Agriculture Reference
In-Depth Information
from universal food subsidies to more focused distributions in combination
with geographic targeting and self-targeting commodities (that is, those com-
modities that only the poor consume) in employment programs. India has in
fact launched a major National Rural Employment Program as one of the key
safety nets for the poor. This approach should allow Indian policymakers to
gradually reform the much less efficient PDS. However, by reviewing the ex-
periences of a food-coupon pilot program, the chapter argues that such pro-
grams are proving less expensive and more effective in reaching the intended
beneficiaries. The authors argue that, given the level of technological know-how
in the country, India should be able to adopt even more advanced methods, such
as using smart cards, for providing safety nets to its poor.
The Challenges of Making the Changes Work
At the macro level, the economic arguments for making the policy changes are
very clear. But, in the end, political decisions prevail. Politicians, above all,
want to get re-elected. Adequate and accessible food is basic to political sur-
vival—discontent in urban areas can bring down governments. Farmers often
have strong lobbies. And embedded public institutions, particularly those with
rents to distribute, have strong lobbies. Politicians will tend to play it safe when,
as characteristic of many desirable reforms, many people will each gain a little
but a few powerful people are likely to lose a great deal.
The analogy from the postscript to the Indonesia case study in Chapter 6
is particularly important in this context. It notes that BULOG seems to have
built a political coalition similar to the one supporting food stamps in the U.S.
Congress—support comes from rural legislators eager to have additional mar-
kets for the food that is produced in surplus by their farm constituents and from
urban liberals who live in areas with many poor people who use food stamps as
their major source of income. Similarly BULOG has assembled support for its
rice procurement program (to help rice farmers) that delivers subsidized rice to
the poor. No parliamentarians have been willing to take on both dimensions of
the rice program simultaneously, and so the huge budget subsidies that accrue
to BULOG to run those programs, and the leakages that accompany them, go
unchallenged.
These stories emphasize the point that when change does not take place,
there are reasons. The reforms can be hindered by the fact that important stake-
holders as well as researchers can have different, and often opposing, views
about essential facts, causal mechanisms, and appropriate policy solutions
(Birner et al. 2007). For example, rice in Indonesia seems to have an almost
mystical hold on the public imagination. In such circumstances, the stakehold-
ers may not accept the simple fact that higher prices may not always lead to
higher production (for example, when new area is limited, yields are at peaks,
and new technology is not forthcoming). Similarly, not all parties understand
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