ashwanimahajan.com

Suman K Jha
Posted online: Thursday, May 15, 2008 at 2355 hrs IST
Towards food insecurity
In the column ‘Economy Watch’, Ashwani Mahajan says that “India is fast moving towards food insecurity.” He writes, “India which had emerged as an exporter of foodgrains has become a net importer. This is also true that developing countries are making large-scale imports of food grains ... Two weeks back Prime Minister Dr Manmohan Singh forewarned the international community that the world is moving fast towards shortage of foodgrains. This would not only lead to a high rate of inflation, but in fact even the development efforts of the third world would get adversely affected. Prior to the PM’s statement, Finance Minister P. Chidambaram had complained about reduction of area under wheat cultivation by the US in an attempt to enhance its bio-fuel production. And now it’s the turn of US president George Bush. According to his statement a week ago, the consumption in fast growing India and China is a major cause of the rapid increase in food prices. Before him, US Secretary of the State Condoleezza Rice had also made a similar statement blaming the rising prosperity of India’s huge middle class for spiralling food prices.
He concludes by saying, “When we are neglecting our agriculture ourselves, we don’t have the moral right to blame the US for the rising prices of foodgrains as it is producing bio-fuel from agriculture.”

Two weeks back Prime Minister forewarned the international community that world is moving fast towards shortage of food grains. This would not only lead to high rate of inflation, even development efforts of the third world would get adversely affected. Prior to Prime Minister’s statement Finance Minister P. Chidambaram had complained about reduction of area under wheat cultivation by US in an attempt to enhance its bio fuel production. And now it’s the turn of US president George Bush. According to his statement a week ago, consumption in fast growing India and China is a major cause of the rapid increase in food prices. Before him Secretary of The State Condoleezza Rice had also made similar statement blaming rising prosperity of India’s huge middle class for spiraling food prices.
There is no point in George Bush’s argument considering the fact that according to UN since 2006 ,USA's consumption of food grains increased by huge 12 percent against only 2.5 percent annually in India.Irrespective of this debate there are not two views in this matter that the country is suffering from the shortage of food grains. This not only raises cost of living, a large number of people are also at the verge of starvation. In the last two years, the price of wheat flour has more than doubled from Rs8 to Rs18\kg. Same is the case with rice and other food grains like pulses, vegetables etc. When the country started facing shortage of food grains, the government decided to import food grains from abroad. After that, the international prices of food grains started sky rocketing and India had to import the food grains at exorbitant prices, much higher than what was being given to our farmers.
India which had emerged an exporter of food grains for a long time has become a net importer. This is also true that developing countries are making large scale imports of food grains .Situation for India becomes even more alarming if we compare availability of food grains with increasing population. In the last five years India’s population has increased by 8%, whereas food grains production could increase by hardly 5%.In the last one decade production of oil seeds has definitely gone down. Despite the fact that oil is very essential part of our consumption, government did not make any plan to increase production of oil seeds. This ignorance of oil seeds’ production has become a major cause of our increased dependence on oil & oil seeds imports. There is not doubt about the fact that in the whole world the prices of traditional food grains like wheat, corn and rice have been rising. According to UN in the last six months the prices of the food grains have increased by 50%. The major factor behind increasing prices of food grains is historic decline in the production of food grains world over. Food and Agriculture Organisation(FAO) has also cautioned that world production of wheat would be only 142 million tones by the year 2008, which is 10% less than the last year’s production. Situation of rising prices has been made even more worst by constantly rising international price of crude oil. The price of crude oil has been moving around $120 US per barrel for the last few days. Constantly rising prices of crude oil is prompting various countries to shift their crop pattern such that the land previously been used for food grains production is now being used for bio fuel. Apart from this food products are also being used for extracting ethanol. In the year 2006-07, US utilized 20% of its corn production for extracting ethanol. It is believed that by the year 2016, US would be utilizing 32% of its corn production for producing ethanol. In the light of rising prices of crude oil US has set target for itself for producing 25 billion gallons of bio fuel in the next 10 years. Europe has set a target of 5.75% of its diesel needs to be fulfilled from plants by the year 2010.The China is extracting ethanol not only from corn but even from wheat and rice. Experts believe that this tendency will increase further. Even UN believes that US and European Union are both responsible for this sudden international food crisis, as these nations have reduced their production of food grains in order to produce more bio fuel. These countries have started shifting their land in favour of bio fuel plants.

Demand is gaining ground that subsidy being given for production of bio fuel is stopped forthwith. UN’s World Food Program also believes that in the next two three year prices of food grains & edible oils would continue to increase further. According to their estimates by the year 2008-09 prices of food grains may increase further by 35%. Today 70% of developing countries are dependent on imported food grains. By the year 2030 situation would be even worse. According to a study by the World Food Program by the year 2030, developing nations would be able to fulfill hardly 86% of their food grains needs. As a result of this their dependence on imports would increase further. At present developing nations are importing 103 million tones of food grains. This dependence would increase more than twice to 265 million tones in the next 20 years. US, European Union, Canada, Australia and Argentina would be the largest food grains exporters, it believes.

All this clearly depicts that not only there is a shortage of food grains in India; even the possibilities of food grains imports to make up this deficiency are also very meager. There is hardly any single year when India could produce food grains for its need for the last so many years. For the last so many years we have been importing wheat. In the year 2007 we made a import of 5 million tones of wheat. Normally government keeps buffer stocks of 40 million tone of food grains. But due to advent of corporates in the procurement of food grains, its buffer stock has constantly been depleting and government had to depend upon import of food grains to supplement supplies. Now even rice is being imported, apart from wheat.

Looking at the international deficiency of food, it is even more essential now that India once again strive for food self sufficiency. But situation has worsened in the last two decades due to neglect of agriculture. Not only that government is spending much less on agriculture than before, rising agriculture input costs, lack of infrastructure like electricity, roads irrigation etc and un-remunerative prices of agricultural products are all contributing toward ill health of agriculture. Even rising number of farmer suicides and insufficient food grains production are the result of the same.

When we are neglecting our agriculture ourselves, we don’t have moral right to blame US for the rising prices of food grains as it is producing bio fuel from agriculture. We have to fulfill our food needs domestically and not by importing food grains at high prices from US and other countries. In addition to this we also have to arrange for effective distribution and ware housing facilities, Situation is alarming. If we don’t rise to the occasion, worst food crisis is not very far off.