WTO [world trade organization] and India's food security system: challenges ahead

This study focuses attention upon chronic aspects of food insecurity of India. It was carried out with the following objectives: to examine the present status of food availability and PDS, to study the impact of liberalization policies upon agricultural marketing and external trade, and to suggest measures to strengthen the food security management system. During the post-independence period, food availability in India was increased through imports, particularly of wheat under PL 480. To ensure entitlements to certain essential commodities, PDS, a key element of the government's food security system, was put in place through a network of fair price shops (FPS) across the country. Linking of the procurement and stocking operations to the PDS standardized farm output and income and provided sufficient operational and pipeline stocks for normal distribution through FPS and buffer stocks to tide over the periods of lean production. However, since mid-80s the thrust on agricultural production and the PDS came under strain due to agricultural reforms, increase in import-export quotas and reduction in subsidies. While increase in the cost of production has led to continuous upward revision of minimum support prices (MSP) that has eroded the competitiveness of wheat and rice of exports. On the other hand, issue prices of these have increased and revamped PDS was adopted which had universal coverage of areas but population below poverty line (BPL) was supplied rice and wheat at a highly subsidized rate. Due to lower quota per BPL family and a narrow margin between issue and market prices for the above poverty line (APL) off take from the PDS has declined. So the stocks of these cereals got piled up without many possibilities for exports. With the signing of WTO treaty, Agreement on Agriculture (AOA) has come to pose a new challenge to the Indian food security system. As a result cheap imports of these cereals are becoming available. Though it ensured food security but it did not constitute a strategic instrument of the food security system