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Food Crisis
<b>Making a killing from hunger</b>

<!--QuoteBegin-->QUOTE<!--QuoteEBegin-->For years the World Bank and the IMF have told countries that a liberalised market would provide the most efficient system for producing and distributing food, yet today the world’s poorest countries are forced into an intense bidding war against speculators and traders, who are having a field day. Hedge funds and other sources of hot money are pouring billions of dollars into commodities to escape sliding stock markets and the credit crunch, putting food stocks further out of poor people’s reach.[8]<!--QuoteEnd--><!--QuoteEEnd-->
<!--QuoteBegin-Mudy+May 3 2008, 10:39 AM-->QUOTE(Mudy @ May 3 2008, 10:39 AM)<!--QuoteEBegin--><!--QuoteBegin--><div class='quotetop'>QUOTE<!--QuoteEBegin--><b>India explodes against food amBush </b>
Pioneer News Service | New Delhi 

I just don't get it, why Indian minister is making personal attack on Bush. This is stupidity of highest order. These morons don't know protocol.
They should have used US policy or Bush Administration policy.

This is known as provoking and Indian govt and MPs fell for it.
It is to get the ruling class worked up and to create a rift in the nuke deal so that India backs out first
I expect ministers, who represnt country to follow up diplomatic protocol or diplomatic language.
If I call name it is OK but country offical representive should not.
GOP will be back in power, McCain will continue same policy.
<!--emo&:ind--><img src='style_emoticons/<#EMO_DIR#>/india.gif' border='0' style='vertical-align:middle' alt='india.gif' /><!--endemo--> Food in mouth problem
Jaithirth Rao
Posted online: Wednesday, May 07, 2008 at 2219 hrs Print Email
Understand the Indian farmer, only then can you have the luxury of railing against American presidents

Jaithirth Rao
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Caste by another nameTwo cheers for democracyThat old market for votesFollow every pug markConservatism's centre

President Bush in his irrepressible way spoke out about the Indian middle class emerging as meaningful consumers and hence being at least partly responsible for the global rise in prices. This has come in handy for xenophobic politicians in our country (and we have many of those) crying themselves hoarse. Can diverting attention to imaginary foreign bullies help our government in dealing with the public clamour about prices of food-grains? It is always easier to blame others rather than face up to our own shortcomings. No government likes to see a rise in food prices. The Roman Emperor Diocletian discovered centuries ago that high food prices can be hazardous even to the unshakeable imperial throne. He experimented with price controls and as is inevitable when you ignore the rudimentary laws of economics, he failed. High prices overall are rarely an outcome of supply-side problems; inflation is always and everywhere a monetary phenomenon.

If we have global inflation today, it is because Mr Greenspan kept pumping up the money supply too much and for too long. He tried among other things to help President Bush fight a war without bearing its fiscal consequences. When money grows too fast, prices rise just as night must follow day. His successor, the intelligent and well-meaning Bernanke, has been forced to continue with easy money in order to save the financial system and prevent a Depression like that of the ’30s or a decade of de-growth as Japan has witnessed in recent times. The net result is that the inflation genie is out of its post-Volckerian bottle. The dollar is weak, aggravating the seeming price rise of commodities where international prices are quoted in dollars. As an aside, inflation is not that high in euro or Swiss franc terms. Despite our trading patterns (largely dollar-denominated), the monetary authorities in India have in fact reduced the dollar’s impact by strengthening the rupee quite a bit. But there is a limit to which they can hold inflation.

The real question to ask is not whether there is high inflation, but whether relative prices of wheat and rice have changed. Here it seems to me that the data is not clear at all. Measured in ounces of gold or in barrels of oil or in ingots of steel or in bags of cement (as distinct from in dollars or rupees) we may not have any significant increase in the price of rice or wheat. When the analysis is complete (in twelve months from now — late as with all economic analyses) it may turn out that neither is the Indian Middle Class Consumer nor the US Bio-fuels Producer responsible for anything more than a lot of verbiage in the press.

