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LATEST NEWS UPDATES | Food crisis – how prepared is India? by Saurab Bhat

Food crisis – how prepared is India? by Saurab Bhat

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published Published on Jul 6, 2010   modified Modified on Jul 6, 2010

The recent spike in world food prices has further widened the gap between the developed and the developing economies. While, over 70 per cent of the world's population resides in poor countries, it has access to less than 40 per cent of the world's resources such as water, irrigated land, power, etc. This is a result of inconsistent economic progress (post-colonialisation birth pangs), rampant population growth and distractions such as internal conflicts and neighbourly tensions. Over the last 300-400 years, developing countries in South Asia and Africa experienced high population growth supported by fertile plains of large river basins. However, in recent years, there is large-scale de-silting and exhaustion of soil regenerative capabilities, leading to lower production.

Certain prominent leaders and economists have placed the responsibility of rising world food prices on China and India. The West, with its declining birth rate, is fairly self-sufficient in food and can withstand these shocks better than developing countries. Hence, there has been no concerted effort till date, to improve the food price scenario other than mere rhetoric at G8/G20 summits. According to the latest report on UN Millennium Development Goals, India would have reduced its poverty rate from 51 per cent in 1991 to under 25 per cent by 2015 and over 180 million would move out of the BPL category. While that's a commendable milestone, it, however, brings with it, the challenges of increasing per capita food and calorie intake and, hence, greater food demand and prospects of higher food inflation.

Water Shortages

India's inability to moderate population growth has led to social tensions, economic distortions, low per capita food grain availability and environmental degradation. As a result of continuous man-nature conflicts, the per capita food grain and water availability in India is about one-third of the world average. In the past, India severely neglected its water resources and ignored ground water re-generation. There has also been a gradual reduction in the water flow of the Himalayan rivers as a result of depleting glaciers. This is compounded by the phenomenon of rampant use of ground water for construction and industrial use without focus on harvesting, leading to over-dependence on monsoon. However, in the last decade, the Government has tried to address the issue through several initiatives such as subsidies for micro-irrigation (which optimises water usage for agriculture), national watershed development project for rainfed areas, artificial recharge to ground water through dug wells in hard rock areas and rural water supply enhancement programme through the catchment area approach.

There is need for more focused implementation of these schemes as also forward action on the national river linking project which was proposed a few years ago. Optimal management of this critical national resource will be the key to managing food security.

A Huge Opportunity for agriculture

Farming is no longer a preferred profession in India, especially among the new generation, due to high degree of uncertainty in income contributed by fragmented land holding, high monsoon dependence along with low irrigation, limited access to affordable credit, low productivity due to outdated techniques and migration of farm labour to cities. Fragmented land holdings also mean unviable mechanisation and lower productivity. The poor returns from farmlands coupled with rampant industrialisation and soaring real estate prices have led to diversion of productive land. Government's MSP policy which kick-started the green revolution has in some cases led to surplus cultivation of certain agri-commodities such as wheat , rice and sugarcane in Uttar Pradesh/Maharashtra leading to wastages.

Agricultural infrastructure neglect (which leads to large wastages) has been exacerbated by the Centre-State conflicts, and severe resource crunch faced by the State Governments.

The Central Government is aware of the challenges and has initiated several policy initiatives such as Seeds Bill (increase seed replacement and boost exports), Amendments to the APMC Act (promote investments in agri-marketing infrastructure), Nutrient-based Subsidy Policy (to incentivise the farmers to go for balanced fertiliser application and ensure soil regeneration), National Horticulture Mission and the National Food Security Mission (which aims at widening the food basket and improving productivity – early results already indicate gains of >25 per cent in many districts). These initiatives need to be implemented vigorously, as the agriculture sector has a huge potential which can be unlocked to ensure long-termfood security.

India-China – The Current Scenario

Like India, China faces an equally daunting task with pressure on its per capita agri-resources. On the population front, China seems to be in a better position as its total fertility rate (TFR) is already below the replacement rate, whereas India would achieve a TFR of 2 only by 2050. China, as an authoritarian state, is perceived to be able to respond to a crisis in a military-like discipline unlike a democratic India – with its quasi federal structure, linguistic divide and coalition compulsions. However, it has been proved beyond doubt that a thriving and vibrant democracy such as India has been able to prevent famine-like situations post-independence mainly due to the periodic ballot process. The democratic process also has ensured that political parties have tilted towards the doctrine of economic reforms with a human face and schemes such as NREGA have taken shape and been implemented to the benefit of the bottom of the pyramid. Nevertheless, the democratic process needs to be enhanced through decentralised decision making, and increased cooperation between the Centre and the State Governments to implement the policies and reforms in agriculture.

Conclusion

India's democracy is a major asset in terms of the policies favouring equitable economic growth. However, to achieve that objective in the near term (2020), we need some structural changes in the economy, stabilisation of our population growth and de-centralised policy making.

Continued food price rise amidst sustained population growth, could lead to pockets of civil unrest and separatist movements which could threaten our national solidarity. Hence, coordinated efforts on war footing are necessary. We need efforts on R&D to increase productivity, increase irrigated land share and promote farm mechanisation and land reforms.

India needs greater autonomy to the State Governments to optimise resources for higher productivity. Since marketing of agri-produce is in State's policy domain, we need coordinated contract manufacturing and procurement laws between various states to incentivise farmers. Much greater focus should be accorded to cold chain infrastructure to reduce wastage in the food supply chain.

We need serious steps to achieve the TFR target of < 2 which would need mass level education, and incentive-based programmes.

(The author is Group Executive Vice-President & Country Head – Development Banking, YES Bank)

The Hindu Business Line, 5 July, 2010, http://www.thehindubusinessline.com/2010/07/05/stories/2010070550431100.htm


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