Food crisis: Is the world ganging up against India?

Is the world ganging up against us? It seems so, if you read between the lines of statements made by the US president and officials in the recent past. First, US president George W Bush dropped the bomb by saying that India’s increasing food consumption is the reason for the world food crisis. Then cam his secretary of state Condoleezza Rice’s remarks supporting Bush’s statement.

Even though India countered this argument pointing out that the US’s race for biofuel is the cause for the food crisis, the Americans are not ready to digest that. Now, US Under Secretary of Commerce for International Trade Christopher A Padilla has come out against India, saying that the export ban on several commodities by New Delhi will harm its South Asian neighbours and drive up prices rattling the international markets.

In a strong criticism of India’s handling of the food crisis, the US said: “Indian government’s decision to impose certain export bans on non-Basmati rice and edible oils has rattled international market. We can only adequately address this crisis if we discourage continued use of export controls that will harm India’s neighbours and drive up world food prices.”

The US official said while export bans are designed to increase short-term food security, imposing restrictions will make the situation worse.

“Export restrictions take food off the global market, drive prices higher, and discourage farmers from responding to market forces and investing in future production,” he further added.

The world’s largest producers of agricultural goods — the US and India — should refrain from the use of export quotas as it will only exacerbate food shortages and inflate prices.

India is the second largest rice producer in the world, the third largest wheat producer, and the seventh largest corn producer.

India used to provide up to one-sixth of world exports of rice. But after the new export curbs, it will export only around 1 million tonnes of Basmati rice this year.

According to analysts, the reduction is certain to contribute to the rising world prices.

After the US attack came the UN salvo against India. In a recent report, the Food and Agriculture Organisation (FAO) had warned that prices would stay high unless the export curbs are eased. The FAO said: “The pressure would considerably ease if India, which is about to harvest a bumper 2007 secondary crop, would relax its current export curbs.”

Then another global giant in food research, the International Food Policy Research Institute, said that the countries with export curbs are following ‘starve your neighbour’ policies.

Besides the US, there are several other countries which have asked India to lift ban on foodgrain export.

Fearing a global backlash against India, the Centre is also taking steps to check the bad press.

Food and agriculture minister Sharad Pawar had last week said he does not want to continue with the export restrictions once domestic prices ease on better supply.

However, India is yet to lift ban on export of agri commodities. India’s concerns are different. It is facing a 45-month high inflation of 8.24 per cent now. To add to that the country will go to polls in this year. This has caused immense pressure on the present government to control domestic prices of several essential commodities.

During the regime of NDA government, prices had soared and the BJP-led coalition lost the election due to the rising prices. This time around, the Congress-led government is facing the same problem. The finance ministry and the prime minister are desperately trying to rein in the prices, but, as the FM said, the government can do precious little in case of crude oil prices, which may touch $150 per barrel by the time of America’s Independence Day on July 4.

Even while facing criticism of the world, Indian government put up a brave face, saying that India’s ban on food export has hardly anything to do with the crisis. It blamed the US’s blind run for the biofuel, especially ethanol from corn, for the situation.

However, it seems, the world is not listening to India.