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    South Asia
     Jul 21, 2006
India grows a grain crisis
By Raja M

MUMBAI - The Indian economy, cruising smartly at an 8.4% annual growth rate - second-fastest after China - suffered a worrying bump with a food-grain shortage that led to the government confirming plans this month to import more than 3 million tons of wheat.

With a global tender, India began its wheat-importing process for the first time in six years, prompting leading agri-scientists such as Professor M S Swaminathan to express concerns about India's future food security. The genial, balding Swaminathan, called the father of India's "Green Revolution" and included in a Time magazine list of the 20 most influential 20th-century Asians, attributed the disquieting situation to decreasing agricultural

productivity in the past 10 years.

Amid chest-thumping about the current buoyant gross domestic product, the grain shortfall ought to fan serious anxiety about India's future self-sufficiency for a billion-plus population. India's decreased attention to agriculture has already cost a few thousand lives of farmers committing suicide and contributed to the previous government being knocked out of power. The current coalition government has not impressed many with its agricultural policies either.

"One percent of India's 8% growth comes from agriculture," one of India's top economists, Pai Panandikar, told Asia Times Online. "We were complacent with buffer stocks of about 60 million tons, which were soon exhausted because of highly subsidized anti-poverty government schemes - and other mismanagement, including poor storage facilities. Buffer stocks are down now to 18 million tons."

India's granaries are likely to be emptier with more farmers shifting to more profitable cash crops. Worse, Swaminathan, chairman of the National Farmers Commission, quoting surveys, said nearly 40% of farmers want to move out of agriculture.

Panandikar, heading the New Delhi-based economic think-tank the RPG Foundation, is among those baffled that the situation is not ringing alarm bells as loudly as it should. The RPG Foundation in its April "State of Business" monthly report observed: "Both in respect of rice and wheat, stocks are 2 million tons each below the minimum buffer stock that was planned."

India's growing food-grain woes reflect a global problem of urban-centric economies neglecting the sustaining rural base. The Economic and Social Department of the United Nations' Food and Agriculture Organization (FAO) in its latest Food Outlook analysis called the current global wheat-market situation "volatile".

For reasons ranging from climate to bad economics, the US Department of Agriculture (USDA) in its crop report last month said the current world grain harvest of 1.984 trillion tonnes dropped by 24 million tons from the 2005 harvest, and dipped 3% from a historical high of 2.044 trillion tons in 2004.

The grain downfall comes amid greedier consumption, a growing global population and growing life spans. The world's farmers have to feed an additional 70 million people every year, or over a million more people a week, with the population growth mostly concentrated in the South Asian subcontinent and sub-Saharan Africa, home to most of the world's hungry people.

The Indian government has allowed private firms for the first time to import wheat, but the import move itself has met with expected grumbles. The government is paying US$21.3 per quintal for the imported wheat, while the domestic farmers have only been paid $15. Government-owned trading majors such as MMTC Ltd (2005-06 turnover $343 million) announced plans to float new wheat import tenders, if it gets a good response to its 50,000-ton tender that closed this Monday.

Agriculture Minister Sharad Pawar deflected criticism of lopsided import prices. "It's wrong to allege that we are favoring foreign companies. The amount of money spent on transporting wheat from one part of India to another is huge and makes up for this difference in costs," he said, an argument not many are buying.

Economists such as Panandikar dismiss moves to import food grains as being "impractical" because of higher import costs, made possibly higher with tougher shipping and contract regulations. Panandikar advocates more long-term solutions to boost productivity, such as wider use of bio-technologies and better water management such as rainwater harvesting of India's ample monsoon to battle chronic water problems farmers face.

The water shortage looks to be a graver problem. "Water tables are now falling and wells are going dry in countries that contain half the world's people, including the big three grain producers - China, India, and the United States," reports the London-based Earth Policy Institute. "In China, water shortages have helped lower the wheat harvest from its peak of 123 million tons in 1997 to below 100 million tons in recent years.

"Water shortages are also making it more difficult for farmers in India to expand their grain harvest. In parts of the United States, such as the Texas panhandle and in western Oklahoma and Kansas, depletion of the Ogallala aquifer has forced farmers to return to lower-yield dry-land farming." The US has already reported poor wheat harvests from its breadbasket states of Kansas, Texas and Oklahoma.

This month, the Indian government-owned State Trading Corp identified five potential suppliers, Toepfer, Concordia, Glencore, ADM and Cargill, after relaxing many quality standards relating to moisture content, fungi and fumigation, from an earlier tender in May that did not interest many suppliers.

India beat the import and the handout phase in the 1970s, after high-yielding varieties of grain helped bring in the Green Revolution when India's food production raced ahead of the population boom. But now the country obviously needs a "Greener Revolution" to meet its increasing consumption demands, and more poverty-targeted programs like Mission 2007: Hunger Free India, by the Chennai-based MS Swaminathan Research Foundation.

Mission 2007 included setting up a Technical Resource Center for Food Security and a study on "hunger hot spots" in the Asia-Pacific region. The foundation quotes Mahatma Gandhi saying bread is God for the hungry. The neglected grain god now demands more devoted cultivation.

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