However, going beyond the money illusion caused by the unstoppable printing presses of the Federal Reserve, if in fact there has been a change in the relative price of rice and wheat (which is probably modest at best) it is worth looking into seriously, not with the foolishness and irresponsibility that one has come to associate with the current set of political leaders in India. It was the venerable statesman C. Subramanian who went by his intuition (contrary to the beliefs of World Bank dummies) that the Indian farmer was not stupid. The Indian farmer was an optimiser in a world of great uncertainty and risk. On average he may have received prices that covered his costs and gave him a fair return. But the “average” hid many risks. In years of glut, the Indian farmer had no insurance cover for his returns. This insight was the origin of the minimum support price and the procurement policies that kicked off the Green Revolution. The intelligent Punjabi farmer, once assured of a price, was able to plan better and produce more.

We constantly keep saying that we are a nation of farmers and that agriculture is our backbone. Why then are we not happy if in fact the relative price of rice is up as compared to steel or oil? Why are we banning the export of rice and flooding the country with duty-free food items to the detriment of our patriotic kisaans? Why are we not praising Bush instead of berating him?

The answer is simple — the welfare measures of our “socialistic” state have failed. While some farmers may benefit from high rice prices, all urban classes are hurt and our state is mortally scared of them just as Diocletian was! It must be pointed out that the Roman Empire and Victorian England were more advanced in dealing with issues of the welfare of the poor than we are. We spend tonnes of money, primarily for the benefit of contractors, bureaucrats and politicians — not for the benefit of the poor. For a country with the levels of privation that we have, we don’t even have public soup-kitchens or their equivalents through public-community-private partnership deals. All we have is monumental theft from the poorly executed PDS. And of course most of our agricultural welfare expenditure is marked not for the benefit of farmers or the poor, but the barons of the Fertiliser and Pesticide industries. We subsidise them and keep prices low resulting in overuse of these items which in turn causes untold ecological damage. The only intelligent programme in recent times was that launched by Jayalalithaa in Tamil Nadu where she encouraged temples and dargahs to provide free meals to the poor and encouraged well-to-do devotees to pay for them. She leveraged traditional beliefs and institutions in an imaginative way.[SIZE=7][COLOR=green]Jai Lalithe!

Let us not once more fall into the trap of feeling good by criticising the “foreign hand” of Bush or anyone else. We have issues in Indian agriculture, but we are doing our best to hurt farmers. We have issues regarding the complete absence of the welfare measures we need to protect the vulnerable sections of our population. Let us fix these self-inflicted problems of ours. We will then have plenty of time to tilt at windmills foreign and homegrown.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Overused seeds major impediment in increasing productivity: Farmers </b>
Priti Bajaj | New Delhi
The UPA Government may claim to take all possible steps to check sale of sub-standard agricultural inputs like seeds, fertilisers, insecticides etc., yet poor quality seeds continue to hit farm productivity. The farmers' associations have asked the Government to replace the existing lot of 'overused' seeds.<b> Even the seed industry has claimed the Government could have served the farmers better by providing them quality seeds and rather than going in for a massive Rs 60,000-crore loan waiver. </b>
Agricultural experts said infrastructure status to seed industry would encourage investment in modernisation of seed processing plants which in turn would improve the farm produce helping farmers increase their income. Seeds are a key input and determinant of crop productivity, and improved seed quality alone can contribute about 25 per cent of yield.

According to farmers, usage of sub-standard and spurious seeds have resulted in stagnation of yields and various national and international commissions appointed for development of agriculture, including MS Swaminathan Report, have suggested 100 per cent seed replacement to enable to provide food security. In fact farmers' organisations have sought additional budget allotment be made for provision of certified seed for all agriculture holdings in the country.

