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FOOD CRISIS-IMPACT ON INDIA (A STUDY)

Article Summary: Inflation is a buzzword not only in India but in many developed and developing nations today. Food crisis has added fuel to it. This article is an attempt to relate the world food problem to Indian Agricultural sector reforms. The interpretation is if we go for the deregulation of food price, open the sector to industry, allow for consolidation it will yield tremendous results towards higher productivity which is the most warranted solution to any market disequilibrium. Lastly India is poor but Indians are not is a proved theory through the success of economic and financial sector reforms. We shall prove it once again through Agricultural sector reforms.

FOOD CRISIS – IMPACT ON INDIA (A STUDY)

Food, shelter and clothing

The basic needs of human beings , among them if we prioritize food is the most essential.Can we imagine an India with world class luxuries but struggling to have a meal. It may soon happen if steps are not taken on war footing .Today if we try to analyze the food grain crisis turning out to be a universal problem we can unveil certain thought provoking facts.
Of total world population of 6.6 billion, rice is the staple food of about 3 billion people. This means change in prices of food grains will affect half of the people of the world. It is estimated according to United States Department of Agriculture that in 2007 the world grain production was 2075 million metric tones whereas consumption was 2098 million metric tones that means there was a shortage of 23 million metric tones.
The UN Food and Agriculture Organization ( FAO) expects the world’s population to grow to more than double in the next three decades which means that global food production must increase by 60 % to accommodate the estimated nutrition gaps.


Reasons for rise in price of rice worldwide

Increased demand from rapidly growing nations like China and India
The use of crops for bio fuels
Global stocks at 30 years low
Thailand, world’s largest exporter of rice will export 30% less rice in 2008
India, Indonesia and Vietnam the other leading exporters of rice impose measures to curb rice exports fearing domestic shortage
Market speculation, several countries are stock piling rice, wheat by aggressive imports due to fear of hike in prices


The case of India

India having 1.1 billion population by 2007 contributes 1/6th of the total world population, the impact of supply – demand mismatch will be profound on India if major steps are not taken to rectify.


Reasons for low Agricultural productivity in India

Comparing between India and China, India has a cultivable land of 182 million hectares and the production is of the range of 96 million tones whereas china is having a planting area of 85 million hectares with a production of 185 million tones. China produces 35% of the world’s rice with 20% of the planting area. The inference drawn is that India although ranked first in annual total planting area is suffering with severe productivity problems. Probably Agriculture has to be taken up as a planned business at the macro level.
The woes of Indian agriculture stems from the farm policy makers who struggle to keep Input prices low through subsidies, farm level prices high i.e. price for the farmer and consumer prices low by controlling the selling price. This is a vicious cycle into which the Indian Agriculture has been struggling to cope with since independence.
The best way to combat is by viewing it as an industry and bringing agriculture reforms

What are these and how to make it happen?

Did we ever dream of having 100 + channels to view, 30 + models of cars to choose, job melas, owning a house at the age of 27-28 in just 20 years back? It is happening and made possible by economic and financial sector reforms. In the Agriculture sector also we can expect dramatic changes with reforms. Building excessive production appears to be a good strategy in a fast growing economy at the macroeconomic level.

The proposed way-out

Reforms in internal trade in agricultural goods .Indian farmer must be liberated from the archaic controls and restrictions. Selling price should be based on supply-demand or market forces.
The essential Commodities Act should be amended so that state government can invoke it only in emergency situations to deal with scarcities of specific goods with the permission of the central govt.
The combined public-private investment in agriculture should be increased. Towards this end all restrictions on private investment in agriculture, irrigation, farm R&D and rural infrastructure development should be removed.
Public-private partnerships should be vigorously encouraged.
Serious steps should be taken to curb the urbanization of cultivable land. Recently
In West Bengal there was an issue on giving cultivable land to SEZ
Promotion of competitive and efficient Agricultural markets
To bring seed prices down seed production should be augmented
In order to overcome the problem of shrinking of landholdings of most Indian farmers, leasing in and leasing out of lands within farmers should be encouraged through appropriate legislative protection.
Contract farming which is virtual consolidation of land holdings should be encouraged with legal guarantees that the farmer does not loose land.
Every Industry has an association, an R&D supporting, helping the firms by giving demand supply projections, same should happen in agriculture.



VIEWING THE SECTOR AS AN INDUSTRY
ANALYSING THE PROBLEM FROM A MACROECONOMIC ANGLE
BRINGING ABOUT AGRICULTURE SECTOR REFORMS
COULD HAVE AS PROFOUND AN IMPACT AS THE LIMITED REFORM HAD ON THE REST OF THE ECONOMIC SECTORS


References:
http://oryza.com
http://jimdipeso.newsvine.com
http://www.guardian.co.uk
http://www.merinews.com
http://www.agbioworld.org
http://www.business-standard.com/320287/
www.business-standard.com

Article Source: http://www.upublish.info

About the Author:
indira dendukuri
References: http://oryza.com