Can Targeting Work in Food Security Programmes? A Study of Consumer Behaviour and the Fair Price Shop System for Food in India

Abraham Koshy and Vasant P. Gandhi

No WP1998-06-07, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: In most major subsidised food distribution programmes, targeting of benefits to the principal beneficiaries is significant problem. For India’s public distribution system for foodgrains which works through an immense network of 433,000 fair price shops, distributing nearly 20 million tons of foodgrains annually, this question of targeting is of great importance. The study examines this issue through primary survey data of consumers and shops from the food-deficit state of Gujarat. The study finds that marketing of consumer goods has undergone substantial expansion in recent years. Examination of the consumer behaviour through a logit model shows that consumer sourcing for essential food staples of wheat and rice at fair price shops is predominantly negatively related to well-being indicators of income, land ownership, irrigation and education. It finds through a tobit model estimation that consumer utilization of the food entitlements at fair price shops is also negatively related to different well-being indictors. A major reason is quality. The targeting of the system for the poor could thus be better than usually assumed. By channelling foodgrains of this kind, the system may be actually providing a reasonably good service for both producers and consumers, especially the poor.

Date: 1998-06-07
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