1. PUBLIC DISTRIBUTION SYSTEM AND NUTRITIONAL SECURITY Sonalde Desai

2. Shame of malnutrition  High rates of malnutrition in India  Policy response – National Food Security Act NFSA) 2013  Public Distribution System a Cornerstone of NFSA  Until now PDS has provided subdised grains to households with Below Poverty Line or Antyodaya cards  NFSA set for an expansion of population covered

3. But food security = nutritional security?

4. Forensic number crunching based on casual observation Proportion of Children Under 5 Underweight (Weight for age) – IHDS 2004-5 Household Income Quintile No BPL CardBPL Card Poorest0.530.52 2nd Quintile0.530.52 3rd Quintile0.450.51 4th Quintile0.380.45 Richest0.290.32 All0.440.48

5. No reason why BPL card should be associated with malnutrition  Could be due to unobserved characteristics of people with BPL cards  Or it has something to do with food consumption associated with BPL card  Or just plain old bad data  ……I have still not come to any conclusion on this but it did start me on a journey of exploring what BPL card ownership means for household food consumption

6. Monthly Per Capita Income by Ration Card Type – Overlapping distributions Exclu sion Leakage

7. Allows for an interesting comparisons  How do households with BPL cards at the same income level differ from others in their consumption patterns?  Regressions not quite useful in this situation because while the distributions are overlapping they have a different shape, particularly for urban areas

8. Analysis based on matched households  Propensity Score Matching  Income decile  Urban residence  Household education level  Household Size  Ownership status of home  Cultivating household  Owns milch animals/chickens  Ownership of consumer durables/housing quality  STATE OF RESIDENCE (Exact match)  Nearest neighbour matching, well balanced

9. Analysis based on India Human Development Survey (2004-5) Survey of 41,554 households in 33 states/UT carried out in 2004-5. Only data source for income and consumptio n information. Comparison of NSS and IHDS Consumption Quantities Per Capita Per Month UrbanRural NSSIHDSNSSIHDS Cereal (Kg)9.929.8112.1212.41 Milk (Litre)5.103.913.872.77 Sugar (Kg)0.871.040.740.78 Pulses (Kg)0.820.500.700.57 * Author's Calculations based on NSS 61st Round & IHDS 2004-5

10. BPL cards seem to do what they are supposed to  Greater per capita consumption of cereals  By 246 grams per capita per month (but minor given mean consumption of 11.66 kg)  Lower expenditure on cereals by Rs.8 per month  Lower expenditure and higher consumption

11. BUT… a host of unanticipated effects  Cereals seem to replace:  Pulses – consumption lower by 60 grams  Milk – consumption lower by 120 ml  Slight decline in vegetable and fruit consumption  Also BPL card increases consumption of kerosene by 367 litres per person.  Kerosene and sugar are driving forces getting people to put up with the hassles of dealing with PDS shops.

12. How did we forget elementary microeconomics?  When price of any item falls, it replaces more expensive items unless it is an inferior good  In this case, higher cereal consumption linked to reduction in dietary diversity  If caloric deficit is the problem for India’s nutritional status, this could be fine. Expansion of PDS would lead to cheaper and more calories.  If lack of dietary diversity and micronutrient deficiency is related to poor nutrition, this is a problem.

13. Can this explain higher malnutrition among BPL card holders at higher income levels? Proportion of Children Under 5 Underweight (Weight for age) – IHDS 2004-5 Household Income Quintile No BPL CardBPL Card Poorest0.530.52 2nd Quintile0.530.52 3rd Quintile0.450.51 4th Quintile0.380.45 Richest0.290.32 All0.440.48

14. Over time PDS has become more rather than less important…  As an impressive paper in EPW by Himanshu and Sen (Nov 2013) argues:  PDS has become more efficient controlling leakages  Difference in market and PDS prices have risen  It would be interesting to repeat this analysis for more recent data  IHDS-II from 2011-12 will be a good source.

15. IHDS also finds improvement in targeting between 2005 and 2012 Significant increase in Antyodaya cards Supposedly about 2.5 crore bogus ration cards cancelled since 2005

16. Are there any radical alternatives to PDS?  Cash transfers much talked about  But no discussion of environment/economics/nutrition linkages  Studies in Africa have shown linkages between biodiversity and nutrition. If that holds, regionally specific programs for improving production and distribution chains for increasing nutritional diversity may be needed

17. Five years from today …  Scenario 1: Malnutrition has fallen, is it because of NFSA and expanded PDS program must be continued indefinitely?  Scenario 2: Malnutrition remains stagnant, is it because PDS is functioning badly or is it because expanded cereal distribution has only a limited impact on nutrition

18. Plea for Sensible Data Collection The silver bullet of RCT has its own challenges e.g. Cash Transfer Experiment. But without alternative data, how will we know?  We have undertaken a massive expansion of food security without knowing anything about recent malnutrition levels  Proposed health surveys may provide nutrition benchmarks but will not help understanding causal relationships  Nutrition data come from health surveys, no income/consumption linkages  Real problems with using expenditure as a proxy for income when it comes to food consumption decisions  E.g. festivals and other events lead to more food consumption and higher expenditure. Skews the relationship between purchasing power and food consumption  Need better linkages with remote sensing satellite data to identify locational and climatic vulnerabilities

19. IEO could take a lead in ….  Identifying data needs for future policy discourse