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Posts Tagged ‘cooking

India’s 681 million hungry rural citizens

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RG_NSSO_68_MPCE_pic1What do and what can rural residents spend on food and the essentials of living in India? This chart gives us an indication. It is based on new data contained in the latest revelation (my word, not theirs) from the National Sample Survey Office and is titled ‘Key Indicators of Household Consumer Expenditure in India’ (the 68th Round of sampling, for those who follow the extraordinary programme of this sterling statistical organisation).

There is data enough in the volume to inform us, clearly and starkly, that the cumulative impact of several years of food price inflation is hurting households more with every passing quarter. Consider what this new data release tells us:

RG_NSSO_68_MPCE_pic3* That the average rural monthly expenditure per person was lowest in the states of Odisha and Jharkhand (around Rs 1,000) and also in Chhattisgarh (Rs 1,027).
* In Bihar, Madhya Pradesh and Uttar Pradesh, the rural monthly expenditure per person was about Rs 1,125 to Rs 1,160.
* In urban India (not shown in this chart, but I will add to this posting with an expanded update) Bihar had the lowest monthly expenditure per person (called monthly per capita expenditure by the NSSO and abbreviated to MPCE) of Rs 1,507.
* In Chhattisgarh, Odisha, Jharkhand, Uttar Pradesh and Madhya Pradesh, urban MPCE was between Rs 1,865 and Rs 2,060. These six were the six major states with the lowest MPCEs for both rural and urban citizens.

But those are averages, and in this data release, the NSSO has divided its usual ten deciles even further for the lowest and highest deciles. (The decile is the surveyed population divided into tenths, with these being classified by expenditure level.) Doing so gives us a better view of the elastic expense trends in the top ten per cent of the population, the class which is so pampered by the central government. For rural India then, the 5th percentile of the MPCE distribution was estimated as Rs 616 and the 10th percentile as Rs 710 – and these are all-India averages.

[The spreadsheet with the table and chart is here. You can find the highlights of the NSSO study here.]

RG_NSSO_68_MPCE_pic4About half the total rural population is thus estimated to have a MPCE below Rs 1,198. Only about 10% of the rural population reported household MPCE above Rs 2,296 and only 5% reported MPCE above Rs 2,886 (this is using what is called the ‘modified mixed reference period’ or MMRP, in which the person interviewed is asked to recall purchases made over two different lengths of time, for different sorts of goods). The bottom-line is that food accounted for about 53% of the value of the average rural Indian’s household consumption during 2011-12.

This included 11% for cereals and cereal substitutes, 8% for milk and milk products, another 8% on beverages and processed food, and 6.5% on vegetables. Among non-food item categories, fuel for cooking and lighting accounted for about 8%, clothing and footwear for 7%, medical expenses for about 6.5%, education for 3.5%, conveyance for 4%, other consumer services for 4%, and consumer durables for 4.5%.

This ought to be a ringing alarm about access to food for the country’s planners, who are otherwise obsessed with GDP growth and whether India is cosmetically dolled up enough to attract global finance capital. It hasn’t sounded even a muted gong, and even if it had, one stunning inference from this table has been ignored – that this is an indicator of food and multi-dimensional poverty and that millions of rural residents are unable to afford food and basic services.

How so? Look at the chart again. Imagine, at just above the line marking 2,000 rupees, a dotted red line at a level of around 2,070 rupees. That is the equivalent (before the recent fall in the rupee’s value against the US dollar) of USD 1.25 a day, which has (ill-advisedly) been cemented in development wisdom as a poverty line that can be applied in countries like India. Let’s accept that in order to focus on what the new NSSO data tells us.

RG_NSSO_68_MPCE_pic5At the Rs 2,070 level we see that for a relatively prosperous state like Haryana (a former Green Revolution state) about 50% of the rural population cannot spend, per person per month, this amount. The percentage of the rural population below and above this line is similar, more or less, for Punjab (also a former Green Revolution state) and for Kerala (which is not, but has income from economic migrants abroad).

