consultireti@gmail.com   +420794026409 +2348035820593

Daily Archives: December 5, 2018

Food Insecurity in a World of Food Surplus – Food Security and Food Justice

Food Insecurity in a World of Food Surplus – Food Security and Food Justice

Globally, enough food is produced to feed the entirety of our ever-growing population, however, 20% of people living in developing countries still experience hunger and food insecurity, meaning they do not have sufficient access to safe, nourishing food that they wish to eat in order to sustain an active and healthy life. Issues relating to food insecurity  in the developing world are caused by various factors, yet, scarily, our habits as consumers could even be argued to add to this problem.

A need for the ‘exotic’

In the past two decades there has been a huge increase in the amount of food stocked in  British supermarkets which have been grown overseas, often in developing ex-British colonies, and shipped internationally to reach our shopping trollies. Supermarkets supply these products due to elevated demand as a result of an increased awareness of our health within developed countries, such as England. Therefore, as consumers, we expect to see our favourite ‘exotic’ produce in the supermarkets all year round rather than just purchasing seasonal local food.

Zimbabwe and Tesco: Does every little really help?

Having grown up next to a farm in Zimbabwe which supplied mangetout for Tesco, I felt it would be interesting to see how Tesco’s interactions within this process in Zimbabwe impacts those who work on the farms which supply Tesco more generally, as well as the specific effects it has upon their food security.

From the start of its trade with the UK, Zimbabwe, a former British colony, provided crops such as baby corn and mangetout peas, which can’t be grown in our cold British climates, in order for UK supermarkets such as Tesco to be able to supply the British consumer with ‘exotic’ produce during the winter months.

The pre-packed vegetables seen in Tesco supermarkets come with an ‘ethical’ seal of approval, having been produced under certain environmental and social welfare standards. The concept behind this ethical seal of approval is done in an attempt to ‘improve the lives of poor working people around the world’. For us, as consumers, this ‘ethical’ stamp is seen positively; we like to know that what we are buying has been sourced from people who have been respected in the process. However this also meant that the production of Tesco’s mangetout had to be better governed than previously. Therefore, in order for Tesco to ensure that environmental and social welfare standards were met, it became increasingly, perhaps overly, involved in monitoring the control of the suppliers and their produce, which, in turn had several negative outcomes for the Zimbabwean workers.

This could be blamed by a spread of neoliberalism whereby government control has been slowly removed, therefore opening up markets to private companies, enabling Tesco to have greater control in the process of mangetout production within Zimbabwe.

Tesco’s harsh control within Zimbabwe

As a result of Tesco’s increased control, people working on farms supplying mangetout for Tesco experienced precarious livelihoods, strict surveillance and increasing pressure within the job, with the practice even being compared to the colonial period that Zimbabwe experienced. The monitoring therefore provided an unsettling environment contradictory to that promised by Tesco who began the control to ensure the social welfare standards were upheld in the first place.

An example of this control was widely broadcasted showing Tesco to make the majority of the decisions on farms and in packing facilities within Zimbabwe, which it did not own, and therefore was not supposed to do. This control left the workers and suppliers with minimal say within the system, with Tesco also being accused of exploiting its farmworkers in Zimbabwe as a result.

Food Insecurity

Tesco also extended its control in Zimbabwe through to the way the vegetables look. In turn, this meant that around half the mangetout grown for Tesco in Zimbabwe was unfit for the British consumers. However, rather than being offered to the local population, this mangetout was either provided to farmers for animal feed or simply thrown away. One Evening Standard article even noted that Dharshini David, spokesman for Tesco at the time, assumed that the Zimbabweans would not want the food that Tesco grew in Zimbabwe as it was not traditionally eaten. Therefore, even in periods of record harvests, starvation and food insecurity persisted within Zimbabwe as a result of Tesco’s mass produced food not being consumed within Zimbabwe, as it was grown for the British consumer only. Even though mangetout isn’t a vegetable which is traditionally eaten in Zimbabwe, it does not mean it is not eaten at all. Tesco were therefore denying the local population a chance to access vital food surplus which may have reduced the threat of food insecurity experienced by 16% of the population.

