Achieving Food vs. Fuel Security – Economywide Implications of India’s “Right to Food Act 2013”

There have been increasing concerns about the challenges associated with meeting the growing global needs for food, feed, fiber, and fuel in a sustainable manner over coming decades. World population is projected to reach 9 billion by 2050 and income growth in low and middle income countries is spurring demand for a more varied diet, combining to increase pressure on arable land resources around the world. This study offers insights into the potential macroeconomic impacts of India’s recent food and fuel security policies through application of a dynamic global economy-wide model. Although India has experienced impressive economic growth in recent years, the country remains home to more than 300 million people living in poverty. In addition, India has recently adopted very aggressive policies aimed at improving both food and energy security. The Government of India passed the National Food Security Act 2013, which entails providing subsidized food grains to nearly 75% of the rural population and 50% of the urban population. In addition to addressing food security, India is also strengthening its energy security with its National Policy on Biofuels, which targets 20% blending of biofuels by 2017. Assessment of the economy-wide impacts of implementing these policies can provide valuable insights into the economic impacts that may result and could inform decisions being made in other countries considering similar policies. This study reveals that India’s food security policy projected to reduce its projected economic growth, while the fuel security policy help boost the economy, but do not significantly impact crop prices, cropping patterns, land use, or land cover change.