Editorial: Food worries

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Editorial: Food worries

Business Standard / New Delhi April 17, 2008

On the eve of the annual Fund-Bank meetings, Robert Zoellick, president of the World Bank Group, voiced alarm and a dire warning about the global food situation. His emphasis on this issue reinforces the view that food inflation is perhaps the most significant threat to the global economy today, even more than the financial crisis in the US. The largest growth engines, China and India, are deeply affected by the problem, as are other Asian economies, which are also amongst the fastest growing in the world. Asia, at least, has its growth momentum and fiscal cushions to fall back on as it tries to deal with the problem. Mr Zoellick’s worries are all the more significant as far as Africa is concerned. While the resource-rich economies in that continent have benefited from the increase in commodity prices, the widespread vulnerability to rising food prices is all too obvious.

Even as the issue climbs to the top of the political agenda in India, threatening to disrupt the remainder of the Budget session of Parliament, some comfort can be drawn from the fact that India is amongst the best off as far as Asian countries are concerned. The wholesale price index for food items rose by annual rates of between 5 and 6 per cent during February and March. In China, the headline rates for January and February were around 13 and 16 per cent, while in Indonesia, they were around 13 per cent. Vietnam has it particularly bad, with prices increasing by over 30 per cent in March. Only Malaysia seems to have achieved inflation rates lower than India’s. The positive implication of this comparative picture is that India’s food price situation is currently being driven by relatively favourable domestic circumstances, and further comfort will be provided by a good monsoon. The advance forecast for the south-west monsoon was announced yesterday by the India Meteorological Department (IMD), predicting monsoon rainfall this year to be 99 per cent of the long-period average. However, the situation of overall scarcity does pose a threat as well. If the monsoons are indifferent or poor, the option of importing one’s way out of shortages appears increasingly remote. International trade in staples like rice and wheat will virtually dry up as countries strive to secure their own supplies by imposing export restrictions and other measures.

From India’s perspective, it is ironic that, even as the economy moves to a new growth trajectory and a far more significant global role, the country continues to be vulnerable to the age-old threat of food shortages. The relief from good monsoons and higher production of staples worldwide, both of which seem possible this year, will be at best temporary. The root cause of this problem remains the complete absence of change in the economic environment for agriculture, whether it relates to output prices, input prices, investment in infrastructure and a host of constraints. The immediate priority of government is clearly to protect vulnerable households from the rising prices, for which a combination of the measures already undertaken and effective implementation of safety nets — a true test for the NREGS — and distribution of food supplies is required. But these will not address, indeed may even be in conflict with, the structural changes needed to provide more lasting solutions. The agricultural reform agenda must once again take centre-stage in the policy debate; it is now a matter of survival.

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		Discussion Board / User Comments

September 27 , 2009 ,10:39 IST

The Governmentof India pumped in Rs. 3,32,000 crore by way of deficit financing 92009-2010 budget)another 30 lac croere deficit of states added to it total of 44 lac crore deficit is being monetized. There 11 times more money than the goods available. Miltom Friedman has said effect shows after 24 months. In july 1011 price of gold willbe Rs.25000/- for 10 grams Petrol will be Rs.100 per litre rice will be Rs.70 per kg. Tur Dal will be Rs. 150 per kg. There would be starvation deaths not because of shortage of grains but due to hoarding of grains. There would be utter chaos. this is so clear but our myopic political leadership can't see it. Hyper inflation will takeover jumping stages of recovery and boom. The situation in India typical. A dual economy is run One for the share market and real estate market another for the poor starving people whose physical labor is exploited by tarders industrialists without any mercy and legal restraint. Dr. Krantikumar Dr. Kranti Sharma

Reply

April 17 , 2008 ,15:01 IST

A public service message - will interest those who are engaged in providing food security too - HBO is screening the Oscar Award Winning documentary "An Inconvenient Truth" on Tuesday, 22 April at 9PM and at Sun, 27 Apr 1PM. The movie generated grass root level discussion on the theme of climate change. Al Gore - former Vice Prez of US & Nobel Peace Prize winner has strong associations with this movie and also starred in this. Those who watch TV..., do not miss out this documentary.

Reply

April 17 , 2008 ,00:22 IST

The poor in india are not worried about rise in food prices. They are worried about low wages.Though the directive principles (art.43)ordains a living wage,the market gives the workers subsitence wage. Minimum Wages under Mmimum wges Act for unorganized sector (92% of total work force)have not been revised and never implemented. workers are paid per day and not per hour as in USA. The workers are hired for eight hours but forced to work twelve hours without over time wage Dr.Kranti Sharma

Reply



	Reply by kutubshah:	September 22 , 2009 ,11:48 IST

	Elitism and dynstic rule have now crept in to India's democratic government. The salaries of workers in organized sector increased ten fold but the wages of workers in unorganized sector remained stagnant. krashar is right in exposing the factum.

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