Workers on Tesco’s mangetout farms also only received a small percentage of the final price paid for the mangetout in the supermarkets, mangetout pickers were therefore poorly paid. They were only paid around 1% of the 99p that Tesco sells its 150g packet of mangetout for. Tesco, in comparison, profited almost 50% of this same 99p that the mangetout is sold for. This gives workers poor purchasing power and thus makes it hard for them to buy the food they wish for an ‘active and healthy lifestyle’, therefore adding to the food insecurity they experience.

Therefore, even though Tesco produced a food surplus in a country which desperately needed it, as access to this surplus was denied a chance wasn’t given through this relationship to try and reduce the food insecurity that Zimbabwe experiences. As well, in spite of Tesco creating jobs for the local population, the low pay and lack of profit that growers received provided no leverage for them to escape this food insecurity. Therefore, the choices which we make as consumers, and the decisions this forces supermarkets to make regarding supply and demand, has real, negative impacts upon the food security of those in the developing world.

Share this:

5 ways to improve global food security | TreeHugger

5 ways to improve global food security | TreeHugger

Nearly 1 billion people around the world suffer from hunger. Considering that we already produce enough food to feed the whole planet, this should no longer be a problem. But there are a number of factors that get in the way, including inefficient use of water, fertilizers and crop rotations.

That’s why Paul C. West and a team of researchers developed a set of ways to improve global food security.

“Our aim in writing this paper was to do an analysis that highlights that the opportunities and challenges to create a sustainable food system are concentrated in a small set of crops and places,” West, co-director of the Global Landscapes Initiative at the University of Minnesota, told TreeHugger. “Targeting actions in these places can have not only local, but also regional, and in some cases global impact.”

According to their

But West had a response to this: “It would be very naive to assume that diets could radically shift soon. In fact, the trend toward more meat consumption is happening in many parts of the world. Our main point here is that the amount of calories that we already grow but feed to animals is a *huge* number of calories. Even small changes in diet can have a profound impact.“

“The research focuses on food availability, but I would say that most of the problem of hunger is around food access —do people have enough income to purchase food?” Haddad, of IFPRI, said in an email. Haddad writes that a discussion of global food security should also address the different needs of higher and lower income groups, maximize resilience of the food chain in the face of climate change and social conflicts, and minimize greenhouse gas emissions.

To be fair, West did acknowledge that his article fell short of addressing food access and nutrition, but he added, “It does address many of the key aspects of creating a sustainable food system using low-tech tools, including using fertilizer to boost production in food insecure areas to benefit the people in those areas as well as be less dependent on the major breadbaskets, minimizing waste, as well as reducing the environmental impacts through changes in management practices that increase efficiency. Access, nutrition, and cultural preferences all need to be addressed in concert with the aspects we addressed.”

The complexity of issues like food security is the reason hunger is such a prevalent issue in the 21st century. Tackling hunger will take a multi-dimensional and multi-disciplinary approach.

Source

https://www.treehugger.com/sustainable-agriculture/5-ways-improve-global-food-security.html

Climate change a serious threat to food security – Technology Times

Climate change a serious threat to food security – Technology Times

In 21st century the major concern of scientists is to enhance the food production but the climate change is major threat for food security. Much of the data is available showing the adverse effects of climate change on crop yield. Internationally copious attention is given to adaptation strategies to climate change.

Resultant there is considerable increase in climate change related projections. The developing countries are highly vulnerable due to climate change and they have to pay the greater costs. Industrialized countries should realize their responsibility to tackle the problem of increased concentrations of greenhouse gasses.

In the coming decades, farming will be even more risky due to increase in temperature and rising of sea level which will ultimately lead towards change in weather patterns. Also the intensity and frequency of extreme weather events will be increased.

