The Food Chain - In Fertile India, Population Has Outstripped Agriculture

The Food Chain - In Fertile India, Population Has Outstripped Agriculture - Series -

With the right technology and policies, India could help feed the world. Instead, it can barely feed itself. India’s supply of arable land is second only to that of the United States, its economy is one of the fastest growing in the world, and its industrial innovation is legendary. But when it comes to agriculture, its output lags far behind potential. For some staples, India must turn to already stretched international markets, exacerbating a global food crisis.
I was discussing this with a classmate a few days ago and we were talking about how, if India could produce more food, it can actually diversify its strengths and become a truly global powerhouse and increase its per capita income much quicker than it has managed so far.

Agriculture in India is still stuck in the socialist mindset - and sometime I think, rightly so - but in order to leverage India's resources, this must change. OVer 60% farmers in India (according to the 1991 census) have an average landholding size of under 1 hectare and less than 5% farmers have a landholding more than 5 hectares (World Bank report). This seriously limits the opportunity to 'industrialise' agriculture on an individual basis and we will probably have to (and already do in some parts) approach agriculture as a collective enterprise, i.e. the government funds a tractor or combine harvestor for a group of farmers rather than each one buying one, which will be impossibly expensive and uneconomical.

On the other hand, farmers can only sell their produce to the government, at pre-decided prices - there is some privatisation but that (to my knowledge) sits with the collection, distribution and payments mechanism rather than with the ownership of the whole process. There are probably a few exceptions, perhaps for coffee, tea or tobacco, but for staple food crops, this seems to be the system generally in place.

Now, unless private players, or rather private capital, can come in and consolidate the agriculture industry, it will be difficult to either increase yields, or help farmers out of poverty.

With Reliance Fresh and the proposed initiative by Bharti (along with Wal-Mart), some of this could change, i.e Indian farmers may now have an alternative market and this could lead to better prices, or at least investment, for many of them. Of course, introducing private players does add to risk, in terms guaranteed payments and that is crucial to the hundreds of millions of farmers. Even a slight disruption, or delay in payments, could render several million homeless and poor and push them to the brink of starvation.

This is certainly one of the major challenges India faces if it is to grow beyond what its traditional industry and services backbone will allow.

This of course, is not helped by the fact that agricultural subsidies remain at high levels in the EU and in the US - and the limitations this places on world food trade, especially with regard to countries like India that continue to block (or highly restrict) food imports. For India, allowing food imports is an eventuality as is the the ultimate reduction and elimination of food subsidies in the west, but challenges will remain unless the agricultural sector itself is reorganised and adapted to withstand fluctuations that free market forces will bring.

Until that happens, unfortunately, I do not think there is going to a clear resolution to the world food crisis that continues.