Misguided agricultural policies may boost India's short-term food output but may transform India into a food importer in the longer term.
The overproduction of grains in India has rapidly depleted underground aquifers and sharply reduced soil fertility.
Sound food policy should be a priority for India, on track for the world’s largest population by 2025. India has also achieved status as a major food exporter with rice, wheat and buffalo beef. Indian policies emphasize minimum support prices for farmers and subsidized crops for the poor, but these in turn spur food inflation, price volatility, overproduction of grains and overworked land. The government purchases about one third of all cereal output, yet pro-cereal policies hinder production of non-cereals like fruits, vegetables and dairy products, which benefits other export nations like Canada or Australia. Despite misgivings by economists, a food security bill guaranteeing low prices for more than two thirds of India’s population is winding its way through parliament. “The end result of these policies will be India’s forced integration into global agricultural markets, not only as a grain importer, but also as a leading buyer of non-cereal commodities,” explains Deepak Gopinath, director of a research service on emerging markets. Global markets won’t provide special pricing for India’s poor.
India’s newfound position as leading food exporter will be short-lived, however. Government policies that prioritize the production of rice and wheat and a new right-to-food law that’s now before the parliament will not increase food security. Instead, policies will drive food inflation, accelerate India’s transformation into a net grain importer and increase its dependency on global markets for non-cereal foods. India will be forced into the global food marketplace and not on its own terms.
The government’s commitment to open-ended purchases of wheat and rice at ever-higher MSPs has led to a cycle of ever-increasing procurement. The government buys approximately one-third of total cereal production. This also contributes to food inflation. Elevated MSPs and state taxes keep private traders out of the grain market and discourage high stock levels. So open market availability of wheat and rice falls after the end of the procurement season – thus boosting prices. Wheat and rice prices rose 23 percent and 10 percent year on year, respectively, through November 2012, even as the country was exporting.
High levels of procurement have resulted in rapid accumulation of grain stocks, now 66 million tons, more than double the required buffer. To place this in perspective, India’s wheat stocks are equivalent to Australia’s entire annual production of the grain, while its stocks of rice are 50 percent more than Thailand’s yearly output.
The level of stocks far exceeds the government’s storage capacity and results in significant wastage. The government has estimated preventable post-harvest losses of food grain at about 20 million tons per year, equivalent to 10 percent of total production. Faced with excess stocks and need to make room for the next harvest, the government is forced to resort to exports.
Those exports, and the entire cycle of events making them necessary, are unsustainable. India’s breadbasket states are reaching the limits of productive capacity. The overproduction of grains due to ever-rising MSPs has rapidly depleted underground aquifers and sharply reduced soil fertility. With the government concentrating procurement activities and agricultural investment in terms of capital, fertilizers and infrastructure in northern and western states, productivity in the country’s eastern states, primarily rain-fed, has stagnated despite attempts to raise yields. The government will have no alternative but to increasingly depend on international markets when output in the major grain-producing states starts to lag demand.
Perversely, the government’s planned National Food Security Bill will only accelerate this process. The bill creates a right to food for two-thirds of India’s 1.2 billion people and requires the government to distribute heavily subsidized food grain on a massive scale.
Malnutrition, Stunted Growth and Reduced IQ from Poor Health in India
A report form the Indian Ministry of Statistics and Programme Implementation from 2012 Children in India indicated that 48 per cent children under the age of five are stunted (too short for their age), which indicates that half of the country's children are chronically malnourished.
40 per cent of the children do not complete their vaccination cycle. In terms of immunisation, 62 per cent male children between 12-23 months received full immunisation in 2011. In contrast, 8 per cent children never received any vaccination.
Malnutrition and lack of key micronutrients can result in drops in IQ of 10-20 points.
SOURCES- Yale, India Today, IEET
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