Additionally there are various uncertainties as it is not possible to know the exact shape of weather events in next eras of climate change. Predictability of the system is greatly affected due to uncertainties. So understanding the relevant limits of predictability should be critically researched. Also it limits the assessment process to predict the future food production.

Climate change is exerting significant deleterious effects on livestock, crop, fisheries and all other living and non-living things on this planet. Among these various impacts are already measured. To get the improved crop yields all the dimensions of food security must be considered.

The impacts of climate change will be exerted on all the dimensions of food security such as availability, access to the available resources, stability and utilization. As a result whole food system will be affected. Food utilization is also affected by climate change by two different dimensions that are food safety and health.

Due to climate change the microbial growth rates will be much higher in upcoming years that will reduce the food safety.The indirect effects of climate change are also adverse, such as migration, loss of jobs and fewer working options Natural disasters, heat stress, vector borne diseases will become much common due to climate change. Due to this scenario water related issues will also become severe such as less availability and increased contamination.

Crop Climate Modeling

It is one of the key factors to develop the outlooks for future agriculture. It will be helpful for the policy processes and field level decisions. Despite of these limitations in crop climate modeling, the projections based on this model strongly indicate that globally food production will be decreased up-to much lesser extent due to climate change. There will be changes in the prevalence of pest and diseases, feed quality and quantity will be reduced for livestock and overall production will be impaired due to physiological and abiotic stresses.

By 2050, 5-10% decrease in fish catch in marine ecosystem will be observed due to spatial variation. Due to changes in ocean temperatures, pH, nutrients supply, ice thickness and wind patterns there will be significant changes in the distribution patterns of plankton and fish.

Directly or indirectly food security is related to ecosystems. Due to climate change pressure is exerted on ecosystems. Biodiversity is decreased due to extreme events and increase in temperature which is directly related to resilience of food systems.

Economic and agricultural components of agricultural systems are also being affected due to climate change. Mainly poor persons and marginalized communities are under greater risk of suffering due to climate change. So significant efforts should be made to eliminate poverty by dealing with the changing climate.

Climate change and the developing countries

Many developing countries have already experienced the worst weather events in the form of heat waves, droughts, floods and tropical cyclones. Every year the frequency and intensity of these events in getting more than the previous years. Mainly the enhanced rate of glacial melting is disturbing the river flows thus affecting the productivity and phenology of biological systems.

When it comes for the agricultural systems technological developments are of equal importance that influence the agricultural management and land use. But in the developing countries the effects of climate change will be more evident due to traditional practices of land management.

So in the developing countries the observational series should be expanded. Special attention should be given to the tropical and subtropical climates. Such kind of strategies may help to increase the knowledge and adaptive response in rural populations and in agricultural systems in the developing countries.

Reginal climate projections

For many regions in the world, regional climate projections are available. But the available projections are downscaled for the developing countries as compare to the developed ones. According to these projections some areas are warmer than others due to small thermal inertia and less evaporative cooling.

In Africa the warming is more projected than the annual mean warming globally. In south East Asia the warming is projected like similar to the global warming. In Latin America warming is also projected like similar to the global warming.

Due to the serious threats to the food security, action oriented attention should be shifted to research agenda with main focus on changing the recent culture of research. Unfortunately in the applied disciplines there is much gap between research activities and implementation.  This research implementation gap is going to be more apparent.

Stakeholder’s portfolios type options should be given to the farmers, countries and communities. Adaptation actions which are relevant to the climate change and food security should be ensured. Most importantly the adaptation and mitigation processes and techniques should be combined. Urgently the threats caused by the changing climates to food security should be addressed. Due attention should be given to both incremental and transformative changes.

Policies for the climate change adaptations should be carefully devised. They should be the integral part of developmental policies. Extent of adaptation should also be measured. Representatives from private sectors, researchers and government officials should analyze the challenges and opportunities to combat the hazardous effects of climate change. Limited funding, multiple options, objectives and decision supportive framework should be taken into account.

