War, malnutrition, and India’s fiscal burden
The Russia-Ukraine war has run longer than expected, with little clarity on when it might end. The economic consequences could also be more far-reaching than anticipated, even if all of them are not entirely clear at the moment. A visible shift in geopolitical alignments, and a surge in inflationary expectations are all too evident. But there may be other unintended consequences to the current conflict which could have farreaching impacts on distant countries.
The great power conflict in Vietnam nearly half a century ago provides an instructive example of such long-term effects. The Vietnam War brought a new kind of political consciousness among students in the 1960s and 1970s, and had a lasting impact on pop culture in the West. Its impact on the food and fiscal policy in India is not too widely known, but perhaps much more significant.
The war between North and South Vietnam began in 1955 and sucked in the major powers of the day. The erstwhile Soviet Union and China provided support to the Communist regime in North Vietnam while the United States (US) and its allies backed South Vietnam, providing arms support and training to the South Vietnamese forces.
It was only in 1965 that the newlyelected US president, Lyndon B Johnson, ordered a direct offensive of American forces against the North Vietnamese. The resulting bloodshed sent shockwaves around the world. Anti-war sentiment grew in the US as the body count of American soldiers piled up, forcing an eventual American withdrawal in 1973, and a Communist victory in 1975.
In 1964, Johnson was still one of the most powerful men in world history, having won the presidential election by a historic margin. His promise of a Great Society appealed to many. At home, this meant racial reconciliation and a “war on poverty”. Abroad, it meant a war against hunger and communism. Like other American policymakers, Johnson considered India to be an important bulwark against Communism in Asia. But he felt India was not doing enough to become self-sufficient in food, keeping the country perennially dependent on outside aid (primarily American) to meet its food requirements. He was also peeved by India’s public denouncement of America’s aggression in Vietnam at a time when it was a recipient of American aid.
Johnson tried to use the American food aid programme (PL-480) as a bargaining tool to influence India’s food and foreign policies. In November 1965, Johnson’s agriculture secretary, Orville Freeman was able to get India’s agriculture minister, C Subramaniam to agree on a plan to revamp Indian agriculture. The Treaty of Rome involved a commitment on India’s part to encourage intensive cultivation of highyielding varieties (wheat from Mexico and rice from Philippines) in irrigated parts of the country, if necessary, by providing subsidies for critical inputs such as fertilisers and credit.
Johnson’s incessant arm-twisting provided a strong impetus to Indian policymakers to speed up efforts to raise food production, and break free from America’s influence on foreign policy. But the plan they adopted was very similar to the one outlined by the Americans in Rome. It relied on using high-yielding varieties in irrigated states to boost the production of wheat, and later rice. The Green Revolution brought quick results, boosting wheat production in Punjab, Haryana, and Uttar Pradesh, helping bring down India’s dependence on wheat imports by the early 1970s.
The long-term impact has been decidedly mixed. The Green Revolution has helped raise agricultural productivity over time, especially in irrigated parts of the country. But the economic and ecological costs have been steep. The cheap availability of inputs such as water, power, and fertilisers have led to over use, depleting water tables, harming soil health, and bankrupting State-owned power firms.
Such subsidies on farm inputs have also been regressive, benefiting large land-owners in irrigated regions at the cost of marginal farmers in rain-fed regions. The minimum price support (MSP) mechanism has been equally regressive. These subsidies have often led to burgeoning fiscal deficits, driving up inflation, and ultimately hurting the poor.
Over time, the state backing for wheat and rice hollowed out the market for nutritionally richer cereals such as millets and pulses. Both demand and supply have declined since the 1970s, with farmers and consumers substituting nutritionally dense cereals such as jowar or bajra for rice and wheat. This has been a significant driver of India’s nutritional crisis, as several government reports and independent studies have noted. Yet, very little has been done to correct such a skewed farm support policy.
Those planning the Green Revolution may have been thinking only of India’s medium-term constraints at that point. The inability to assure adequate food grains and the difficulty in maintaining an independent foreign policy stance may have prompted a quick-fix strategy to boost the production of wheat and rice. But once the farm support policies were rolled out, they created natural and powerful constituencies against any change or rollback: large and organised farmers, resource-rich states, and inefficient fertiliser companies.
The finance ministry’s economic survey of 2015-16 termed this the chakravyuha challenge of policymaking in India. “...The subsidy to farmers — which predominantly benefits large farmers — cannot be reduced/eliminated because of an exit problem- the entitlement that farmers, especially rich farmers, have internalised, and the power of their voice in preventing reform,” the survey said.