IGIDR Annual Report 2008-2009 - Indira Gandhi Institute of ...

Research ActivitiesPolitical Weekly, 2008, Vol. XLIII, No. 43, pp. 91-101)examines issues and their implications.Continuing on the issue of food security M. H.Suryanarayana and Dimitri Silva (in ―Poverty andFood Insecurity in India: A Disaggregated RegionalProfile,‖ in Dev, S. Mahendra and N. ChandrasekharaRao (eds.): India: Perspectives on EquitableDevelopment, 2009, Academic Foundation, New Delhiwith the Centre for Economic and Social Studies,Hyderabad, pp. 217-252), provide a profile ofdeprivation with respect to consumer expenditure,cereal consumption and energy intake acrossdemographic and agro-climatic regions as defined bythe National Sample Survey Organisation of India.They examine this evidence at the disaggregated levelto verify whether a PDS targeted with reference toestimates of poverty would end up penalising the nonpoorbut food insecure. They argue that the empiricalprofiles have also useful policy relevance with respectto decentralised formulation and implementation of thePDS.A. Ganesh Kumar, S. Polaski, S. McDonald, ManojPanda and S. Robinson (in ―Policy Dilemmas in India:The Impact of Changes in Agricultural Prices on Ruraland Urban Poverty,‖ IGIDR-WP-2008-012) argue thattrade policy reforms, which lead to changes in worldprices of agricultural commodities or domestic policiesaimed at affecting agricultural prices are often seen ascausing a policy dilemma: a fall in agricultural pricesbenefits poor urban consumers but hurts poor ruralproducers, while a rise yields the converse. Poorcountries have argued that they need to be able to useimport protection and/or price support policies toprotect themselves against volatility in worldagricultural prices in order to dampen these effects.Their paper explores this dilemma in a CGE model ofIndia that uses a new social accounting matrix (SAM)developed at the Indira Gandhi Institute ofDevelopment Research (IGIDR) in Mumbai. The SAMincludes extensive disaggregation of agriculturalactivities, commodity markets, labour markets, andrural and urban households. This SAM includes 115commodities, 48 labour types and 352 types ofhouseholds, (classified by social group, income class,region, and urban/rural). The CGE model based on thisSAM can be used to explore the linkages betweenchanges in world prices of agriculture and the incomesof poor rural and urban households, capturing ruralurbanlinkages in both commodity and factor markets.The results indicate that the inclusion of linkagesbetween rural and urban labour markets is necessary tofully explore, and potentially eliminate, the dilemma. Afall in agricultural prices hurts agricultural producers,lowers wages and/or employment of rural labour, andin some cases spills over into urban labour markets,depressing wages and incomes of poor urbanhouseholds as well. In these cases both rural and urbanpoverty increases. The paper explores the strength ofthese commodity and factor market linkages, and thepotential spill over effects of policies affectingagricultural prices.In a related study (―Trade Liberalization, Poverty andFood Security in India,‖ Report submitted to theInternational Food Policy Research Institute (IFPRI),Washington, D.C., June 2008. IGIDR-WP-2008-013,2008), A. Ganesh Kumar, and Manoj Panda attempt toassess the impact of trade liberalization on growth,poverty, and food security in India with the help of anational level computable general equilibrium (CGE)model. The results show that the GDP growth andincome poverty reduction projected following tradeliberalization do not necessarily improve the foodsecurity and/or nutritional status of the poor. Evidencefrom simulations of (partial) trade reforms reflecting apossible Doha-like scenario show that the bottom 30%of the population in both rural and urban areas wouldsuffer a decline in calorie and protein intake, in contrastto the rest of the population, even as all householdsincrease their intake of fats. The outcome on foodsecurity / status with regard to individual nutrientsdepends crucially on the movements in the relativeprices of different commodities along with the changein income levels. These results show that trade policyanalysis should consider indicators of food security inaddition to the overall growth and poverty measures10 Annual Report 2008-09