Many historians now claim that it is an apocryphal story, but the myth endures. Confronted with a shortage of bread among the peasantry over 200 years ago, French Queen Marie Antoinette reportedly said: “If they have no bread, then let them eat cake.” Faced with global food shortages, modern day rulers cannot afford to be so callous and cavalier. Now, as global food prices show some signs of cooling, India seems to have ridden out the roughest patch and many experts believe that the worst is over. “India has managed to avoid the worst in terms of food inflation,” says Ashok Gulati, Director (Asia), International Food Policy Research Institute (IFPRI). He points out that food inflation in India is probably a third of the rate prevailing anywhere else in the world. Also, he points out, inflation has had no effect on the issue price at Public Distribution System outlets, which serve large swathes of the poor.
Hence, one needs more durable responses that affect the long-term prospects for Indian agriculture. The solution, therefore, is really to go back to the basics—improve yield per hectare and focus on building efficiencies in the supply chain.
And those responses will necessarily have to include responses to new risks such as climate change and rapidly rising energy prices.
The latter can completely throw out of gear India’s fertiliser policy and muddy the price signals to the farmer. Fertiliser subsidies, estimated at almost Rs 60,650 crore for 2008-09, have almost quadrupled over the last four years. No wonder, the government’s deficit is swelling.
The recent amplification of the ban on futures trading to include four new agri-commodities is another example of sending confused signals to the farmer, who has to respond with appropriate supplies.
Hence, while the immediate trigger for long-term change in the agriculture sector may wane somewhat if prices ease, it should hardly be a reason to turn attention away from the sector. It is time to focus full time on agriculture. The government should use this crisis as a wake-up call.
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