Farmers and the seed industry players have called for the creation of a dedicated Seed and Technology Development Fund, which would have been a clear signal to global and domestic industry to invest in agriculture for the betterment of Indian farmers, RK Sinha, executive director, All India Crop Biotech Association (AICBA) said.

"A dedicated Seed Technology and Development Fund would have worked well for the long-term benefit of the farmer, industry and the economy," he added.

<b>While the Agriculture Ministry estimates show, the total availability of quality seeds in India during 2005-06 was 140.51 lakh quintals as against the requirement of 107.08 lakh quintals. The availability of quality seeds for the year 2006-07 is 148.18 lakh quintals as against the requirement of 128.76 lakh quintals. </b>

Seed characteristics such as germination, high seedling vigor, and genetic purity are as important as other inputs. Thus, while inputs such fertilisers and water are important, the crucial input for increasing productivity is superior quality seed through the use of superior technologies.

Although the Indian seed market is one of the largest, it is almost exclusively supplied by locally produced seeds. Farmers retain seed of major food crops (wheat, rice, sorghum, millet, corn, and pulses) and commercial crops for many years, and the largest volume of seed trade involves local exchanges of established self-pollinating varieties. The seed replacement rate in most crops is very low, with the exception of cotton and some vegetables. The use of hybrid seeds is mostly confined to cotton, and to some extent to corn, millet, sunflower, and few vegetables.
<b>72 percent of India's fruit, vegetable produce goes waste</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->New Delhi, May 12 (IANS) About 72 percent of the fruit and vegetable production in India goes waste because of lack of proper retailing and adequate storage capacity, an agriculture ministry official said here Monday.

P.K. Mishra, secretary in the ministry's department of agriculture and co-operation, said so while was speaking at a Fruit and Vegetable Summit organised by Confederation of Indian Industry (CII).

'The production of vegetables in India is next only to China. The vegetable and fruit production contributes more than 30 percent of the agriculture GDP. The crop diversification has led to rise in horticulture production, which has reached 185.2 billion tonnes last year,' Mishra pointed out.

<b>Rice prices rising despite record world crop</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->MILAN (Reuters) - World rice production will hit a record high this year but increasing demand and restrictions on exports will keep prices high, the United Nations Food and Agriculture Organisation said on Monday.

Global prices of staple foods have risen more than 40 percent in the last year causing shortages, hoarding and riots in some developing countries.

Rice prices have soared this year, and with world stocks at their lowest since the early 1980s governments and importers have scrambled to stock up amid fears of shortages
Another proof, price is based on perception not on actual shortage, same is with oil price.
<img src='http://graphics8.nytimes.com/images/2008/05/13/business/20080514_FOOD_GRAPHIC.gif' border='0' alt='user posted image' />
[quote=Mudy,May 12 2008, 08:13 PM]
<b>72 percent of India's fruit, vegetable produce goes waste</b>[quote]
Like this, there was an article in Houston Chronicle, a few yrs back which in nutshell was:
The amount of food wasted in USA is all the food reqd by world's hungry people.
From the rice paddies of Asia to the wheat fields of Australia, the soaring price of food is breaking the budgets of the poor and raising the spectres of hunger and unrest, experts warn.

A billion people in Asia are seriously affected by the surging costs of daily staples such as rice and bread, the director general of the Asian Development Bank, Rajat Nag, has said.

"This includes roughly about 600 million people who live on just <b>under a dollar a day, which is the definition of poverty[/U</b>], and another 400 million who are just above that borderline," he said.

Globally, the World Bank last month estimated that 33 countries were threatened with political and social unrest because of the skyrocketing costs of food and energy.

India's top farm scientist and architect of the 1960s "Green Revolution," M S Swaminathan, has said <b>India needs a second agricultural revolution </b>to boost food supplies or face huge social turmoil.

Across Asia, workers made a campaign against high food prices their May Day battle cry last Thursday in marches through cities including the capitals of Indonesia, the Philippines and Thailand.

While the demonstrations were mainly peaceful, concern is growing over the potential for political instability and unrest if high prices persist.