Authors: Tabinda Athar & Madiha Nisar 

 

Tourism, food security among high-potential areas for expanding UAE-Caribbean cooperation – Caribbean News Now

Tourism, food security among high-potential areas for expanding UAE-Caribbean cooperation – Caribbean News Now

Hamad Buamim, President and CEO, Dubai Chamber of Commerce and Industry (PRNewsfoto/Dubai Chamber of C&I)

DUBAI, UAE — Tourism, food security, manufacturing, logistics, and renewable energy have been identified as high-potential areas where companies in the UAE and Caribbean region can expand economic cooperation, according to new analysis from Dubai Chamber of Commerce and Industry.

The findings, released on the sidelines of the first UAE-Caribbean Cooperation Forum in Dubai, revealed that the value of non-oil trade between Dubai and Caribbean countries totaled $273 million in 2017.

Bilateral non-oil trade was dominated by imports from the Caribbean which were valued at $183 million in 2017, while $90 million worth of exports contributed 33 percent to Dubai’s trade with the region.

Suriname ranked as Dubai’s top Caribbean trading partner in 2017, with bilateral non-oil trade valued at $113.8 million, accounting for 42 percent of the emirate’s trade with the region. Guyana ranked second with $52.1 million in bilateral trade, followed by Dominican Republic and Trinidad and Tobago.

In addition, the findings revealed that the number of Caribbean companies registered with Dubai Chamber increased by 54 percent from 403 in 2013 to reach 621 in 2018.

Hamad Buamim, president and CEO of Dubai Chamber of Commerce and Industry, noted that the findings reflect the tremendous potential to boost bilateral trade and investment in the future as the UAE and Caribbean countries push ahead with plans to diversify their economies and explore business opportunities abroad.

“Dubai can serve as a global gateway for Caribbean exporters who are keen to broaden their horizons and access markets across the Middle East, Africa, and Asia, while the Caribbean region is fast emerging as an attractive investment destination, providing plenty of advantages which UAE companies can benefit from,” Buamim added.

Held on November 24-26, the UAE-Caribbean Cooperation Forum was co-organised by the UAE ministry of foreign affairs and international cooperation and Dubai Chamber of Commerce and Industry, in partnership with the UAE ministry of economy and the UAE ministry of culture and knowledge development.

Source

https://www.caribbeannewsnow.com/2018/12/02/tourism-food-security-among-high-potential-areas-for-expanding-uae-caribbean-cooperation/

SDG 2 – End hunger, achieve food security & improve nutrition – Ireti Adesida

During the September 2015 Sustainable Development Summit, hunger and food insecurity was one of the key topics of discussion, producing the SDG 2 – End Hunger and Achieve Food Security. Some targets were laid for this Sustainable Development Goal in a bid to achieve by 2030, to support some of the 1996 World Food Summit goals that never came to mature.

1. End the global hunger crisis and ensure all people, especially the poor, have access to sufficient and nutritious food.

The United Nations does not view hunger as just the scarcity of food but also as the inability of individuals to obtain what the FAO refers to as nutritious food. Most families in the Sub-Saharan region cannot afford a balanced diet more than twice in a week, something the UN believes is the main culprit behind malnutrition in the region. The plans are thus that as much as access to food is the main goal, access to right foods be given equal attention.

2. End the malnutrition monster and address the nutritional needs of infants, adolescents, the elderly, and pregnant and lactating women.

3. Increase small-scale farmers’ agricultural productivity and incomes through equal and secure access to land and other factors of production, financial services, knowledge, opportunities and markets for non-farm employment and value addition.

The main target persons here are fishers, pastoralists, family farmers, indigenous people and women, who are usually either neglected and their skills under-utilised, lack the right resources to invest in agriculture, or have little knowledge of what agriculture and modern methods of production really entail. If this plan is successfully executed, the UN projects a 230million reduction in the number of hungry people all across the globe.

