First, the food facts

  • 06/05/2008

  • Financial Express (New Delhi)

Let's be logical and not emotional about food. From ill-informed outsiders' point of view, it seems reasonable to blame rising prices on fast-growing demand in India and China. After all, these two facts are known: prices are rising globally, and the two Asian giants are the world's fastest growing economies. Plus, every school kid knows that prices go up if demand outpaces supply. Food, everyone knows, grows slowly. Presto! Join the dots, and you have an "explanation' for food inflation. But the global food Economy is not so simply analysed. Yes, developing countries are voracious food importers today. They account for more than three-fourths of the global imports of rice, wheat and vegetable oil, and almost two-thirds that of coarse cereals. This translates to annual average imports of 84 million tonnes of wheat, 72 million tonnes of coarse cereals, 27 million tonnes of vegetable oils and 25 million tonnes of rice. The numbers sound large. But this consumption is on a tiny base compared to developed countries that seem so annoyed. OECD countries, which account for only around 18% of the world population, consume 50% of all the coarse grain, 34% of all wheat and 39% of oilseeds. Global trade figures in the first half of the decade, meanwhile, show that China's share of total imports of bulk food products like wheat and coffee was only 8.4%, while India's figure barely touched 1%. In contrast, Japan's share of such imports was 10% and the EU's was 19%. In the case of semi-processed agriculture produce, the share of Indian and Chinese imports was roughly about the same as the 10.5% share of the US and just half of the 21% share of the EU countries. Indians may be eating more wholesome meals. Some members of the larger-than-America's "middle class' may even be growing obese. But Indian imports have made no impact on world prices of food. This is not to shrug off the current world food crisis. But immediate solutions lie in rethinking such measures as diversion of food to biofuels production, as happens in the US. Also, comfortably off developed countries divert 56% of their cereals to feed livestock. In the US, 61% of all cereals are fed to livestock. True, poorer countries need to work on farm productivity. But why grudge their growing food imports?