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|A dining table drought|
|Saturday, 14 November 2009 18:30|
Stagnating or declining food production will not only affect middle class diets. It will impact the country’s social stability adversely.
Source: The Asian Age
The drought hit home when I found no butter in my neighbourhood grocery store a few weeks ago. The shop attendant said the delayed monsoons had affected milk production and butter stocks. Amul, which accounts for a large chunk of the country’s butter supply, could not produce enough, and therefore the crisis.
As I mulled over my options in a butter-less world, suggestions streamed in. "Try home-made butter", advised one friend. "Try Nutralite", said another. A third pointed out that the disappearance of butter could actually be a blessing in disguise as butter blunts the taste in food. I weathered the crisis but one thing was clear. The drought had come to the dining table.
Urban, middle class India rarely discusses drought unless it is at a seminar or the subject of a best-selling book or a film. It is typically something that happens to other people whose paths one is unlikely to cross. But with scarcity and galloping prices of day-to-day food items like sugar and pulses, drought is no longer the far-away story about folks living in rural backwaters.
As leaders gather in Rome for the United Nations Food and Agriculture Organisation’s World Summit on Food Security this week (November 16-18), hunger and the devastation caused by drought are slated to make headlines. The view from India is far from rosy.
India shook but never tumbled as the economic crisis convulsed much of the world over the past year. But this nugget of good fortune has been counterbalanced by a severe summer drought that has singed almost half of India’s 600-odd districts. In thousands of villages decimated by drought, men, women and children are grappling with acute hunger. Many are being forced to eat seeds, wild herbs, roots, leading to disease and sometimes death. In September this year, the non-governmental organisation (NGO) ActionAid reported that children in almost all 3,500 villages of Jharkhand’s Palamau district had not got mid-day meals at their schools. A friend from Hyderabad called to say the other day that for the child inmates in a NGO-run orphanage in his city, daal (pulses) has become the big treat — served sparingly and twice a week.
Montek Singh Ahulwalia, the government’s deputy planner-in-chief, says food prices will even out by March. It is tempting to take comfort in his soothing words.
But the government’s own data and statements by other key decision-makers do not make it easy for the optimists. Agriculture minister Sharad Pawar publicly admits to being worried about the shortfall in paddy (kharif) production (now pegged at 21 million tonnes) and the general food price inflation. On top of Mr Pawar’s wish list is, no doubt, a good rabi (winter) crop that will stabilise prices. But in the meanwhile, India, the world’s second-biggest rice producer, has floated three tenders to import a total of 30,000 tonnes of rice, through state-owned companies, sending a frisson in the global markets.
Official figures merely confirm what we know from experience: Food prices in the last week of October 2009 rose by 13.68 per cent from what it was a year ago. Over the past year, the price of potatoes has doubled. So have onions. Pulses are dearer by almost 30 per cent. Rice is dearer by 15.95 per cent, wheat by 5.19 per cent, fruits by 7.05 per cent and milk by 7.99 per cent.
The one consolation is that we are not alone in battling soaring food prices. In this inter-connected world, we are linked in our miseries.
Rain in Brazil, for example, can impact our lives and diet.
"India is the world’s second-largest producer of sugar after Brazil, and the world’s largest consumer. With low domestic output, India is importing sugar in a situation when global supply is expected to be tight, thanks to heavy rains in Brazil, the world’s largest sugar exporter. The price of sugar, already on a multi-year high, is expected to rise even further over the winter. This drives home the point that it’s not just the domestic monsoon that is a concern. Weather conditions in countries far from us can have a strong impact on what we shell out when putting food on the table", points out Sumita Kale, chief economist, Indicus Analytics Pvt. Ltd., a leading, independent economics research firm.
Rain or the lack of it is one part of the story of surging food prices. Speculators and agro-futures have also played a role in the current turmoil, argue many analysts. Last year, in a far-reaching report on global food prices, the UN Food and Agricultural Organisation (FAO) cautioned that speculators outside of the food industry pouring money into financial mechanisms in the commodity markets could be cause for concern.
Food industry players are increasingly turning to tools of the derivative markets, such as futures and options, to help manage risks linked to the volatility of commodity prices, noted the UN body.
A third issue underlying the rising food prices is the widening gap between demand and supply. The growing middle class in India, as in other emerging economies, is eating more, pushing up demand, while agricultural yield trails.
"Rising aspirations of the new middle classes in Bric countries (Brazil, Russia, India and China); changing food habits towards the Western diet of carbohydrates and sugar-added ready-to-eat foods etc as well as hedging positions by the farming community in agro futures... have all contributed to rising agro prices based purely on real demand", said an analyst of commodity futures markets.
The drought and its legacy — food insecurity — are here. Everybody is affected. The forecast in the immediate term is bleak but some long-term good may come out of the crisis if we use it to focus public and policy attention on long-neglected issues relating to farmers and farming.
Despite our economic success, we still lead the world in hunger. India has the highest number of stunted children below the age of five in the world. We can dismiss the drought as a temporary problem. We can argue that agriculture contributes less than 18 per cent to our gross domestic product and we have enough foreign exchange reserves to import food. Or we can trigger discussions and actions on rejuvenating agriculture and focus on new farm management techniques such as planting short-duration crops and crop mixing and new technologies which can help enhance crop yields right now.
The bottomline: this is in our self-interest. Stagnating or declining food production will not only affect middle class diets. It will impact the country’s social stability adversely.