Inflation: The Real Cause of Hunger

IN THE last decade or so India has made progress in tackling the hunger and malnutrition, but the latest global hunger index (GHI) report says that the situation is still very critical in the country. India ranks 66th on the 2008 GHI of 88 countries, a report released by the Washington-based International Food Policy Research Institute (IFPRI) said. India has secured 23.7 points in the index, which is down by 8.8 points from 1990. The index ranked countries on a 100-point scale, with zero being the best score having no hunger and 100 being the worst.

Food riots have broken out in many countries, as people struggle with the rising costs of basic food material. A silent tsunami, which knows no borders, is sweeping the world and India can face maximum trouble. Indian agriculture has been in crisis for many years and the country is now facing high inflation and rising food prices. Yet, our political leadership has not gone beyond pandering to political interests and has not done anything about reforming agriculture, increasing yields or improving storage facilities.

The nation has shown great economic progress, but GHI has asserted that India is lacking in fight against hunger. The index was based on three indicators namely, prevalence of child malnutrition, rates of child mortality and proportion of people, who are calorie deficient.

India has distinction of being home to largest number of hungry people. Not having enough to eat is a reality for half of India’s 1.1 billion people. The latest slump in the economy and ever rising prices of food items is leaving more and more people hungry. The large number of hungry people can be the hole in India’s growth story. The number of people living below poverty line decreased from 36 per cent to 27.5 per cent between 1993-2005, but then number can be deceptive. The people who crossed the BPL (below poverty line) are just above it and the inflation is hitting this chunk the most. This is similar to what World Bank said, “seven years worth of poverty alleviation,” could be reversed by rising prices.

The great development story of India could be reduced to zilch, if some immediate and visionary measures are not taken. India so far has failed to recognise the gravity of the problem and solutions for the same. While the broader economy has averaged close to nine per cent growth annually over the past four years, agriculture has been growing just over two per cent a year. Architect of the green revolution in India, MS Swaminathan has put the situation very clearly. He says, “We are paying the price for complacency and for not paying adequate attention to either technology or public policy.

Agriculture hasn’t received the investment it requires, considering nearly two-thirds of our population depends on crops, animal husbandry, fisheries, forestry and agro-processing for their livelihood. The recommendations of the National Commission on Farmers are crying for attention.”

It is this area that is a blind spot. Domestic policies of agriculture do not address the long-term problem of food security. The result of these policies has been that the country, which was self-sufficient in food, had to import nearly 7.5 million tones of wheat during 2006 and 2007.

The imports were made at substantially higher prices than paid to Indian farmers, giving rise to the criticism. Moreover, the high-price imported wheat also added to the subsidy bill. Paying higher prices for imports, even as domestic farmers are given a minimum price barely enough to recover costs, is certainly not justified. It is clear that the government has to focus on the supply side. For this, a great change in thinking is required. However, whether the current lot of politicians can do it is quite doubtful.

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