Dr Mandeep Azad and Dr Sumit Mahajan
The global financial crisis drew international attention away from the food crisis, but this continues to fester and even grow. When the global food crisis first hit international headlines in 2008, international bureaucrats referred to the current problems in the world food situation as “a silent tsunami”, but the truth is that it was not a sudden and unexpected crisis: the signs have been around for some time now and it could easily have been seen to be coming. Even so, its impact has been powerful and already quite devastating, as food shortages and high prices of food have adversely affected billions of people, especially the poor in the developing world
The agriculture in India is still, as they say, ‘gamble in monsoons’ as the crops are highly dependent on the rain and a drought can put further adversaries on food security as the demand-supply imbalance further aggravates the food inflation. The volatility in food prices is cause of worry for everybody from an ordinary Indian to those in official circles with the devastating effect they can have on food security. Price volatility has a strong impact on food security because it affects household incomes and purchasing power. Not only the rise in foods prices can further increase the foods insecurity of already poor, but also can reduce the physical well being of those who just are above the threshold of consuming just enough nutrition for sustenance. Price volatility also interacts with price levels to affect welfare and food security. The higher the price, the stronger the welfare consequences of volatility for consumers, while the opposite is true for producers. The volatility in food prices is not new for Indian economy.
It is known fact that food prices are heavily dependent on rainfall/ monsoons as food inflation rose ferociously during 2009-10 when only 30 per cent of districts received normal rain and the country was declared drought-hit. But Indian policy makers have been to an extent successful in insulating the country from world food price shock (especially, wheat and rice) of 2007-08 which hit food security of many other developing countries severely. India and China, have kept stabilization policies that isolate domestic prices for rice or wheat from international price fluctuations The policy stance was to attempt insulation of domestic prices from the high world prices by combining different measures including high subsidies, lower tariffs and export restrictions. The price volatility in different foodstuffs has also been very much different from each other. The prices of cereal and products which rose steadily and reached a peak in 2009-10 declined afterwards along with general food group inflation as well as general inflation, but the decline in rise of cereals and products’ prices following 2009-10 and showed no rise in 2011-12. The pulses and products who registered highest price increase (due to the drought) in 2009-10, registered an actual decline in their prices in the following year and then showed no increase in 2011-12. Not only the oils and fats registered no rise in prices in 2008-09, they further faced a decline in their prices in 2009-10 and showed no rise in prices in 2011-12. The prices of milk and products have shown persistent increase year after year which is also growing with time though steadily.
Food crisis is very much a man-made crisis, resulting not so much from ineluctable forces of global supply and demand as from the market-oriented and liberalising policies adopted by choice or compulsion in almost all countries. These policies have either neglected agriculture or allowed shifts in global prices to determine both cropping patterns and the viability of farming, and also generated greater possibilities of speculative activity in food items. This is not to deny the undoubted role of other real economy factors in affecting the global food situation. While demand-supply imbalances have been touted as reasons, this is largely unjustified given that there has been hardly any change in the world demand for food in the past three years. In particular, the claim that food grain prices have soared because of more demand from China and India as their GDP increases, is completely invalid, since both aggregate and per capita consumption of grain have actually fallen in both countries. Supply factors have been – and are likely to continue to be – more significant. These include the short-run effects of diversion of both acreage and food crop output for biofuel production, as well as more medium term factors such as rising costs of inputs, falling productivity because of soil depletion, inadequate public investment in agricultural research and extension, and the impact of climate changes that have affected harvests in different ways
There is no doubt that India is facing food crisis but is able to sustain itself from this crisis in a better way in comparison to other countries. Food crisis is more a man created phenomenon in terms of marketing network, storage and infrastructure. India must believe in a notion ‘prevention is better than cure’. India has to meet its needs itself and the current market prices make imports unviable. Future looks uncertain if India and other countries continue to neglect agriculture as has been the case for decades. As due to uncertain weather during 2009 the crisis effected our country and there are chances that it may come up with more severe intensity. So improved and sustainable agriculture and livestock practices are the only ways out which can insulate India from on -going food crisis and prevent such a crisis which is knocking our doors from time to time.
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