Farm reforms will dispel fears of global food inflation-Jan 27, 2012

Farm reforms will dispel fears of global food inflation

ET Bureau Jan 27, 2012, 05.04AM IST


When Unilever's global CEO Paul Polman says that the era of cheap food is over, he seems to be making sense. After all, for nearly 20 years now, India has been growing 6.7% on average every year; for 30 years, China's growth has averaged 10% every year. A lot of people now require more than subsistence needs. The growth of food production hasn't quite kept pace, because governments' priorities have been elsewhere.

So, Polman reckons that food prices will rise 2% to 3% every year. Yet, things might not be so dire after all. In India, a second green revolution is waiting for the right nudges to take off. The first made India self-sufficient in grains; now a grain mountain of over 50 million tonnes towers in government storage. The second green revolution will boost output and productivity of vegetables, fruit, meat, fish and milk.

States like UP, Bihar and Bengal have the capacity to be major producers, but lag a state like Punjab in productivity. Purposeful action here can change much for the better. Farmers need freedom from middlemen to respond to price signals: states should amend or scrap the Agricultural Produce Marketing Committee Act that legitimises middlemen in farm trade.

Farm storage and transport need a huge boost to smoothen out price cycles and cut wastage of vegetables and fruit. The rise of Africa will also help. Between 2007 and 2011, the economies of north, north-eastern and central African nations has grown between 5% and 9.8% as they've emerged from strife and instability. With functioning governments in place in many African nations, farm productivity , dismally poor earlier, will shoot up, bringing food to the tables of the world.

Egypt, Burkina Faso and South Africa have begun adopting hardy, high-yield genetically-modified crops. Six others nations are doing field tests, 14 have started contained research and around 27 are setting up R&D labs. Indian businessmen are travelling to Africa to start farm-related ventures. More than 200 years ago, Thomas Malthus issued a dire warning about humanity eating its way into oblivion. The forces that have proved him wrong again and again should prevail over Polman's dire vision.

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