Post by Paddy by Grace on Feb 10, 2010 12:28:18 GMT -7
Food crisis worsens as agricultural output fails to keep up with demand
www.ft.com/cms/s/0/86d6533e-15e3-11df-b65b-00144feab49a.html?nclick_check=1
At New Delhi's Bhogal Market, pushcarts are piled high with fresh fruit and vegetables, and small shops are lined with burlap sacks filled with lentils. But for 40-year-old Jamilla Khan, who has to feed three hungry teenagers on the Rs5,000 ($107, €78, £69) her husband earns each month as a driver, such foods are rare treats.
As lentil prices have tripled over the past two years, the family has gone from eating 10kg of pulses a month to only two or three. Their consumption of vegetables and meat - which have also shot up in price - has plunged, too. Many of their meals consist only of rotis, a flatbread, and spicy pickle.
"The kids say, 'I want milk; I want ghee', but how can I buy it for them?" Mrs Khan asks.
Policymakers have long considered broad-based growth as the way to fight India's problems of poverty, hunger and malnutrition. But while the economy has grown, agricultural production has stagnated.
That has led to rocketing prices for nutritious foods. So while Indians with links to the new economy eat better than ever, many urban working-class families, who spend up to 55 per cent of their household budgets on food, are being squeezed.
"The price of food is the most serious political issue facing the government of India today," says Manpreet Singh Badal, finance minister of northern Punjab, often called the granary of India. "We have . . . food sitting in our warehouses but that is only rice and wheat. India is malnourished. We need something more than rice and wheat."
Spiralling food prices have provoked debate about whether the Reserve Bank of India will be forced to raise interest rates to try to cool the economy. Already the bank has begun to exit its loose monetary policy by raising banks' reserve needs.
But P.K. Joshi, director of the National Academy of Agricultural Research Management, says the underlying issue can be addressed only by helping India's farmers. "Incomes are increasing and people can afford to eat more but the increase in supply is less than the rate of increase in demand," he says. "Naturally prices will increase." Lentils are the main protein source in India, where many are vegetarians. India consumes about 18m tonnes of pulses a year.
Yet India's pulse production was 15m tonnes in 2008, and its productivity is below global averages. New Delhi has been bridging the shortfall with imports.
With the food crisis deepening, Pratibha Patil, India's president, recently called for a "second green revolution" which would boost farmers' yields and incomes with improved seeds, better water management and more scientific agronomic techniques. But many question whether New Delhi has the will for the large-scale investment and reforms.
"This crisis has been festering for so many years," says Ajay Jakhar, chairman of the Bharat Krishak Samaj, or Indian Farmers' Forum.
India's 1970s-era green revolution, which introduced high-yielding seeds for rice and wheat, transformed India from heavy dependence on imported grains to being a rice exporter.
While the country's rice and wheat yields are still low by global standards, the government has accumulated large grain stocks to help it cope with seasonal shortfalls. Yet New Delhi has never intervened in the pulse market.
Without the state as a buyer, and with a lack of organised retailers, pulse farmers have no leverage with private traders.
"The pulse market has not been properly regulated. Money has been minted by the traders and the farmers' returns keep shrinking," says Ayan Bhattacharya, head of research at AgriWatch, an independent research organisation.
India's failure to boost its pulse yields could send global prices spiralling. This year, global sugar prices hit a 29-year high owing to the collapse of India's domestic sugar production.
www.ft.com/cms/s/0/86d6533e-15e3-11df-b65b-00144feab49a.html?nclick_check=1
At New Delhi's Bhogal Market, pushcarts are piled high with fresh fruit and vegetables, and small shops are lined with burlap sacks filled with lentils. But for 40-year-old Jamilla Khan, who has to feed three hungry teenagers on the Rs5,000 ($107, €78, £69) her husband earns each month as a driver, such foods are rare treats.
As lentil prices have tripled over the past two years, the family has gone from eating 10kg of pulses a month to only two or three. Their consumption of vegetables and meat - which have also shot up in price - has plunged, too. Many of their meals consist only of rotis, a flatbread, and spicy pickle.
"The kids say, 'I want milk; I want ghee', but how can I buy it for them?" Mrs Khan asks.
Policymakers have long considered broad-based growth as the way to fight India's problems of poverty, hunger and malnutrition. But while the economy has grown, agricultural production has stagnated.
That has led to rocketing prices for nutritious foods. So while Indians with links to the new economy eat better than ever, many urban working-class families, who spend up to 55 per cent of their household budgets on food, are being squeezed.
"The price of food is the most serious political issue facing the government of India today," says Manpreet Singh Badal, finance minister of northern Punjab, often called the granary of India. "We have . . . food sitting in our warehouses but that is only rice and wheat. India is malnourished. We need something more than rice and wheat."
Spiralling food prices have provoked debate about whether the Reserve Bank of India will be forced to raise interest rates to try to cool the economy. Already the bank has begun to exit its loose monetary policy by raising banks' reserve needs.
But P.K. Joshi, director of the National Academy of Agricultural Research Management, says the underlying issue can be addressed only by helping India's farmers. "Incomes are increasing and people can afford to eat more but the increase in supply is less than the rate of increase in demand," he says. "Naturally prices will increase." Lentils are the main protein source in India, where many are vegetarians. India consumes about 18m tonnes of pulses a year.
Yet India's pulse production was 15m tonnes in 2008, and its productivity is below global averages. New Delhi has been bridging the shortfall with imports.
With the food crisis deepening, Pratibha Patil, India's president, recently called for a "second green revolution" which would boost farmers' yields and incomes with improved seeds, better water management and more scientific agronomic techniques. But many question whether New Delhi has the will for the large-scale investment and reforms.
"This crisis has been festering for so many years," says Ajay Jakhar, chairman of the Bharat Krishak Samaj, or Indian Farmers' Forum.
India's 1970s-era green revolution, which introduced high-yielding seeds for rice and wheat, transformed India from heavy dependence on imported grains to being a rice exporter.
While the country's rice and wheat yields are still low by global standards, the government has accumulated large grain stocks to help it cope with seasonal shortfalls. Yet New Delhi has never intervened in the pulse market.
Without the state as a buyer, and with a lack of organised retailers, pulse farmers have no leverage with private traders.
"The pulse market has not been properly regulated. Money has been minted by the traders and the farmers' returns keep shrinking," says Ayan Bhattacharya, head of research at AgriWatch, an independent research organisation.
India's failure to boost its pulse yields could send global prices spiralling. This year, global sugar prices hit a 29-year high owing to the collapse of India's domestic sugar production.