"Once people get hungry they start also getting quite desperate and take desperate measures," Damien Kingsbury of Australia's Deakin University said.

Experts blame the high food prices on a confluence of factors, including increased demand from a changing diet in Asia, droughts, the rising use of crops for biofuels, and growing energy and fertiliser costs.

In Australia, which usually ranks second after the United States as a global wheat exporter, several years of drought cut harvests to just 13 million tonnes last year from an average of 22 million tonn

So while consumers are struggling, Australian farmers are not getting rich on the backs of the poor, said National Farmers Federation chief executive Ben Fargher.

"It's been the worst drought in our history and many, many farming families are under significant financial and emotional stress and it will take our communities a long time to recover," he said.

And even in a relatively prosperous country like Australia, people are feeling the squeeze in the supermarkets, prompting the government to launch an inquiry into how to stem rising grocery prices.

The UNDP has projected that if the growing trend of people in ASIA spending 50% of their income on food continues then the clock will be reset on poverty alleviation by 10 years and millions will die due to starvation and malnutrition in Asia and Africa alone by 2008-9

<span style='color:red'>[U]<b>This is a wake up call for all of us.</b>

We have to take to serious consideration for the improvement of Indian farmers and how agriculture works in India .We have to promote urgently

a)Organic farming – promote aggressively and bring this concept under as many land area as possible with traditional farming practices.

b) Kitchen farming – to create self sustaining nutritional food substitutes

c) Fight against hoarding of food grains.

d) Microfinance privileges – relieve farmers from debts urgently and finance them adequately.Stop the trend of mass suicides by farmers.

e) Second green revolution -Do everything that is possible to support usher in the revolution.

Give a big helping hand to our famers NOW so that we can tide over the food crisis that is likely to worsen in the coming months and save millions of lives while there is still time .</span>
The real reason why oil prices are rising

M R Venkatesh

By now it is becoming too obvious that the United States is playing the oil game all over again. And this is the desperate gamble of a country whose economy is neck deep in trouble.

Given this scenario, managing prices of oil is central to the US economic architecture. Expectedly, this gamble has been played in a great alliance between the US government, US financial sector and the media.

I have earlier written about:
The impending collapse of the US dollar on account of the inherent weakness in the US economy caused by its structural weakness as reflected in the sub-prime crisis;
The repeated softening of the interest rates in the US that has the potency to kill the US dollar; and
How the fall in the US dollar suits the US corporate sector, especially its omnipotent financial sector.

Naturally, since the past few years, the US financial sector has begun to turn its attention from currency and stock markets to commodity markets. According to The Economist, about $260 billion has been invested into the commodity market -- up nearly 20 times from what it was in 2003.

Coinciding with a weak dollar and this speculative interest of the US financial sector, prices of commodities have soared globally.

And most of these investments are bets placed by hedge and pension funds, always on the lookout for risky but high-yielding investments. What is indeed interesting to note here is that unlike margin requirements for stocks which are as high as 50 per cent in many markets, the margin requirements for commodities is a mere 5-7 per cent.

This implies that with an outlay of a mere $260 billion these speculators would be able to take positions of approximately $5 trillion -- yes, $5 trillion! -- in the futures markets. It is estimated that half of these are bets placed on oil.
Oil price hike: Govt can't save you: PM

Readers may note that oil is internationally traded in New York and London and denominated in US dollar only. Naturally, it has been opined by experts that since the advent of oil futures, oil prices are no longer controlled by OPEC (Organization of Petroleum Exporting Countries). Rather, it is now done by Wall Street.

This tectonic shift in the determination of international oil prices from the hands of producers to the hands of speculators is crucial to understanding the oil price rise.

Today's oil prices are believed to be determined by the four Anglo-American financial companies-turned-oil traders, viz., Goldman Sachs, Citigroup, J P Morgan Chase, and Morgan Stanley. It is only they who have any idea about who is entering into oil futures or derivative contracts. It is also they who are placing bets on oil prices and in the process ensuring that the prices of oil futures go up by the day.

