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Rising Food Prices Hurt India's Poor

  • Anjana Pasricha

Food prices in India have climbed sharply in the past year in keeping with a worldwide trend. As Anjana Pasricha reports from New Delhi, the soaring cost of food is hurting tens of millions of people who earn meager wages despite the country's growing economy.

Kavita works as a housemaid in an affluent suburb of Delhi. She and her husband, who is a daily wage carpenter, earn approximately $150 a month.

Two years ago their wages would buy enough rice, lentils, vegetables and milk for the young couple and their one-year-old baby.

But, like millions of poor families, Kavita is struggling to cope with a 30 to 50 percent rise in the prices of these basic foods.

Kavita says spending on food eats into nearly two-thirds of the family's income. She says prices are too high for her meager budget.

Experts say food price increases in India are part of a global trend. A recent report by the Food and Agriculture Organization estimates that food prices surged last year by nearly 40 percent.

The higher prices are bad news for a country where nearly one-third of its 1.1 billion population lives on less than a dollar a day.

Poor people, like Kavita, have only one answer: less food on the table, especially for adults.

Kavita says she tries to ensure that there is enough nutritious food for her three-year-old daughter, but that often means she and her husband make do with less.

Agriculture experts say there are many reasons for the steadily rising food prices.

But the main factor is that India no longer grows enough food to feed its population, as it did for decades.

It faces stagnating agricultural production on the one hand, and growing demand on the other. The affluent sections of its population want more meat, which is boosting demand for grain to feed livestock.

The result: India started importing wheat two years ago. India is also the world's second largest importer of edible oils.

A farm policy analyst in New Delhi, Devinder Sharma, says growing demand from countries like India is pushing prices up.

"When countries like India start importing food, then the world prices zoom," said Sharma. "If India and China are both turning into bigger importers, shifting from food self-sufficiency as recently we have seen in India, then the global prices are definitely going to rise still further, which will mean the era of cheaper food has now definitely gone away."

But as the era of cheaper food passes, many are questioning how the poor will cope. For decades, the Indian government has distributed subsidized food, buying farm surpluses of wheat and rice, and selling them to poor people at prices well below those in the market.

Although the program has been criticized for inefficiency and corruption, it does help many families in dire need.

But economist D.H. Pai Paninidiker, who heads New Delhi's RPG Goenka Foundation, says food subsidies are unlikely to be increased to help more people.

For one, the government is under pressure to cut its fiscal deficit by reducing subsidies.

Moreover, Panindiker says the excess grain in government warehouses that is distributed to the poor has dwindled.

"At one time, we used to have very large buffer stocks, and those stocks have come down drastically," said Panindiker. "Now the possibility of expanding that scheme to reach more people is almost out of question, because there are just no stocks available."

Experts say the answer for countries like India is simple: more investment in agriculture to increase crop productivity.

Farm analyst Sharma says the government must restore the emphasis on food self-sufficiency that was seen in the 1970s.

He says the small farmers who dominate the countryside must be given improved access to seeds, fertilizer, and other materials.

"The answer actually lies in going for natural farming systems, organic farming systems which reduces the cost of production for farmers, makes agriculture land highly sustainable, and then also makes it economically viable for farmers to cultivate. We have enough wisdom to reverse the wheel to see that we can make agriculture profitable for small farmers also," said Sharma.

But experts warn it could be many years before farm productivity improves. Until then, the plight of poor people could worsen in India, where malnutrition already afflicts nearly half the children under five.

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