4. Formulate measures to ensure the food commodity market and its derivatives functions properly, and that market information reaches farmers in time to avoid surprises on such market aspects as price volatility and demand variations.

These measures will be to ensure these new farmers-cum-entrepreneurs face as little risk of loss as possible while they strengthen their foundations and familiarise themselves with agricultural production and marketing.

5. Influence the redefinition of trade restriction policies and distortions in large world commodity markets in favour of the interests of these small-scale farmers.

This can be achieved through the removal of some or all forms of subsidies on agricultural exports, and all other restrictions that might discourage production, in accordance with the Doha Development Round mandate.

6. Encourage investment, through such methods as increased international cooperation, in agricultural research, rural infrastructure, technology development, agricultural research and extension services, and livestock and plant gene banks, as a way of enhancing the capacity of agricultural productivity in developing countries, especially the least developed ones.

7. By 2020, ensure the UN helps maintain the genetic diversity of domesticated and farmed animals and their related wild species, seeds and cultivated plants through establishment of diversified plant and seed banks at both the national and international levels. The body is also to ensure that benefits reaped from genetic resource utilization, as internationally agreed, are shared fairly and equally.

8. Formulate resilient agricultural practices and sustainable food production systems that increase food production and productivity, help maintain ecosystems, boost adaptation to adverse weather conditions, climate change, flooding, droughts and diseases, and progressively boost soil and land quality.

Alarming Number of People Suffering from Hunger and Malnutrition

The United Nations Food and Agricultural Organisation recently released a report which estimates that more than 800 million people of the 7.3 billion in the world (one in nine) are currently suffering from acute undernourishment. The report further affirms that almost 90% of the hungry people, 790 million, are residents of developing countries in Sub-Saharan Africa and Asia. This represents one in eight or 13.5 percent of the total population of countries referred to as developing.

Between 1990-92 and 2012-14, the prevalence of undernourished people all over the world has reduced by 42% with only 9% of that being experienced in developing regions. Asia, being the most populous continent in the world, is home to 2/3 of the world’s undernourished people, but still boasts a better prevalence than the Sub-Saharan region where one in four people remain undernourished. Nonetheless, there has been a decrease in the prevalence of undernourishment in Sub-Sahara Africa from 33% in 1990-92 to 24% in 2012-14, although the number of people suffering undernourishment has actually increased.
The crisis takes its largest toll in India, Bangladesh, Pakistan and other Southern Asian countries, with the 270 million acutely undernourished people in 2012/14 being a marginal decrease of the 1990-92 estimate. China and a few South-eastern Asian nations such as Vietnam, Philippines and Indonesia have had cases of under-nutrition reducing by substantial rates while Latin America is the most successful among developing regions in fighting off hunger.

SDG 2 to Combat World Hunger

In the 1996 World Food Summit, it was resolved that the number of hungry people in developing nations be halved by 2015. A detailed plan for the same was laid and implementation took underway immediately. But then according to the 2012-14 study, the goal is unlikely to be achieved, though a significant reduction has been recorded and shall be further improved upon with the SDG 2. Latin America, the Caribbean region, South East Asia and East Asia have actually met the goal and now the major challenge remains the Sub-Saharan region.

On food security, the 2012-14 report shows that agriculture is still the world’s number one source of livelihood, with more than 40% of the total population depending solely on it. Particularly in the developing nations in Africa, agriculture has provided employment and proved an undisputed source of income in the last few decades. More than 80% of food consumed in the developing world originates from the 500 million small farms across the globe though the proportion has been on a steady decline lately.

The report further shows that men in these developing nations are far more productive than women, and that if women could access resources as easily as men, the number of hungry people in the world could reduce by 150 million.

Final Note

Just like poverty and disease, global hunger and food security is a subject that well merit the attention of international leaders, even from the most developed nations. Through correct practices of fisheries, agriculture and forestry, production of nutritious food can take place, decent incomes will be generated and our brothers from developing countries will have their lifestyles and living standards greatly improved. Right now our soils, oceans and rivers are getting degraded, but if these goals ever get to be implemented, it’s possible to have our old good planet back.