But how does the increase in the price of this oil in the futures market determine the prices of oil in the spot markets? Crucially, does speculation in oil influence and determine the prices of oil in the spot markets?

Answering these questions as to whether speculation has supercharged the demand for oil The Economist, in its recent issue, states: 'But that is plain wrong. Such speculators do not own real oil. Every barrel they buy in the futures markets they sell back again before the contract ends. That may raise the price of 'paper barrels,' but not of the black stuff refiners turn into petrol. It is true that high futures prices could lead someone to hoard oil today in the hope of a higher price tomorrow. But inventories are not especially full just now and there are few signs of hoarding.'

On both counts -- that speculation in oil is not pushing up oil prices, as well as on the issue of the build-up of inventories -- the venerable Economist is wrong.

The finding of US Senate Committee in 2006

In June 2006, when the oil price in the futures markets was about $60 a barrel, a Senate Committee in the US probed the role of market speculation in oil and gas prices. The report points out that large purchase of crude oil futures contracts by speculators has, in effect, created additional demand for oil and in the process driven up the future prices of oil.

The report further stated that it was 'difficult to quantify the effect of speculation on prices,' but concluded that 'there is substantial evidence that the large amount of speculation in the current market has significantly increased prices.'

The report further estimated that speculative purchases of oil futures had added as much as $20-25 per barrel to the then prevailing price of $60 per barrel. In today's prices of approximately $130 per barrel, this means that approximately $100 per barrel could be attributed to speculation!

But the report found a serious loophole in the US regulation of oil derivatives trading, which according to experts could allow even a 'herd of elephants to walk to through it.' The report pointed out that US energy futures were traded on regulated exchanges within the US and subjected to extensive oversight by the Commodities Future Trading Commission (CFTC) -- the US regulator for commodity futures market.

In recent years, the report however pointed out to the tremendous growth in the trading of contracts which were traded on unregulated OTC (over-the-counter) electronic markets. Interestingly, the report pointed out that the trading of energy commodities by large firms on OTC electronic exchanges was exempted from CFTC oversight by a provision inserted at the behest of Enron into the Commodity Futures Modernization Act in 2000.

The report concludes that consequential impact on account of lack of market oversight has been 'substantial.'

NYMEX (New York Mercantile Exchange) traders are required to keep records of all trades and report large trades to the CFTC enabling it to gauge the extent of speculation in the markets and to detect, prevent, and prosecute price manipulation. In contrast, however, traders on unregulated OTC electronic exchanges are not required to keep records or file any information with the CFTC as these trades are exempt from its oversight.

Consequently, as there is no monitoring of such trading by the oversight body, the committee believes that it allows speculators to indulge in price manipulation.

Finally, the report concludes that to a certain extent, whether or not any level of speculation is 'excessive' lies entirely in the eye of the beholder. In the absence of data, however, it is impossible to begin the analysis or engage in an informed debate over whether our energy markets are functioning properly or are in the midst of a speculative bubble.

That was two years back. And much water has flown in the Mississippi since then.

The link to the spot markets

Now to answer the second leg of the question: how speculators are able to translate the future prices into spot prices.

The answer to this question is fairly simple. After all, oil price is highly inelastic -- i.e. even a substantial increase in price does not alter the consumption pattern. No wonder, a mere 3-4 per cent annual global growth has translated into more than a 40 per cent annual increase in prices for the past three or four years.

But there is more to it. One may note that the world supply and demand is evenly matched at about 85 million barrels every day. Only if supplies exceed demand by a substantial margin can any downward pressure on oil prices be created. In contrast, if someone with deep pockets picks up even a small quantity of oil, it dramatically alters the delicate global demand-supply gap, creating enormous upward pressure on prices.