But the entire rural populations of Bihar, Chhattisgarh, Jharkhand and Odisha cannot spend this amount, because they do not earn it. How many is that? Using the 2001-2011 population growth rates (for rural populations of states) this means 98.96 million in rural Bihar, 20.65 million in rural Chhattisgarh, 26.52 million in rural Jharkhand and 36.19 million in rural Odisha are below this line. What of other states with large rural populations?

In Assam, Madhya Pradesh, Uttar Pradesh and West Bengal, 90% of the rural population is below this line and that means 25.23 million in Assam, 49.90 million in Madhya Pradesh, 147.25 million in Uttar Pradesh, and 57.26 million in West Bengal. In Gujarat, Karnataka, Maharashtra and Rajasthan, 80% of the rural population is below this line and that means 28.52 million in Gujarat, 30.66 million in Karnataka, 50.77 million in Maharashtra and 43.55 million in Rajasthan. In Andhra Pradesh and Tamil Nadu, 70% of the rural population is below this line and that means 39.64 million in Andhra Pradesh and 26.56 million in Tamil Nadu.

Taken together those rural populations are 681.72 million (more than twice the population of the USA). They are 78% of India’s 2013 rural population, almost eight out of ten rural citizens.

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The IPCC speaks, on renewable energy and climate change

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Demand for energy services is increasing. GHG emissions resulting from the provision of energy services contribute significantly to the increase in atmospheric GHG concentrations. Graphic: IPCC-SRREN

The Special Report on Renewable Energy Sources and Climate Change Mitigation (SRREN), agreed and released by the Intergovernmental Panel on Climate Change (IPCC) on 09 May 2011, has assessed existing literature on the future potential of renewable energy for the mitigation of climate change. It covers the six most important renewable energy technologies, as well as their integration into present and future energy systems. It also takes into consideration the environmental and social consequences associated with these technologies, the cost and strategies to overcome technical as well as non-technical obstacles to their application and diffusion.

The chapters are dense, but there is a Summary for Policy Makers which provides an overview of the SRREN. It summarises the essential findings concerning the report`s analysis of literature on and experiences with the scientific, technological, environmental, economic and social aspects of the contribution of six renewable energy sources to the mitigation of climate change.

The IPCC has said that on a global basis, it is estimated that renewable energy accounted for 12.9% of the total 492 Exajoules (EJ) of primary energy supply in 2008. The largest RE contributor was biomass (10.2%), with the majority (roughly 60%) being traditional biomass used in cooking and heating applications in developing countries but with rapidly increasing use of modern biomass as well.

Hydropower represented 2.3%, whereas other RE sources accounted for 0.4%. In 2008, RE contributed approximately 19% of global electricity supply (16% hydropower, 3% other RE) and biofuels contributed 2% of global road transport fuel supply. Traditional biomass (17%), modern biomass (8%), solar thermal and geothermal energy (2%) together fuelled 27% of the total global demand for heat. The contribution of RE to primary energy supply varies substantially by country and region.

Deployment of RE has been increasing rapidly in recent years. Various types of government policies, the declining cost of many RE technologies, changes in the prices of fossil fuels, an increase of energy demand and other factors have encouraged the continuing increase in the use of RE.

The current global energy system is dominated by fossil fuels. Shares of energy sources in total global primary energy supply in 2008. Graphic: IPCC-SRREN

Despite global financial challenges, RE capacity continued to grow rapidly in 2009 compared to the cumulative installed capacity from the previous year, including wind power (32% increase, 38 Gigawatts (GW) added), hydropower (3%, 31 GW added), grid-connected photovoltaics (53%, 7.5 GW added), geothermal power (4%, 0.4 GW added), and solar hot water/heating (21%, 31 GWth added). Biofuels accounted for 2% of global road transport fuel demand in 2008 and nearly 3% in 2009. The annual production of ethanol increased to 1.6 EJ (76 billion litres) by the end of 2009 and biodiesel to 0.6 EJ (17 billion litres).