Share this:

SDG 2 – End hunger, achieve food security, improve nutrition and promote sustainable agriculture

Fairtrade: Fair For Who? – Food Security and Food Justice – Ireti Adesida

Fairtrade: Fair For Who? – Food Security and Food Justice – Ireti Adesida

Fairtrade is all about improving conditions for the people at the bottom of the commodity chain. This means the farmers and workers in developing countries who allow us to have tea, coffee, bananas, gold, flowers, cotton and many other commodities we often take for granted. For every jar of coffee or bunch of bananas we consume, there is often a field of workers in inadequate conditions enabling us to have this. This is why Fairtrade aims to place more focus on these people, ensuring they benefit fairly from their hard work.

Food security refers to ‘reliable access to a sufficient quantity of affordable, nutritious food,’ something that many farmers in underdeveloped and developing countries lack. Through the use of Fairtrade, food security for the workers, their families and communities is supposed to increase, but this is not always the case.

Making the rich richer?

The question that always looms close to Fairtrade, is who is really benefiting? The first option is the intended group of workers and farmers. The second, and more controversial option, is the big corporations, the supermarkets, the plantation owners. It is claimed that for these groups, Fairtrade is merely a tool of marketing and deception. Given the money hungry Western world, it is not hard to see why this has become a fierce belief of many. Fairtrade produce is stocked in Tesco, Sainsbury’s, M&S, Waitrose and many more. The Fairtrade logo allows supermarkets to have a higher moral and ethical standing in their industry, and gives them control of the profits made under the guise of helping the poor. For example, Johannessen et al analysed Fairtrade coffee produced in Guatemala and Nicaragua. Their findings demonstrated that as Fairtrade is a part of the conventional market in which the supply chain is controlled by multinational corporations, majority of the economic revenue from the coffee goes to the consumer countries. This is despite the emphasis which the consumer countries place on the producer benefits, which it turns out is only a small part of the picture. More specifically, research from non-profit organisation TransFair shows that, on average, from a 3.5oz Fairtrade chocolate bar costing $3.49, cocoa farmers receive only 3 cents. How can this be justified as fair for the farmers?

Disadvantages of Fairtrade

Not only do consumer countries reap the benefits of Fairtrade, the farmers in developing countries are disadvantaged because of it. Fairtrade intentions have been diluted the further down the supply chain you go, and farmers are often kept locked in poverty rather than alleviated from it.

Firstly, the notion of ‘Fairtrade absolutism’ comes to mind meaning Fairtrade cannot help all farmers. This refers to only a small proportion of farmers in developing countries being a part of Fairtrade schemes. Many of the poorest communities in rural areas will never encounter the types of of plantations that work with Fairtrade, instead they may face worse poverty, thus lower food security, as consumers buy produce with the Fairtrade logo over their non Fairtrade branded produce.

Secondly, although the labor standards of Fairtrade are clearly aimed at protecting exploited children, this does not always prevent it from happening. Often the children of the employed workers at plantations still work in fair trade certified farms as they are not classified as contracted workers, resulting in them being informally part of the plantations. However, it must be acknowledged that there has been very little reported about forced child labor at fair trade farms which is definitely an improvement from other plantations in developing countries.

Thirdly, often is the case that there is a market oversupply of certain fair trade products. Food surplus is already a very real issue regarding excess food and by attempting to deal with the problems in developing countries, Fairtrade is instead contributing to this issue. This is particularly the case with coffee. Coffee is one of the most sought after fair trade products, with sales constantly increasing. However, it has been claimed that coffee prices worldwide have been diminished due to the overabundance of coffee.

coffee price graph.png
This graph shows the high levels of coffee production correlate to lower prices, and therefore lower incomes, for the growers. This tends to be due to the increasing levels of supply which are not met with equally high levels of demand, hence causing market oversupply and food surplus.

