The impending food crisis in India

The not so good monsoon in India, has pushed India into an impending food crisis. Not just India, but other developing and underdeveloped economies are also worried about the food crisis that may lead to food war in several countries. The world food prices have been climbing in most parts of the world despite a slowdown and saw a surge in 2008. The United Nations has pointed out that unlike previous price rise which were mainly driven by food shortages, the price spike came in 2008 when the world's farmers reaped a record grain crop. In countries like India, the food price hike draws more concern because the population spends a considerable part of their income on food and any increase affects them more than their developed countries counterpart.

Main reasons for global food prices hike in 2008

The main reason for global food crisis in 2008 has been contributed to increased use of food crops land for biofuel cultivation thus reducing the land available for food crops. George Bush also pointed out in 2008 that another main reason is increasing consumer demand in countries like India and China because of their prosperity. I also read an interesting article where it was mentioned that increasing non vegetarianism is also responsible for increased demand of food grains because more foodgrains are required to breed the cattle than the same proportion required for directly feeding the human beings. Also, the increased energy costs in 2008, led to increased transportation costs further fuelling price hike.

Current food situation in India

After enjoying a reliable monsoon for the past few years, this time the rain gods have decided to give a hard time to India. The country is facing drought like situation in many Northern and Eastern parts like North Gujarat, UP. And simultaneously is also facing floods in Western Gujarat, North Bihar etc. The rainfall is deficient in almost two third of the country and the Prime Minister has now called for an emergency meeting to stem the price rise. The impact of poor monsoon is that the entire paddy growing belt of West Bengal, Andhra Pradesh, UP, Bihar, Punjab, Chhattisgarh and Haryana has received either scanty or deficient rainfall or their maybe an impending shortfall of the Indian staple diet of rice and wheat.

The step that government is taking to stem this rise has also taken the form of a political debate. The state governments are vying with one another for drought assistance from Central government. The opposition party, BJP, has pointed out that, “In recent years 1.83 tons of wheat, 3.95 lakh tons of rice, 22,000 tons of paddy and a huge no of tonnes of maize was wasted or damaged in the various godowns of the Food Corporation of India (FCI)." Agricultural Minister Sharad Pawar has pegged this loss at 20% of the total turnover of FCI. This is a big amount to be wasted in the year of poor agriculture output.

The Impact of food crisis

Poor agricultural growth will not only increase food prices, but also slowdown the economic recovery of India. India is dependent on the rural market for taking its GDP to a growth trajectory and a poor crop will reduce the purchasing power in the hands of farmer which form a considerable part of the India’s population. Also, the contribution of agricultural industry to India’s GDP is substantial and any dip in it will bring down the overall GDP growth of India. Also, an increased household budget will give the Indian consumer decreased purchasing power as most of the income will be spent on food items. If the government doesn’t take necessary steps to deal with India’s dependency on monsoon in short term and long term, it will hamper India’s growth both in the current slowdown and in the long haul.