What is interesting to note is that the US strategic oil reserves were at approximately 350 million barrels for a decade till 2006. However, for the past year and a half these reserves have doubled to more than 700 million barrels. Naturally, this build-up of strategic oil reserves by the US (of 350 million barrels) is adding enormous pressure on the oil demand and consequently its prices.

Do the oil speculators know of this reserves build-up by the US and are indulging in rampant speculation? Are they acting in tandem with the US government? Worse still, are they bordering on recklessness knowing fully well that if the oil prices fall the US government will be forced to a 'Bears Stearns' on them and bail them out? One is not sure.

But who foots bill at such high prices? At an average price of even $100 per barrel, the entire cost for the purchase of this additional 350 million barrels by the US works out to a mere $35 billion. Needless to emphasise, this can be funded by the US by allowing it currency printing presses to work overtime. After all, it has a currency that is acceptable globally and people worldwide are willing to exchange it for precious oil.

No wonder Goldman Sachs predicts that oil will touch $200 to a barrel shortly, knowing fully well that the US government will back its prediction.

And, in the past three years alone the world has paid an estimated additional $3 trillion for its oil purchases. Oil speculators (and not oil producers) are the biggest beneficiaries of this price increase.

In the process, the US has been able to keep the value of the US dollar afloat -- perhaps at an extra cost of a mere $35 billion to its exchequer!

The global crude oil price rise is complex, sinister and beyond innocent economic theories of demand and supply. It is speculation, geopolitics and much more. Obviously, there is a symbiotic link between the US, the US dollar and the oil prices. And unless this truth is understood and the link broken, oil prices cannot be controlled.

<b>Lack of Food Is a "Persistent Myth"</b>
<b>Oil price crash not imminent despite bubble: Soros</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->"We are currently experiencing the bursting of a housing bubble and, at the same time, a rise in oil and other commodities which has some of the earmarks of a bubble," Soros said in prepared testimony before the U.S. Senate Commerce Committee. "To be sure a crash in oil markets is not imminent."

U.S. lawmakers - mostly Democrats - are looking for legislative ways to rein in speculation in crude oil markets, which they see as the prime mover behind the rise in U.S. oil futures above $135 a barrel last month.

Soros said there was <b>"a strong prima facie case against institutional investors pursuing a commodity index buying strategy," which is "intellectually unsound, potentially destabilizing and distinctly harmful in its economic consequences."</b>

Raising margin requirements would have no effect on commodity index buying because they use cash to finance their trading, Soros said. But raising margins "would be justified because it would discourage speculation," he said.

Yes, money he is making can fund to topple lot of countries.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Malthusian nightmare </b>
The Pioneer Edit Desk
Are we running out of food?
The Economic Outlook Report for 2008-09, released on Wednesday by the Economic Advisory Council to the Prime Minister, does not reveal a very promising picture as far as food security is concerned. At its simplest food security means that all the people of the country have sufficient food to eat, to be able to remain healthy and active and also not to have to worry about food in future. Thus, for food security to prevail, sufficient food must be grown to feed everybody adequately. Also part of food security is that people have sufficient access to food. In the absence of food security, a country is forced to import food, which is a situation that can rapidly translate into crisis. Foodgrain production in India has always been important to the country's food security. Of late there have been several indications that there may be problems in this area. The XIth Five Year Plan document had taken note of this problem. The Government has made several interventions such as the National Food Security Mission, Rashtriya Krishi Vikas Yojana and the distribution of high quality seeds that were intended to boost agricultural. Though these have helped, the problem persists. The Economic Outlook Report indicates that despite the recent upward trend in foodgrain production, food security remains an area of concern. The Government also admits that growth is still short of requirement. Although there was a record foodgrain production of 230.7 million tonnes in the year 2007-08, there will be a shortage of about 20 million tonnes if the projected growth in demand for food by the end of the XIth Five Year Plan is considered.

