Food Prices rise due to climate change induced supply shock: Pawar

Pawar, who is attending the meet as a representative from India said that the global food price spike of 2008, 2010 and the current one of 2012 is suggestive of fearsome impact of supply shocks due to extreme climatic events in the very small sources of large food suppliers.

“The shortfall in supplies triggers chain reaction of panic buying and speculative price rise. Therefore, increasing agriculture production and diversifying the production base has become necessary,” Pawar said.

World food prices have again started showing a rising trend in 2012 after lying low in 2011.  According to a recent report by Rabobank, world food prices are expected to hit a record high in 2013 because of drought in some parts of the globe.

The report said that Food Price Index of UN body FAO is expected to rise by 15 per cent by the end of June 2013 as drought in the US, South America and Russia have diminished crop prospects and tightened already low inventory levels.

“Unlike the staple grain shortage seen in 2008, this year's scarcity will affect feed intensive crops with serious repercussions for animal protein and dairy industries,” the report had said.

Commending India’s role in helping to keep global prices under check in these times of crisis, the union agriculture minister said that India’s initiative to open the export market of wheat and rice in the last couple of years has helped in stabilizing the world cereal market.

“IN the last 12 months due to record production of rice over the years, we (India) have already exported about 8 million tonnes of rice. The exports from India has not only stabilized the global supplies but have helped in easing the ruling high prices to affordable levels,” Pawar said.

The minister said that global rise in food prices in rapid succession hits the developing world the hardest, where a large number of poor live.

“Commodity markets and international trade need to be more transparent and reliable to inspire confidence for adequate supplies at reasonable price especially during periods of crisis,” Pawar said.

He also said India along with other FAO nations are developing an ‘Agriculture Market Information System’ and ‘Rapid Response Forum’ to ensure better policy coordination through sharing of information.