Food prices drive inflation, the very same inflation based on which RBI Governor makes crucial fiscal decisions; the same inflation which affects profit margins of companies as it has ramifications on raw material prices and the very same inflation which affects the entire economy. So, if A=B and B=C, A=C. that’s the simple math which we were taught. Applying the very same math thus food prices =economy. And what affects food prices? Agriculture.
Agriculture is core to our very existence. In the years ahead, wars will be fought over food grains and water. If every country makes only steel, iron and automobiles, where will the food we eat come from? But at the very same time, our PM’s pet project, “Make in India” could suffer hugely if food inflation burgeons, impacting manufacturing.
Yesterday, the Govt approved increase in Minimum Support Price (MSP) for Rabi crops between Rs.35-400. These crops include wheat, gram, masur (lentils), beside others. New rates will be applicable for Rabi marketing season 2022-23. The Govt is hoping that along with higher MSP, National Mission on Edible Oils-Oil Palm (NMEO-OP) will help in increasing the domestic production of edible oils and reduce imports dependency.
Increasing agriculture production is important and that cannot be done by raising the MSP as it ultimately leads to overall inflation, with non-agri prices rising and then once again MSP getting hiked to keep in tune with the other prices. Thus a vicious cycle continues with no one gaining.
What it really, really needs to work seriously on is increasing production by resolving, firstly, land issues and then irrigating land adequately. When we are so dependent on vagaries on monsoon, clearly we are set for failure. Thus to get some control over this, we need to bring in more irrigation. Smaller land issues are not a problem if irrigated. In fact the Economic Advisory Council to the PM itself had put out a note stating that in East Asia, land holdings were much smaller than India but their share of irrigated land was much higher, which automatically gave them higher food security. But irrigation has become a huge cash cow for politicians in India and if questioned, they turn around and immediately play the card of being anti-farmer.
We might not yet have a crisis as such but given erratic climate conditions and more farm land being usurped for other realty ventures, there is no denying the fact that we are on the threshold of an impending food crisis.
So how to increase food production when we are at the mercy of the erratic weather and greedy politicians-cum-land sharks?
A few thoughts on the same:
- Increase genetic diversity – many varieties can be planted in the same field to bring down risk of crop failure and new varieties can be bred to maximize production or adapt to changing conditions.
- Bring more land under cultivation instead of diverting all towards industry
- Reduction in subsidies and increase in investments.
- Investment and efficiency in use of water are needed – irrigation and water management
- Even more easier access to farm credit
- Balance between producer prices and consumer prices by careful calibration of minimum support prices and import duties.
- More efficient food management practices in procurement, buffer stock and PDS. Surely major policy reforms are needed in this sector.
- Contract farming in India is not backed up by law and that needs to be tightened.
- Closing the gap between producer prices and consumer prices by eradicating the middlemen and linking them directly.
- India has made a report on adaptation to climate changes - National Action Plan on Climate Change. It is gathering dust and needs to be aired and adapted to ensure food security.
It is like this - You can read this report (or never go beyond the first para as it is an issue which does not concern or even interest you) and shrug your shoulders and say that the author is hyperventilating about an issue which is so irrelevant. But remember, today hunger is something which is experienced by the very poor and maybe, more so in Africa; as it is not at your doorstep you feel that it is irrelevant and does not concern you. Yes, you are right; you might never experience starvation but you will surely shell out more for the same food you are eating today and the sheer cost of food could eat away your savings. Maybe it is only then that one can understand the true impact of food security.