The report suggests that some of the old problems that plague the agricultural sector still exist. These include a slow down in fertilizer, irrigation and energy use at the level of the farm. It also indicates technological stagnation. The report has also agreed with the XIth Five year plan document that crop intensity and area under cultivation have shown a decline. The report notes that the earlier trend of crop diversification has shifted from high value to low value, less risky and less input demanding crops. There has also been a decline in both public and private investment, absence of new technologies, as well as deterioration in soil health. It has also pointed out that agriculture in India is largely monsoon dependent, something that continues to afflict agricultural production in India. All of this suggests that there has been a certain amount of complacency on part of the Government as far as agricultural production and irrigation are concerned. It is time, therefore, that the Government paid more attention to these sectors.
<b>Global Food Crisis May Be Ending as Plantings Gain, India Says </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Aug. 20 (Bloomberg) -- A worldwide food crisis that sent wheat, corn and rice prices to records and sparked riots earlier this year may be over after farmers boosted plantings, a top official in India's food ministry said.

<b>``I don't think there's a crisis now,'' said T. Nanda Kumar, the country's food secretary, who is responsible for formulating food security policy in the world's second-most populous nation. ``Food will be available.''</b>

Farmers from Australia to China have increased plantings of wheat, corn, rice and soybeans, helping stockpiles gain from 30- year lows. An end to the crisis may help countries including India and Egypt ease trade barriers and cool inflation that threatened to stoke social unrest.

The global production outlook for wheat and soybeans is ``very good,'' while rice is still expensive, Kumar said in an interview in New Delhi Aug. 18. ``Rice is softening, but I don't think it has softened adequately.''

Still, grain prices will remain higher than the average of the past five years even as production improves, he said.

Soaring food and energy prices increased the number of hungry people by about 50 million last year, according to the United Nations' Food and Agriculture Organization. The food shortage spurred strikes in Argentina, riots in Cameroon, Burkina Faso, Morocco and Ivory Coast, and a crackdown on illicit exports in Pakistan and the Philippines.

The UBS Bloomberg Constant Maturity Commodity Index of 26 raw materials more than tripled in the past six years as global demand led by China outpaced supplies of crops and metals.

Price Drop

Commodity prices slumped since July 3 as the dollar gained 6.8 percent against a gauge of six major currencies in the past month and crude oil fell 22 percent from its record reducing the attraction of bio-fuels made from grains and sugar cane.

<b>Rice has tumbled 29 percent from its record, while wheat and corn have dropped 35 percent and 26 percent from their peaks</b>.

India, the second-biggest producer of rice and wheat, may need a second ``green revolution'' to meet food demand driven by rising incomes among its 1.1 billion people, Kumar said.

Monkombu Sambasivan Swaminathan, the 83-year-old agriculture scientist who spearheaded India's first ``green revolution'' in the 1960s that made the country self-sufficient in food, has said the solution to higher farm output lies in providing better remuneration to growers.

``You may call it by any name, what we need is more food,'' said Kumar. India needs to increase its wheat and rice production by 3.5 million tons every year to meet its growing demand and cover emergencies, he said.

Supply Shortfall

Supplies of farm products haven't kept pace with demand from consumers who have become richer in the past five years as India's economy registered the fastest economic expansion in its 60 years since independence. The economy averaged 8.7 percent growth since 2003, the fastest pace after China among the world's biggest economies.

<b>``We're trying to increase productivity in some areas by at least 50 percent,'' using water management, seeds and fertilizers, Kumar said.</b>

Production of grains such as rice, wheat and lentils has increased just 10 percent since 2000. Food grain harvests rose to a record 230.7 million tons in the year ended June 30 from 209.8 million tons in 2000, according to the farm ministry.
Now Indian minister had announced food crisis is over, world can take rest till another state minister will get up and contradicts same.
Then someone will create fake food crisis.
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Record paddy procurement in one day</b>
Pioneer News Service | Chandigarh
Strict on-field monitoring by senior officers in the mandis has started showing results on the ground as six government agencies and millers procured record <b>4,20,962 tonnes of paddy in a single day on Friday, taking the total procurement to 54,80,998 tonnes in Punjab</b>.

