Food Crisis in India - Essay Example

Food crisis in India Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name Insert Date Here (Day, Month, Year) Introduction It was 9th June 2008, one of the hottest days of the month, Akushwah family sat under the Neem tree waiting for the auto rickshaw, as they wanted to pay obeisance in form of food offerings at the Blue Temple, as a son was born to them a year ago. As they waited for the auto rickshaw, excitement was clearly seen in their eyes as they could save in whole year a bucket full of Indian chapattis, lentil dahl and channa, or chickpeas. This food they would take as an offering to the temple. They had been earning only $1 a day, and if it had not been for the increase in the food price, then they could have saved this food in half-year time. They were saving money for food at the cost of medicines. (Crowe 2008: Online) The inflation in India is hitting hard at the face of the poor people. As the economy is growing at the rate of 9 per cent per month, the inflation reached to about 8.98 per cent as on 1st November 2008 and on 11the July 2008; it was 11 per cent high in 13 years and 6 per cent more than the year before. Madhya Pradesh in India has the highest child mortality rate and child malnutrition rates in the country, and the supplementary programmes initiated by the government are continuously under threat. The prices of common vegetables like beans, carrots, potatoes etc. have also increased enormously. As the economy of India was taking off, ordinary man was feeling their pockets filled and their faces satisfied. Interest rates were getting low and investments were on the rise but now the common men are bearing the brunt of the increase in the food prices. Situation in India regarding food crisis Indian policy makers and analysts are worried on rise in food prices, as it is driving force behind rise in inflation. In April 2008 in the capital of India, Delhi, milk cost 11 per cent more than previous year and prices of edible oil increased by 40 per cent during the same period. Prices of rice also increased by 20 per cent. For the economists, inflation is just like taxing poor, as the main spending of the poor people in India who are in majority is food. Approximately one out of four Indians is earning less than $1 a day and only three out of four earn $ 2 or less. Though Indian economy grew at a rate of 8. 5 per cent, but its growth has only been confined to industrial and services sector and agriculture has merely grown at the rate of 2.5 per cent since last five years and this trend is even lower as compared to the previous decade. (Thakurta 2008: Online) Causes of food crisis: Condoleeza Rice identified four causes for the current food crisis. First she assumed “improvement in the diets of people in India and China”, (Times of India, 2008) as the most probable cause as it is forcing the government of India to keep food, which in turn is causing global supply shortage. In her session at the Peace Corps 2008 Country, she further stated that it could be due to the decline in production and the putting export caps over the amount of food. Thirdly she said it could also be due to the rise in the cost of fuel prices including rise in the cost of fertilizers and transportation costs. The fourth factor she stated was due to the biofuel, which could not be a very big problem but probably, could be indirectly a cause of the food crisis. It happened because of the low price of cereals up till 2005; United States and EU governments granted subsidies to the agribusiness corporations for developing the biofuel industry. These corporations intended to raise their profits by selling cereals at much higher rates and increasing the production of biofuel to earn more profit from it. They performed their operations by assuming that what had not been possible with oil could be made possible with the soybean, beet, cereals and sugar cane. For this purpose, they asked for subsidies from the public authorities so that they could make the most costly bio-fuel activity profitable. Most of the nations like Washington, the European Commission in Brussels, and other European capitals too agreed to it assuring that they wanted to secure energy independence for themselves and made governments convinced that biofuels would in fact have a positive impact on their environment. This policy drained the most important food products towards the production of the biofuel. In the same way lands, which were used in the production of food began to be used for biofuel production. This also reduced the supply of food products and led to the increase in prices. Also, in the years 2007-2008, commodity trading of farm products was very high. Prior to 2007, US institutional investors had made US housing industry target for their high returns but after subprime crisis that rocked in 2007 in US, they moved to agricultural commodities and biofuels and did future trading in crops on stock markets of Chicago, Minneapolis and Kansan City, which are the world’s major markets for speculation on cereals. Not only this, they also traded in future on other stock markets on oil and gas productions leading to speculation on rise in prices. The policies initiated by the World Bank and Federal Bank since the debt crisis have deprived the developing countries from the protection. These policies include among others forcing the Indian government to restrict lands for the cultivation of crops, to specialize itself in the products which are most demanding in the export market, to remove the price systems that were being used to stabilize the prices, to put an end to the self sufficiency of the reserve stocks of the cereals and making the local economies reduce to the position whereby they most of the time felt dependent on the world market etc. (Toussaint 2008: Online) Moreover the liberalization