True Cost of Food Subsidies in India
The Indian government spends tens of billions of dollars each year to provide subsidized food to more than 800 million people through the Public Distribution System, or PDS. This monumental program ensures the food security of some of India’s most impoverished citizens, but high transaction costs and a reliance on resource-intensive crops impose a price that does not appear on government ledgers. TCI aims to estimate the true cost of the PDS by accounting for hidden costs like the health and environmental impacts of the program.
Measuring hidden costs
TCI is using a ‘true cost accounting’ approach to measure the costs and societal impacts that are not counted in the PDS budget, providing policymakers with a clearer picture of the program, its costs, and benefits.
True cost accounting provides a holistic assessment of the food system, essentially measuring, valuing, and describing the processes from farm to plate by accounting for all direct and indirect costs and values.
TCI researchers will measure the impacts of the PDS on five areas of Indian society:
Modeling alternative PDS baskets
As part of this project, TCI is also modeling the costs of two alternative PDS baskets to provide policymakers with additional information for making the PDS more efficient and nutritious.
The first alternative basket features locally sourced grains, with an emphasis on millets. This basket is designed to reduce procurement and storage costs by encouraging local cultivation, decentralized procurement, and the development of storage infrastructure. The second basket will be augmented with more nutritious items, such as pulses, in order to encourage protein-rich diets and promote the cultivation of crops that are less harmful to the environment.
TCI is undertaking the project with financial support from The Rockefeller Foundation. The findings and conclusions shared as part of this project are those of the authors and do not necessarily reflect the positions or policies of The Rockefeller Foundation.
Featured image: Pulses and lentils are displayed for sale at a market in New Delhi, India. (Photo by Jeremy Richards/Shutterstock)