDS - How Effectively Does It Reach the Poor?’. Sarvekshana, January-March. Radhakrishna, R., K. Subbarao, S. Indrakant, and C. Ravi (1997). ‘India’s Public Distribution System: A National and International Perspective’. WB Discussion Paper No. 380. Washington, DC: World Bank. Ramaswami, B. (2004). ‘Reforming food Policies: The Costs and Impacts of Food Subsidies’. Paper presented at the Conference on Anti-Poverty and Social Policy in India, 2-4 January. Shen, H. (1999). ‘Grain Coupons and China’s 50 Years of Feeding the Population’. Fujian Reforms, 8-9: 34-9. Shi, R. J. (1997). ‘Establishing a Social Security System with Chinese Characteristics’. Journal of Lanzhou University, 25: 10-14. Spitz, P. (1985). ‘The Right to Food in Historical Perspective’. Food Policy, 10: 306-16. SSB (State Statistical Bureau) (various years). China Statistical Yearbook. Beijing: China Statistical Press. Swaminathan, M. (2000). Weakening Welfare: The Public Distribution of Food in India. New Delhi: LeftWord Books. Tian, W. M., and Z. Y. Zhou (2005). ‘Developments in China’s Grain Policies’, in Z. Y. Zhou and W. M. Tian (eds), Grains in China: Foodgrain, Feedgrain and World Trade. Aldershot: Ashgate, 11-23. Tyagi, D. S. (1990). Managing India’s Food Economy: Problems and Alternatives. New Delhi: Saga Publications. Wei, L. Y. (2003). ‘On Social Security for Rural Workers in Urban Areas’. Journal of Jiangxi Administration College, 5: 67-70. Yan, Z. X. (2003) ‘Government and Social Security: Theory and Policy’. Theory and Practice of Finance and Economics, 24: 44-7. Yu, X. H. (2003). ‘Issues Concerning the Establishment of a Social Security System for Rural Residents’ (in Chinese). The Economist, 1: 180-1. Yu, Z. L. (1987). ‘On Commercialization of Grains’. Problems of Agricultural Economics, June: 25-8.
Zhao, F. S., and X. Q. Qi (eds) (1988). Grain in Contemporary China. Beijing: Chinese Social Sciences Press. Zhou, Z. Y. (1997). Effects of Grain Marketing Systems on Grain Production: A Comparative Study of China and India. New York: The Haworth Press. Zhou, Z. Y. (1998). ‘China’s Food Security Practice: Retrospect and Prospect’. Paper presented to the Taipei International Conference on East Asian Food Security Issues in the 21st Century held 16-17 April. Taipei, Taiwan. Zhou, Z. Y., and V. P. Gandhi (2000). ‘Are Expenditures on a Government Food Distribution System Justified in Developing Countries?: Perspectives from a Comparative Study of India and China’. Paper presented to the 24th conference of the International Association of Agricultural Economists, August. Berlin. Zhou, Z. Y., and W M. Tian (2005). ‘China’s Grain: An Issue that is Here to Stay’, in Z. Y. Zhou and W. M. Tian (eds), Grains in China: Foodgrain, Feedgrain and World Trade. Aldershot: Ashgate, 229-39. Zhou, Z. Y., X. A. Liu, and N. Perera N. (2001). ‘Nutritional Poverty and the Role of PDS in India: An Inter-State analysis’, in S. S. Acharya and D. P. Chaudhri (eds), Indian Agricultural Policy at the Crossroads. New Delhi: Rawat Publications, 515-69.
Please join StudyMode to read the full document