Of the approximate 300 GW of new electricity generating capacity added globally over the two-year period from 2008 to 2009, 140 GW came from RE additions. Collectively, developing countries host 53% of global RE electricity generation capacity. At the end of 2009, the use of RE in hot water/heating markets included modern biomass (270 GWth), solar (180 GWth), and geothermal (60 GWth). The use of decentralized RE (excluding traditional biomass) in meeting rural energy needs at the household or village level has also increased, including hydropower stations, various modern biomass options, PV, wind or hybrid systems that combine multiple technologies.

Climate change will have impacts on the size and geographic distribution of the technical potential for RE sources, but research into the magnitude of these possible effects is nascent. Because RE sources are, in many cases, dependent on the climate, global climate change will affect the RE resource base, though the precise nature and magnitude of these impacts is uncertain. The future technical potential for bioenergy could be influenced by climate change through impacts on biomass production such as altered soil conditions, precipitation, crop productivity and other factors. The overall impact of a global mean temperature change of less than 2°C on the technical potential of bioenergy is expected to be relatively small on a global basis. However, considerable regional differences could be expected and uncertainties are larger and more difficult to assess compared to other RE options due to the large number of feedback mechanisms involved.

For solar energy, though climate change is expected to influence the distribution and variability of cloud cover, the impact of these changes on overall technical potential is expected to be small. For hydropower the overall impacts on the global technical potential is expected to be slightly positive. However, results also indicate the possibility of substantial variations across regions and even within countries. Research to date suggests that climate change is not expected to greatly impact the global technical potential for wind energy development but changes in the regional distribution of the wind energy resource may be expected. Climate change is not anticipated to have significant impacts on the size or geographic distribution of geothermal or ocean energy resources.

The levelized cost of energy for many RE technologies is currently higher than existing energy prices, though in various settings RE is already economically competitive. Ranges of recent levelized costs of energy for selected commercially available RE technologies are wide, depending on a number of factors including, but not limited to, technology characteristics, regional variations in cost and performance, and differing discount rates. Some RE technologies are broadly competitive with existing market energy prices.

Renewable energy costs are still higher than existing energy prices, but in various settings renewable energy is already competitive. Graphic: IPCC-SRREN

Many of the other RE technologies can provide competitive energy services in certain circumstances, for example, in regions with favourable resource conditions or that lack the infrastructure for other low-cost energy supplies. In most regions of the world, policy measures are still required to ensure rapid deployment of many RE sources. Monetising the external costs of energy supply would improve the relative competitiveness of RE. The same applies if market prices increase due to other reasons. The levelized cost of energy for a technology is not the sole determinant of its value or economic competitiveness. The attractiveness of a specific energy supply option depends also on broader economic as well as environmental and social aspects, and the contribution that the technology provides to meeting specific energy services (e.g., peak electricity demands) or imposes in the form of ancillary costs on the energy system (e.g., the costs of integration).

India’s food price inflation in high gear

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There has been no shortage since November of news reports and analyses about the food inflation. The 19% annual rise in fact masks widespread individual urban centres’ price shocks and individual food item trends. I have tried to unpack the year-on-year ‘national’ food inflation number using data from the Ministry Of Consumer Affairs, Food and Public Distribution – Department Of Consumer Affairs (Price Monitoring Cell). My guess is that this data is an under-estimate but is useful for spotting trends.

I collected prices for the 36 cities tracked by the PM Cell, monthly from 2007 December. Based on a small basket of staples (rice, wheat, atta, tur dal, sugar, gud, tea, milk, potato, onion, salt) a crude index shows that in 33 out of 36 cities, the 24 month (07 Dec to 09 Dec) rise in prices of items in this basket is more than 24%, and that in 23 cities it is more than 50%.

Food inflation 2009 over 2007 in Indian cities

Food inflation 2009 over 2007 in Indian cities

About price increases in rural settlements I can find no organised information at all, although direct experience in western Maharashtra, Karnataka and Goa tells me that a staples basket can cost up to 2-3% more than in urban areas. (Agmarknet collects and maintains detailed mandi prices for farm produce but there is no comparable effort for rural retail food staples.)