policies in the imports of the produces especially food crops also led to the negative consequences. Current Responses India in its efforts to control the food crisis put a ban on the export of the non- Basmati Rice and lowered the import duties on edible oils on 2nd April 2008. This had a direct impact on the market causing four per cent reduction on the prices of soybean, soy oil and mustard and reduced the trading. Government had also reduced the import duties on cooking oils, maize and along with that extended the ban on the export of pulses. Still India had the gravest task in front of it in its process of reducing inflation. Indian Government is also making steps to cut the duties on export and control the supplies of the export of rice. As India is a second largest exporter of rice therefore in recent years its ban sent shock waves in the whole system. The international prices were raised to about $300 to $400 per ton for standard grade rice and continued to increase. Soon after India, Vietnam, China, Cambodia, Indonesia, and Egypt also followed the same procedure. Suggested Responses In suggested responses, Prime Minister of Britain Gordon Brown called upon United Nations, World Bank and the International Monetary fund to address the issue of the rise in prices. He called upon the Japanese Prime Minister Yasuo Fukuda, chairman of the G 8, Group of Eight industrial nations, requesting international agencies to form strategies at a global level to reduce the food costs. (Wroughton 2008: Online) Dr Suman Sahai, a convener of Gene campaign suggested certain remedies to remove India from food crisis. In the first step, it is necessary to refurbish the services of the institutes like the Indian Council of Agriculture Research (ICAR), Agriculture Universities and the food distribution system. She suggested that new and radical approach is required to include the new ideas and perspectives of several stakeholders, which were currently ignored during the consulting process during the agriculture process; experts from the different fields like water conservation process, experts from plants, genetics process and from civil society organizations. It is also suggested that India should reduce the biofuel programs and divert the attention towards the production of food process. As Indian agriculture is labour intensive and therefore in the Indian agricultural system there should be a need to reduce the use of petroleum, Chemical fertilizers etc. (Sahai: Online) To reduce the food crisis, it is also suggested that genetic diversity could be maintained in the different varieties of crops, livestock, species, and aquaculture and most important of all in the soil. The biodiversity in the process of soil is most important for sustaining the good yields. It is also suggested that there should be ban on SEZ on fertile and cultivable lands, there should also be a need to reinitiate the new agricultural policies and research methods and adoption of the new implementation system and most importance should be given to the policies in the agricultural sector. (Sahai Online) Conclusion Since last forty years India has now been enjoying constant freedom from the famines but again the situation has become grim. Newspapers are covered with the stories on the famine in Bengal, which is India’s most populated state. It is a fact that whole India is in the grip of the food crisis. The causes of the food crisis are many but the solutions are very less. As suggested above, Indian has banned the export on rice products but as suggested by Swaminathan S Aiyar, the most famous economist and World Bank consultant, this policy of the rice export shows that “India is the biggest hoarder.” (Haniffa 2008: Online) In other words India has large number of hoarders. But now the biggest challenge in front of the Government of India is to put a radical stop on the hoarding process and increase the export of the rice. He estimated that “a relaxation of trade curbs can cut world (food) prices by 30 percent and in the case of rice, it would cut world prices by more than 50 percent.” (Haniffa 2008: Online) He further states that the problem is not with the shortage of prices but with not allowing the export of the rice to give protection to the domestic consumers, this is in fact leading to artificial reduction of the grains in the world market and artificial raising of the prices. In the last he suggested that in fact few years ago food prices in India were increasing at a rate of 20-30 per cent which was more than the global food prices but now the situation is different it is not 20-30 per cent less than the original global prices’. Reference List Crowe, S. 2008. Food crisis ravages India’s poorest children. [Online] Available: http://www.unicef.org/infobycountry/india_44409.html [10 December 2008] Haniffa, A. 2008. 'India biggest hoarder, food crisis to worsen'. [Online] Available: http://news.rediff.com/money/2008/jun/11food1.htm [10 December 2008] Sahai, S. India can beat the food crisis. . [Online] Available: http://www.cbd.int/doc/external/mop-04/gc-en.pdf [10 December 2008] Toussaint, E. 2008. Getting to the root causes of food crisis. Available: http://www.cadtm.org/spip.php?article3865 [10 December 2008] Thakurta, P.G. 2008. Is India facing a food crisis? [Online] Available: http://news.bbc.co.uk/2/hi/south_asia/7327858.stm [10 December 2008] The Times of India. 2008. Food crisis: Rice blames it on better diet in India, China. [Online] Available: http://timesofindia.indiatimes.com/World/Europe/File_Food_crisis_Rice_blames_it_on_better_diet_in_India_China/articleshow/2996040.cms [10 December 2008] Wroughton, L. 2008. UK's Brown calls for G8 action on food crisis. [Online] Available: http://www.reuters.com/news/globalcoverage/%20http://www.reuters.com/article/telecomm/idUSN0920217020080410?sp=true [10 December 2008] Read More