“I don’t think there’s a crisis now,” said T. Nanda Kumar, the country’s food secretary, who is responsible for formulating food security policy in the world’s second-most populous nation. “Food will be available.”
Farmers from Australia to China have increased planting of wheat, corn, rice and soybeans, helping stockpiles gain from 30-year lows.
An end to the crisis may help countries including India and Egypt ease trade barriers and cool inflation that threatened to stoke social unrest.
The global production outlook for wheat and soybeans is “very good,” while rice is still expensive, Kumar said in an interview in New Delhi August 18.
“Rice is softening, but I don’t think it has softened adequately.”
Still, grain prices will remain higher than the average of the past five years even as production improves, he said.
Soaring food and energy prices increased the number of hungry people by about 50 million last year, according to the United Nations’ Food and Agriculture Organization.
The food shortage spurred strikes in Argentina, riots in Cameroon, Burkina Faso, Morocco and Ivory Coast, and a crackdown on illicit exports in Pakistan and the Philippines.
The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials more than tripled in the past six years as global demand led by China outpaced supplies of crops and metals.
Price drop
Commodity prices slumped since July 3 as the dollar gained 6.8 percent against a gauge of six
major currencies in the past month and crude oil fell 22 percent from its record reducing the attraction of bio-fuels made from grains and sugar cane.
Rice has tumbled 29 percent from its record, while wheat and corn have dropped 35 percent and 26 percent from their peaks.
India, the second-biggest producer of rice and wheat, may need a second “green revolution” to meet food demand driven by rising incomes among its 1.1 billion people, Kumar said.
Monkombu Sambasivan Swaminathan, the 83-year-old agriculture scientist who spearheaded India’s first “green revolution” in the 1960s that made the country self-sufficient in food, has said the solution to higher farm output lies in providing better remuneration to growers.
“You may call it by any name, what we need is more food,” said Kumar.
India needs to increase its wheat and rice production by 3.5 million tons every year to meet its growing demand and cover emergencies, he said.
Supply shortfall
Supplies of farm products have not kept pace with demand from consumers who have become richer in the past five years as India’s economy registered the fastest economic expansion in its 60 years since independence.
The economy averaged 8.7 percent growth since 2003, the fastest pace after China among the world’s biggest economies.
“We’re trying to increase productivity in some areas by at least 50 percent,” using water management, seeds and fertilizers, Kumar said.
Production of grains such as rice, wheat and lentils has increased just 10 percent since 2000.
Food grain harvests rose to a record 230.7 million tons in the year ended June 30 from 209.8 million tons in 2000, according to the farm ministry.
Source: Bloomberg |
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