The National Sample Survey 61st Round (2004 July-2005 June) on ‘Household Consumer Expenditure in India’ put down the finding that out of every rupee that the average rural Indian spent on household consumption, 55 paise was spent on food and mainly:
18 paise was spent on cereals
8 paise on milk & milk products
6 paise on vegetables
5 paise on sugar, salt & spices
5 paise on beverages, refreshments, processed food, purchased cooked meals, etc

Of the non-food expenditure 10 paise was spent on fuel for cooking and lighting.

I have tried to maintain this weightage in my calculation, but it is really no more than a crude reckoning because I haven’t been able to spend the time to clean up the publicly available data – querying the website database of Dacnet (Dept of Agriculture and Cooperation) or FCAMin returns report formats that are terribly messy, even though they contain useful data. (Although I think there may be differences even between these for the same foods and same date ranges.)

Based on what I have seen and heard on the field in Karnataka, Goa and western Maharashtra (and learnt about Gujarat and eastern UP from others) the available food basket seems to be shrinking (the so-called ‘coarse’ cereal group is conspicuously less), and where families have young and teenaged children there is pressure to buy processed and packaged snack foods (which is really a blight in our small rural markets). There are all sorts of oddities about the form that food takes in these markets – the price of a 50 gram pack of biscuits for example (Parle Glucose is the standard) has hardly moved in the last 3-4 years yet at the same point-of-purchase end, look at the way the prices of ground wheat have moved.

Then there’s fuel and transport to account for, more about which you’ll find here. This question needs much more work in 2010 to strengthen some of the reliable data we have with updates, and to try to build in what we see and hear and sense from conversations with those who live and work in all those tahsils and talukas and blocks and mandals. I feel very strongly that we are lacking in our data the presence and impact of the many linkages that connect and influence the rural farming/labour household. Many of the measures we have have served us well but I think need to be supplemented – how to integrate the lessons and findings from the comprehensive National Family Health Survey, the Sarva Shiksha Abhiyan, the many studies into the income-providing measures of NREGA.

Even though we worry about what the rural/urban poor household must spend on, the attraction to buy mobile phones amazes me. I have met young men who earn around Rs 4,000 a month but who have bought Samsung mobile phones costing Rs 5,000! Imagine spending more than a month’s income on a phone, I asked them, but they saw nothing worrying about their expenditure. Retailers who sell mobile phones used to keep the low cost and hardy Nokia phones which 3 years ago cost around Rs 1,700-1,800 (mine is still working), but not any longer, or they work at discouraging those who ask for the relatively cheaper phones. Much more than the hundred-dollar laptop we need the thousand-rupee mobile phone.

The image is of a chart I made for the project group I work with (part of the National Agricultural Innovation Project, it’s called Agropedia and you can read more about it here). This chart helps point to some patterns (you can download the hi-res image here). I’m curious for example about Gujarat, whose grain and commodity traders have a long and murky history of hoarding. The North-Eastern cities could be insulated to some extent from the regional transport subsidy (road and rail). Cities in the Deccan are relatively better off than North Indian cities. The big difference between Chandigarh and Mandi is puzzling.

In his hugely interesting paper, ‘India And The Great Divergence: Assessing The Efficiency Of Grain Markets In 18th and 19th Century India‘, Roman Studer (University of Oxford, Discussion Papers in Economic and Social History, Number 68, November 2007) has written: “Prior to the mid-nineteenth century, the grain trade in India was essentially local, while more distant markets remained fragmented. This is not to say that no grain was traded over longer distances, but the extent was very limited, as the prices from some 36 cities all over India still exhibited various characteristics of isolated markets.”

“First, annual price fluctuations were extremely high. Second, differences in price levels between markets were very pronounced and persisted until well into the nineteenth century. Third, apart from neighbouring villages or cities, price series from different markets did not show comovements at all.” Studer looked at century-old data, but we still have 36 cities to tell us about staple food retail prices! Also, the three characteristics he mentions can be seen today too.

Happy New Year!