The food crisis and the culprits

The food crisis made George Bush and Condoleeza Rice mad.  They went to the extreme of accusing China and India with regard to being the major contributors towards the spiraling global food crisis.  

I feel that the criticism about India and china as the main culprits of food crisis world over has mainly emerged from George Bush’s intention to make a face saving effort with regard to the economic slow down which he had doctored through the Iraq invasion and various other factors.  Three Trillion dollars were spent in Iraq war towards an estimated $50 billion dollars (nearly six times more) as also sacrificed so many worthy lives.  Still Iraq is trailing under horror, causality and worst condition of poverty.  George Bush should know that the people of India have the right to eat and live better through their hard earned money. 

Though India accounts for a sixth of the world population, India is estimated to have consumed 9.37 per cent of world cereals in 2007-08 against 9.36 per cent in the previous year.  China’s share has come down from 18.53 to 18.48 percent.  On the other hand the share of US has gone up from 13.46 per cent in 2006-07 to 14.74 percent in 2007-08.   See the reality.

In the current times, India is in the forefront of growth dynamics.  Sandra Dawson, KPMG Professor of Management Studies, Cambridge said in conversation with Business Standard that “If you are interested in management, business and industry, and you see that the dominant sources of capital, perhaps ideas, and certainly people are going to be in India and China, it would be impossible not to be interested in that”.

Americans are suffering on the jobs front too. Those who are employed are working fewer hours for less pay. Some sectors are paralyzed by unemployment. There are some pockets where the jobless rate of young African-Americans is 80 percent or higher.

It is a fact that protests over increasing food prices have erupted across the developing world, and the stability of governments from Senegal to the Philippines is threatened. 

Let’s examine a few important concerns.

Some kinds of fertilizer have nearly tripled in price in the last year, keeping farmers from buying all they need. That is one of many factors contributing to a rise in food prices that, according to the United Nations’ World Food Program, threatens to push tens of millions of poor people into malnutrition.

Overall global consumption of fertilizer increased by an estimated 31 percent from 1996 to 2008, driven by a 56 percent increase in developing countries, according to the International Fertilizer Industry Association.

In India, for instance, the government’s subsidy bill could be as high as $22 billion in the coming year, up from $4 billion in 2004-5.  Once new supplies become available, the rising use of fertilizer will still pose difficulties. In India, the cost of subsidizing fertilizer for farmers has soared. Agriculture and development experts say the world has few alternatives to its growing dependence on fertilizer. As population increases and a rising global middle class demands more food, fertilizer is among the most effective strategies to increase crop yields.

The rising global demand for bio-fuels is also a culprit for global food crisis.  Various reports have now come into public view that it is not that the rising demand for food in China and India that has caused prices to spiral, it has been caused by the rising demand for bio-fuels across the world. Huge quantities of corn and oil seeds have been used to produce bio-fuels.  About 30 million tones of corn were used in US to produce bio-fuels last year. 

Just think over who are the real culprits.

The prices of wheat and soybeans have doubled. There have already been food riots in several countries, including Haiti, Egypt and Somalia, with fears of more to come.

The developing world needs to develop its own ability to feed itself and not to blame the countries like India and China, which are on the path of sustained growth. Let’s hope for the best.