Global Food Crisis
Posted on April 28, 2008 in Business and Finance by Shewli
The food crisis has triggered riots in Zimbabwe, Argentina, Haiti, Cameroon, Indonesia and Egypt. The price of rice has shot high because of short supply. The supply ran short of demand because of high oil prices, bad weather and lesser land being allocated for production of food products. Amidst such crisis, the exporting countries will stop exporting and start conserving for domestic sonsumption.
Surging prices are hitting the poor so hard that in Liberia people are changing their life long habits for survival. Liberia imports 90% of its rice from Asia and US. Now they are switching over to cheaper staple food like spaghetti.
The prices of soybeans, wheat and corn have been rising too. As all over the world more and more lands have been allocated for production of biofuels with the expectation of supplementing fuel shortage.
In India the prices of oil and lentils have shot up but till now no such incident of riot has been reported.
In India the rising oil and food prices have caused inflation. The inflation rate is around 7%. The prices of oil and lentils have seen a sharp surge. Agricultural production in India is almost the same as it was in 1970. Producers are planting less because the cost of fertilizers is soaring. The land quality is poor and added to that poor transport, inadequate tools and inadequate power supply. Without adequate investment small farmers are not able to produce more.
The growth that India is experiencing is in the manufacturing and services sector. The present scenario calls special attention to investment in agriculture. Agriculture has been neglected for quite a long time.
Besides purchasing capacity of India’s poor is so low that even slight changes in price hit them hard because their real income is too less.
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