All the Aces up our sleeves.
The year 2008 has not brought cheer around the world. On the contrary, news from many countries is depressing and gloomy. Global food prices have risen dramatically, adding a new level of danger to the crisis of world hunger. In Africa, food riots have swept across the continent, with recent protests in Burkina Faso, Cameroon, Ivory Coast, Mauritania and Senegal. In most of West Africa, the price of food has risen by 50 percent—in Sierra Leone, 300 percent. In Cameroon, Reuters reports that at least 24 people have been killed; over 1600 people have been arrested since February, and already 200 have been tried and given jail sentences of up to three years.
In the United States, there has been a 41 percent surge in prices for wheat, corn, rice and other cereals over the past six months.
The most acute effects have been seen in Egypt, where thousands of people have resorted to violence due to shortages of basic food commodities and rising food prices. At least 10 people have died in riots that erupted at government-subsidized bakeries. The unavailability of basic food products such as bread, rice, sugar and cooking oil, coupled with high food prices has led many to protest against the Egyptian government and resort to violent tactics. Thousands of Indonesians demonstrated outside the presidential palace in Jakarta after soyabean prices soared more than 50 per cent in the past month and 125 per cent over the past year, leaving huge shortages in markets. News reports from Bangladesh, Pakistan and Mozambique tell similar stories. In Malaysia, there were large-scale demonstrations when palm oil disappeared from the grocery stores. The simple reason for this disappearance was that the palm oil prices had increased dramatically in world markets but the stores were forced to sell it at controlled prices.
On June 2nd, speaking at the UN food security summit held in Rome, Secretary General Ban Ki Moon warned that unless world food production increases by 50 per cent, a billion people world wide may go hungry and violence and food riots on a large scale is a distinct possibility.
Adding to the woes, the rapid-fire increase in the price of crude oil to an unimaginable level of one hundred and forty US dollars for a barrel increases the cost of production of food as well as transportation costs.
These news stories from around the world made me wonder about the possible scenario for India, which after all is the home for one fifth of the humanity. Would we have enough food to eat or our poor would have to resort to rioting to fill their bellies, was the question uppermost in my mind. To satisfy my curiosity, I turned to internet as usual. A short search came up with some astounding and reassuring results.
India produces over 136 million tons or rice in a year and is ranked second only to China, in the world. We produce well over 72 million tons of wheat and are again ranked second in the world behind China. Corn production in India is over 15 million tons with Sixth rank in the world. In oilseeds, we are ranked at five with a production above 34 million tons. Sugar production is expected around 25 million tons again at second rank, only behind Brazil. As far as milk production is concerned, we are world’s top ranked country with production exceeding 100 million tons.
Undoubtedly, this is a very reassuring and confidence boosting picture. Food security does not seem to be an issue at all for India. Furthermore, since the food is produced domestically, transportation costs are bound to be limited. Many small countries like Singapore, import hundred percent of their food. For such countries, oil prices are very crucial as transportation costs of food are directly linked to oil prices. In Singapore, food prices are continuously on the rise as oil peaks newer and newer heights.
For many years, environmentalist authors like Mrs. Barbara Kingsolver from U.S.A. have been speaking against long distance import of food and how detrimental it is for our environment. According to them, burning of fuel for this transport produces large quantities of green house gases for no valid reason. It is true that I might miss strawberries from California or grapes from South Africa on my dinner table if only locally grown food is available to me. Here again, India seems to be in luck. We produce almost every type of fruit in the country. We may miss California strawberries but the same fruit produced in western Maharashtra would be always available to us. In a way, this explosion in the transportation costs would be welcome by environmentalists as it helps their cause.
India therefore seems to have all the aces up her sleeve as far as food security is concerned. What is required is an efficient distribution system and completely open market economy, which is fully open to competition.
7th June 2008
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