The Americans say that wheat production in India will fall because the total area under wheat in UP, MP, Rajasthan and Bihar (all lesser producers of wheat than Punjab and Haryana) has gone down by 5 lakh hectares due to poor soil moisture and higher temperatures during sowing.
Union Agriculture Minister, Sharad Pawar is optimistic that foodgrain production would reach a record level this year. His ministry officials have just revised the production estimates to 219.32 million tonnes, up from the previous estimate of 217.28 MT. Despite his optimism there are some worrying aspects on the food front with prospects of wheat shortage looming large, helped by fast rising international market price of wheat and many other commodities that constitute the basket of staple diet.
In the past 12 months, wheat prices have almost doubled. The spectre of food riots worries many poor countries where food bills have already risen by more than 33 percent. The African continent, already hit by lots of serious conflicts, may be paying more than $33 billion for cereal import by the end of this year's summer even though the actual quantity they import may fall. The governments in food deficient states are devising ways to absorb the blow from rocketing grain prices.
The UN's Food and Agricultural Organisation has been warning that 37 countries across the globe- though most (21) in the African continent--are heading for a 'food crisis'. An equally grim foreboding has come from another UN body, the World Food Programme, which said that insufficient funds might force it to cut rations that feed the needy in many countries. And WFP has to meet the needs of a greater number of people who are being hit by the increasing prices of food and oil.
Lower outputs in most traditional grain baskets of the world heighten fears of hunger hitting the poor. Grain shortages do have political consequences. In neighbouring Pakistan the troubles for the country's President were compounded by an outcry over shortage of wheat that was getting worse by the week.
Sharad Pawar's optimism on the food front stems from his faith on the projected 4 percent annual growth of the agricultural sector in the eleventh Plan. Is that realistic? May be. But by his own admission, lot of ground work will be necessary to achieve that target. Modern technology has to be brought to the door-step of farmers; the agriculture sector will require more investment; the support systems will have to improve; the subsidy policy may have to be redesigned and the marginal farmers will have to be assured easy access to credit and skills. The list is long.
The US agriculture department has assessed that India will have to import about two million tonnes of wheat in 2008-09 as the buffer stocks are likely to fall below four million tonnes. Any setback in wheat crop at this stage will decidedly see a sharp rise in prices, perhaps by 50 percent. The Americans say that wheat production in India will fall because the total area under wheat in UP, Madhya Pradesh, Rajasthan and Bihar (all lesser producers of wheat than Punjab and Haryana) has gone down by 5 lakh hectares due to poor soil moisture and higher temperatures during sowing.
Sharad Pawar has claimed that the government can maintain adequate wheat supplies for the below poverty line consumers at subsidised rates though he himself was not sure if the same could be said about the needs of the above poverty line consumers. Take into account the fact that a lot of wheat and other ration commodities supplied at BPL/PDS outlets are almost routinely diverted for sale in the open, the market that caters to the so-called above poverty line consumers. It is also worth nothing that the demand at PDS has been growing constantly.
According to government statistics grain production in the country has gone up by 5 percent in the last five years. That would have been more reassuring if population growth in the same period had also been 5 percent or less; but it was 8 percent. The green revolution of the 1960s has been in urgent need of being followed by a newer version.
Shortage of wheat or any other commodity is usually met by imports. For the past two years the country has been importing wheat, no matter how big or small the quantity. This year's estimate of wheat output is a record 76 million tonnes, according to Sharad Pawar. (It was 76.37 MT in 1999-2000). But this figure will be nearer reality if procurement from farmers is on expected lines. The government has already contracted for import of 1.8 million tonnes of wheat this year.
Import of wheat has not been without its problems. In 2006 the government had tendered for import of 2.6 million tonnes wheat and in 2007 it nearly doubled. The quality of wheat imported from Australia in 2006 was questionable. Its high levels of impurities risked the safety of consumers. The imported wheat was reportedly unable to meet the safety levels under the Prevention of Food Adulteration Act.
Had the worldwide wheat and other grain production been in abundance there would have been no problem in switching to sources which can supply safe or at least wheat that is less impure. But the decline in wheat production is a global phenomenon. Big suppliers like Argentine, Australia and Russia all have been reporting a decline in their output because of drought or other climate related problems. When the output falls the quantity available for export also falls; some countries ban exports. A comparatively smaller wheat producer like Kazakhstan has joined Russia and Argentina in banning exports even as wheat prices reached a record of $24 a bushel from about $10 a bushel in December 2007.
In the US, the wheat inventories have fallen to their lowest levels in 60 years. North China, which used to be the country's main wheat basket, has been hit by drought, as is Australia, a country that sells nearly half its total wheat crop in the international market. Climate change is damaging crops everywhere. The demand from the nascent bio-fuel industry is also blamed, as is the rising living standards in countries like China. Apparently, the demand for grain has also gone up to feed the livestock.
It may all be seen as a vicious circle of demand and supply. But the end result is spiralling prices of wheat and other food grains. There is need to tackle many problems here. But the world's food needs cannot be neglected.
Tukoji R Pandit, Syndicate Features
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