Food problem in India

Inflation has reached record levels in India as a result of rising food prices. Wholesale prices rose 7.41 per cent in the week ending 29 March over a year before, the highest rise in more than three years, the Ministry of Commerce and Industry said in New Delhi today, but the jump was even greater for food. The situation has put the Indian government in a dilemma because it has to contain inflation to protect consumers purchasing power and at the same time favour the development of the service sector and industry. Experts do not expect the central bank to raise the cash reserve ratio, which has already been done five times since December 2006, for fear of its impact on development. Instead the government might control prices of steel and cement, essential for further growth. The central bank plans to sell 230 billion rupees (US$ 5.8 billion) of bonds and bills this week, including 90 billion rupees of securities to drain excess money from the banking system. Fears of inflations have prompted the government to scrap import tax on edible oils and maize as well and

ban exports of (non-basmati) rice (basic staple for 65 per cent of the population) and pulses. But any action seems more and more difficult because the problem is increasingly global. Whatever is done experts expect the price of rice and cereals to rise, partly because Asian government have favoured industrial and service sector development at the expense of agriculture. The impact is visible to all. In New Delhi for instance the cost of rice jumped 33 per cent (from 12 rupees or 29 US cents a kilo to 16 rupees or 39 cents) in the last two months. At the time of independence, India had to face a huge food crisis. The section that obviously suffered the most was the poor due to the problem of inadequacy of food grains. In 1943, in Bengal there was a huge famine which resulted in the death of millions of people out of starvation. The partition of India further added problems in the aspect of food, in the point of view of quantitative inadequacy, qualitative deficiency and poverty. The issues of food security had been a problem in India since the 1960s. Due to severe droughts, the agricultural system had completely broken down. There

were major fluctuations in the food grain prices due to low productivity. There was an urgent need to increase the per capita availability of food grains at an affordable price. Food security can be described as the provision of minimum amount of food grains required for fulfilling the consumption needs of a family at a fair price. The supple of food grains in India was lower than the demand which led to quantitative inadequacy. Therefore we had to import food grains. India imported 3.1 millions tonnes of wheat and 0.19 million tonnes of rice from the USA in the late 50s. The food eaten by most Indians lacks the necessary vitamins, proteins and minerals. Therefore, efficiency of the working people is affected. Especially the poor sections of the population suffer from malnutrition and have weak health. Most of the poor people have very little purchasing power, even though the supply of food grains met the demand of people, the poor still could not fully satisfy their needs. The causes for the food problem can be divided into demand and supply factors. The first demand factor is rapid growth in population. Due to the population explosion, it makes it difficult to

meet the demands of food grains. An increase in the population means more hungry people. The second point is high income elasticity of demand. This refers to the measure of income- elasticity of demand for food grains. As the per capita income of most of the people in India remains at a low level, with an increase in per capita income over the years, the demand for food grains has also increased to a great extent. Supply of food grains has not also kept up with the rapidly increasing demand. The first reason for this could be described as the slow growth rate of food grain production. Even though there has been an increase in the production of food grains, the rate of growth of food grain has declined by 2-3%. One of the main reasons for slow growth in food grain production during the 90s is the lack of any significant breakthrough in seed technology, mainly pulses and coarse cereals. Fluctuations in food grain production are a large aspect of the topic as well. In Indian agriculture one cannot be very sure of the rainfall. We have gone through droughts to rainstorms, which prove that due to the weather it creates more trouble to the food problem in India.

A large amount of food grains are wasted every year due to the attack of rats, locusts and insects, which leads to 15% of the food grain being destroyed. Inadequate marketing facilities, greater consumption demand of farmers and so on is described as low marketed surplus. Farmers have been holding a large amount of their total food grain output than is actually required to meet their satisfaction. At times, storage of food grains by the traders also creates artificial problems of food grains in the market, this is called speculative hoarding. The Union Ministry of Consumer Affairs, Food & Public Distribution constituted this High Level Committee for formulating a Long-term Grain Policy for the country on the 17th of November 2000.

The principal objectives of this system were as follows: -To control the price fluctuations of food grains. -To protect the interests of both consumers and poor farmers -To maintain price stability through the creation of buffer stocks.

-To reduce personal and regional inequality in the distribution of food grains. -To control the monopoly power of private traders in the food grains market. -To socialise the marketable surplus of food grains. Therefore, while there is need to produce adequate food grains domestically, supplementing with imports whenever required, it is also necessary to look at the food grain distribution network. The Public Distribution System (PDS) in the country facilitates the supply of food grains to the poor at a subsidised price. However doubts have been raised about the efficiency and costeffectiveness of the PDS especially in the light of the growing food subsidy and food stocks. The PDS needs to be restructured and there is a need to explore the possibility of introducing innovative ideas such as smart cards, food credit/debit cards, food stamps and decentralized procurement, to eliminate hunger and make food available to the poor wherever they may be in cost-effective manner. In my opinion, I think there are many flaws in the system and it should be overlooked. If corruption and inefficiency were wiped out, we wouldnt have any problem at all.