Disclosing this here on Saturday, an official spokesman said that <b>PUNGRAIN procured 13,25,801 tonnes of paddy (26.7%), MARKFED 11,59,503 tonnes (23.4%), PUNSUP 11,44,784 tonnes (23.1%), the Punjab State Warehousing Corporation 6, 58,857 tonnes (13.3%) besides 6,07,965 tonnes of paddy (12.3%) procured by Punjab Agro. The Central Government Agency FCI procured only 64,575 tonnes of paddy (1.3%). and the millers procured 5,19,513 tonnes.</b> .

The mandis in <b>Amritsar Division recorded 1678102 tonnes of paddy with Jalandhar recording maximum paddy by Friday to the tune of 409211 tonnes</b>. The mandis of Ferozepur division maintained their lead by recording 2665765 tonnes of paddy with maximum of 974294 tonnes of paddy being recorded by Ferozepur district.

Meanwhile procurement in the mandis of Ludhiana division was 1137131 with maximum procurement of 416330 being recorded In Patiala district. <!--QuoteEnd--><!--QuoteEEnd-->

Great news.
<b>India May End Wheat, Rice Futures Ban Next Month on Record Crop</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->The prospects for the winter crop are very good and the resumption in trading will not go against the producers or the consumers,” Khatua said.

Wheat output may exceed last year’s 78.4 million metric tons and production of monsoon-sown rice may reach 83.3 million tons, both records, according to the farm ministry. The winter-sown rice harvest may rise 3 percent to 14 million tons, it said.

Monsoon-sown rice contributes more than 85 percent of the country’s production of the cereal. The winter crop, planted in October, makes up the remainder.

“Ideally, we would like to resume trading before the winter crop arrives in the market,” toward the end of February, Khatua said. “The market doesn’t trade any major cereals at the moment and wheat and rice would be good additions.”
Great. We may see price reduction in US also. Currently Indian products are very expensive.
<b>India Ends Tax on Basmati Rice Exports, Reduces Price</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Jan. 20 (Bloomberg) -- India, the world’s second-largest grower of rice, scrapped the 8,000 rupees ($162) a ton tax on exports of basmati rice amid prospects of a record harvest.

The government also reduced the minimum export price to $1,100 a ton from $1,200 a ton, Trade Minister Kamal Nath told reporters after a meeting of a panel of ministers in New Delhi.

India’s rice output may total 83.25 million tons, a second straight year of record, according to the agriculture ministry. The monsoon-sown crop, for which harvesting began in September, contributes more than 85 percent of the rice production
<b>Rainfall in 15 days may help achieve wheat output target</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->India, the world's second-biggest wheat producer, may fail to reach its output target this year unless some of the growing regions receive rain in the next two weeks, a government researcher said.

"The weather is going to be very critical in the next 15 days," Jag Shoran, director at the state-owned directorate of wheat research said in a telephone interview. "We could produce about 78 million tonne if the weather stays favourable, otherwise it could be down to 75 million tonne."
<b>India tells UNICEF to stop nutrition relief aid</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->India has asked UNICEF to stop distributing millions of dollars worth of nutrition aid to children, saying<b> it had been done without permission and at the expense of local food to fight hunger</b>.

The United Nations Children’s Fund (UNICEF) said it had given severely malnourished children in two Indian states, Bihar and Madhya Pradesh, high energy relief treatment known as “Ready to Use Therapeutic Food” (RUTF).

It said food provided locally was not enough for the children in a critical condition.

India, home to the most malnourished children in the world, grapples with a yawning wealth gap as years of high GDP growth and rising world status did not trickle down to millions of poor.<!--QuoteEnd--><!--QuoteEEnd-->
They must be distributing Beef plus no hafta to minister and Babus.

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