Food Policy Reforms: A Rapid Tour of Possibilities

Publication | May 2013

This paper takes a rapid tour of the reform possibilities in the areas of storage and logistics, procurement and distribution. The paper proposes a method for determining the needs for seasonal storage and discusses what ought to be targets for capacity creation.

Reform of India's food policies is on the front burner. This paper takes a rapid tour of the reform possibilities in the areas of storage and logistics, procurement and distribution. The paper proposes a method for determining the needs for seasonal storage and discusses what ought to be targets for capacity creation. This is followed by an examination of the policies toward storage and reforms in procurement. The paper lays out the principal components of reforms in distribution. These are pursued in greater detail in the context of three states: Chhattisgarh, Gujarat and Madhya Pradesh.

Findings

The social gains of effective distribution reforms are large and therefore worthy of government support. However, the direct gains of these reforms do not accrue to those who bear the costs of reforms. For most states, the amount spent on food subsidy from own resources is negligible. Therefore, they are not direct gainers from distribution reforms. On the other hand, it is the central government that is the major financial beneficiary. Therefore, this calls for central policies that incentivize distribution reforms in states through cost-sharing and other means.

Contents 

  • Introduction
  • Background: A PDS Primer
  • Reaching the poor
  • The changing policy: context and future directions
  • Storage and logistics: how much capacity is needed?
  • Policies for enhancing storage
  • Procurement reforms: decentralized procurement
  • Procurement reforms: computerizing the procurement network
  • Distribution reforms
  • Individual state experiences
  • Conclusions
  • References