Misleading logo

The Fairtrade logo can be somewhat misleading for many consumers. For example, market giant Nestlé, the world’s largest food and drink brand, uses the fair trade logo on their highly popular product Kit Kat. Thus many make the assumption that Nestlé is a fair trade company. However, this is not true as less than 3% of Nestlé’s cocoa purchases is incorporated into the chocolate bar Kit Kat.

Controversy relating to Nestlé comes as they have been accused of using the production of majority of their cocoa produce, which is not Fairtrade. This is ethically unsound and raises questions as to whether Fairtrade should be associated at all with a brand which violates their ethical standards, and whether the ties with such a distinguished brand is a higher priority than their morals.

For Future Fairness

Fairtrade itself acknowledges that they have many improvements and further changes to make to truly fulfil their aims of being fairer to the farmers and workers. Their own research has made it evident that they need to ‘deliver deeper impact for farmers and workers’. They claim this will be through dealing with the disproportions of power within the supply chain, empowering women, extending more core work to farm workers etc. Cynics will say that this is simply a way of the Fairtrade brand attempting to promote themselves as the chances of these improvements happening in the foreseeable future are slim, due to the power and influence that Western corporations have on Fairtrade.

Fairtrade have clearly bitten off more than they can chew.

Share this:

More food for thought – the Food Security Bill | PRS – Ireti Adesida

More food for thought – the Food Security Bill | PRS – Ireti Adesida

Freight traffic: Railways majorly transports bulk freight, and the freight basket has mostly been limited to include raw materials for certain industries such as power plants, and iron and steel plants. It generates most of its freight revenue from the transportation of coal (43%), followed by cement (8%), food-grains (7%), and iron and steel (7%). In 2018-19, Railways expects to earn Rs 1,21,950 crore from its freight traffic.

Passenger traffic:  Passenger traffic is broadly divided into two categories: suburban and non-suburban traffic.  Suburban trains are passenger trains that cover short distances of up to 150 km, and help move passengers within cities and suburbs.  Majority of the passenger revenue (94% in 2017-18) comes from the non-suburban traffic (or the long-distance trains).

Within non-suburban traffic, second class (includes sleeper class) contributes to 67% of the non-suburban revenue.  AC class (includes AC 3-tier, AC Chair Car and AC sleeper) contributes to 32% of the non-suburban revenue.  The remaining 1% comes from AC First Class (includes Executive class and First Class).

Railways’ ability to generate its own revenue has been slowing

The growth rate of Railways’ earnings from its core business of running freight and passenger trains has been declining.  This is due to a decline in the growth of both freight and passenger traffic.  Some of the reasons for such decline include:

Freight traffic growth has been declining, and is limited to a few items

Growth of freight traffic has been declining over the last few years.  It has declined from around 8% in the mid-2000s to a 4% negative growth in mid-2010s, before an estimated recovery to about 5% now.

The National Transport Development Policy Committee (2014) had noted various issues with freight transportation on railways.  For example, Indian Railways does not have an institutional arrangement to attract and aggregate traffic of smaller parcel size.  Further, freight services are run with a focus on efficiency instead of customer satisfaction.  Consequently, it has not been able to capture high potential markets such as FMCGs, hazardous materials, or automobiles and containerised cargo.  Most of such freight is transported by roads.

The freight basket is also limited to a few commodities, most of which are bulk in nature.  For example, coal contributes to about 43% of freight revenue and 25% of the total internal revenue.  Therefore, any shift in transport patterns of any of these bulk commodities could affect Railways’ finances significantly.

For example, if new coal based power plants are set up at pit heads (source of coal), then the need for transporting coal through Railways would decrease.  If India’s coal usage decreases due to a shift to more non-renewable sources of energy, it will reduce the amount of coal being transported.  Such situations could have a significant adverse impact on Railways’ revenue.

