Opinion | The spectre of a new kind of famine haunts India now4 min read . Updated: 29 Apr 2020, 11:10 PM IST
The State cherry picking what’s essential echoes the sort of central planning that’s seen to risk starvation
In his study on famines, Nobel laureate Amartya Sen described two distinct kinds of famine. The first, what he called FAD (food availability decline), was till then the usual conception of a famine: starvation caused by disruptions arising from war, repeated rainfall failure, or pestilence, such as disease, locust infestations, etc. Humans need a certain minimum caloric intake to survive. If food supply dipped below this point, starvation would ensue.
Sen also drew attention to a second type of famine, which he called FEE (failure of exchange entitlements), that challenged the common notion of famines as caused by insufficient food supply. An FEE famine implied starvation even in the midst of plenty. Access to food is class selective. Even in the worst of famines, the better off usually had access to food. It was the poor and disadvantaged who starved because there was what Sen called a failure of exchange entitlements. Unless you produced food directly, access was determined by your ability to exchange earnings or assets for food. During severe disruptions, demand for labour collapsed, prices rose, and foodgrain stocks dwindled. The labouring poor were unable to exchange their labour for food and hence starved and/or migrated.
Most famines in history were a combination of FAD and FEE, with one of the two predominant in each case. Sen’s study was based primarily on relatively poor agrarian societies with primitive division of labour. Poor communications and transport constrained long-distance bulk movements of goods; most of the harvest was produced and consumed locally with minimal processing. The world changed greatly after the passing of agrarian empires in the wake of the Industrial Revolution and the associated political revolutions that spawned the welfare state. Modern technology, all-weather roads, railways and motorized transport enabled the bulk movement of goods from surplus to deficit areas. This made the great famines of the past a distant memory—despite rapid urbanization, with over 500 cities housing over a million people each and over 30 megacities of over 10 million living far away from food sources. The rise of the democratic welfare state also ensured that exchange-entitlement losses were made good through interventions like employment insurance, food stamps, etc. Nowadays, one associates famines only with failing agrarian states or authoritarian setups impervious to pressures from civil society.
Today, the public policy response to the covid-19 pandemic raises the spectre of a third type of famine, namely a failure of supply chains (FSC) famine, peculiar to post-industrial societies based on intricate divisions of labour and complex, dispersed supply chains. Dense urban conglomerations consume a large variety and quantity of processed packaged food that is grown, aggregated and processed at multiple locations far from their place of final re-aggregation and consumption. Just think of the amount of food that needs to get into a big city each day, and what were to happen if these supply chains were disrupted.
Administrative lockdowns of cities, regions and indeed whole countries are a big leap into the dark. As a result of India’s lockdown, several grocery items went out of stock in retail outlets, although unprocessed food like cereals, dairy supplies, fruit and veggies are still available. Anything in need of processing is fast vanishing, as supply chains for processed foods are frictional.
On the other hand, demand for and the prices of unprocessed foodstuff, like veggies, fruits, food grain and dairy products, are going down in their places of origin because of broken supply chains on one hand, and the loss of exchange entitlements on the other. The fiscal and administrative capacities of poor countries like India to cushion the failure of these exchange entitlements on a large enough scale, even in normal times, are limited.
Modern societies are too complex to shut down. It is impossible to gauge all the linkages and knock-on effects of such a shutdown. In a world characterized by intricate divisions of labour and complex supply networks, it is dangerous for the State to cherry-pick economic/industrial/services through administrative orders based on end-use. This is a function of the market. If the State fails to mimic its complexity, which is likely, supply arrangements will collapse.
Consider what making an essential good like a packet of biscuits entails: sowing, harvesting and transportation of grain and cane; processing into flour and sugar; movement of flour and sugar to biscuit factories. Likewise for preservatives, salt, colouring agents, and essence; and also the paper, ink, adhesives, etc., needed for packaging biscuits. A disruption at any stage of their production, maintenance, processing or movement can bring the entire process to a standstill. Will all these associated activities be placed within the ambit of essential services?
In today’s world, more than ever before, a battle can be lost for want of a nail—or biscuits for the want of adhesives and ink.
It would be far more prudent if general guidelines were issued on how social distancing and hygiene could be enforced in different economic activities, and how the safe movement of passengers and goods can be done in various economic activities, rather than exempting and allowing particular activities. We have been there before. The State fared disastrously in its effort to direct economic activity as it saw fit.
Alok Sheel is RBI chair professor at ICRIER