Food security policies in India and China: implications for national and global food security

Abstract

Food insecurity is a much more serious concern in India than China. In addition to income and poverty differences, we argue in this paper that differences in food policies can further explain the different food security outcomes across the two countries. First, India mostly uses price-based input subsidies to support agricultural incentives whereas China has recently adopted direct transfers to support agricultural incentives, which are believed to be less distorting and more efficient. Second, the two countries apply quite different approaches to address poor consumers’ access to food, with India adopting a widely criticized public distribution system and China mainly using direct income transfers and other social safety nets. Third, although both committed considerable fiscal resources to insulating their respective domestic markets, especially during recent food price spikes, India’s heavy dependence on price-based measures causes relatively larger and more volatile fiscal burdens, thereby likely making it more vulnerable in dealing with similar events in the future. These findings have important implications for food policy and food security in the two countries in the future.