Freight traffic cross-subsidises passenger traffic

In 2014-15, while Railways’ freight business made a profit of about Rs 44,500 crore, its passenger business incurred a net loss of about Rs 33,000 crore.17  The total passenger revenue during this period was Rs 49,000 crore.  This implies that losses in the passenger business are about 67% of its revenue.  Therefore, in 2014-15, for every one rupee earned in its passenger business, Indian Railways ended up spending Rs 1.67.

These losses occur across both suburban and non-suburban operations, and are primarily caused due to: (i) passenger fares being lower than the costs, and (ii) concessions to various categories of passengers.  According to the NITI Aayog (2016), about 77% to 80% of these losses are contributed by non-suburban operations (long-distance trains).  Concessions to various categories of passengers contribute to about 4% of these losses, and the remaining (73-76%) is due to fares being lower than the system costs.

The NITI Aayog (2016) had noted that Railways ends up using profits from its freight business to provide for such losses in the passenger segment, and also to manage its overall financial situation.  Such cross-subsidisation has resulted in high freight tariffs.  The NTDPC (2014) had noted that, in several countries, passenger fares are either higher or almost equal as freight rates.  However, in India, the ratio of passenger fare to freight rate is about 0.3.

Impact of increasing freight rates

The recent freight rationalisation further increases the freight rates for certain key commodities by 8.75%, with an intention to improve passenger amenities.  Higher freight tariffs could be counter-productive towards growth of traffic in the segment.  The NTDPC report had noted that due to such high tariffs, freight traffic has been moving to other modes of transport.  Further, the higher cost of freight segment is eventually passed on to the common public in the form of increased costs of electricity, steel, etc.  Various experts have recommended that Railways should consider ways to rationalise freight and passenger tariff distortions in a way to reduce such cross-subsidisation.

For a detailed analysis of Railways revenue and infrastructure, refer to our report on ‘State of Indian Railways’.

http://www.prsindia.org/theprsblog/more-food-thought-food-security-bill

Celebrating the first anniversary of the Food Security and Nutrition Agenda of Afghanistan

Celebrating the first anniversary of the Food Security and Nutrition Agenda of Afghanistan

Celebrating the first anniversary of the Food Security and Nutrition Agenda of Afghanistan

On 12th November 2018, in conjunction with the AFSeN-A Second-High Level Steering Committee meeting, the first anniversary of the Afghanistan Food Security and Nutrition Agenda and Afghanistan union with the SUN Global Movement was celebrated in the office of the Chief Executive.

H.E. The Chief Executive Dr. Abdullah Abdulla in his opening remarks appreciated one year progresses and indicated that given the current context, we should do more to improve the food security and nutrition situation in Afghanistan.

H.E Nasrullah Arsalai the Director General of the Council of Minsters’ Secretariat, the government coordinator for the agenda and Afghanistan focal point for the SUN Global Movement, updated participants on AFSeN-A one year achievements and shed lights on next year actions. Dr. Said Shamsul Islam Shams, the coordinator of the technical secretariat presented the multi-stakeholder food security and nutrition strategic plan and the concept on Afghanistan National Food Authority which were welcomed by participants.

Ministers and head of UN and development organizations pledged their commitment to continue supporting the AFSeN-A in the future.

AFSeN-A video clip and Video message of Gerda Verburg the SUN Coordinator for the first anniversary were displayed which were much appreciated.  Awards and appreciation letters were distributed to key players and stakeholders who supported the AFSeN-A and ensured active participation in coordination platforms in the past year.

H.E. @AfgExecutive presents an award to @UNICEFAfg Deputy Representative, Stefano Savi, recognizing UNICEF’s support to the #Afghanistan Food Security and Nutrition Agenda (AFSeN-A). In 2017, #Afg joined the @SUN_movement, becoming its 60th member. #ForEveryChild, nutrition pic.twitter.com/5wl3QAzvgT

— UNICEF Afghanistan (@UNICEFAfg) November 14, 2018