worth a thought........
A couple of years ago if we had been told that India would be paying close to $400 per tonne for wheat, none of us would have believed it. Today not only wheat, but vegoils and even corn to some extent are caught in this price spiral.
The question is whether we want to feed the hungry and make foodgrains affordable to the vast majority of the poor around the world or feed automobiles with biofuel. Whatever may be said in support of biofuel production, it is now increasingly evident that grains, pulses and oilseeds are witnessing unprecendented low stocks, with demand outstripping production. Above all, we are seeing rapid depletion of water resources and diversion of forest cover for production of palmoils, sugarcane corn and soybean to meet biofuel needs.
The increase in production of corn is offset by the increasing diversion of the crop for ethanol. Global corn production at 755 million tonnes this year reflects a jump of almost 10 per cent increase over last year’s production but this is in no way helping poor African and South American countries, where it is a staple grain.
Except for a few shrubs like the jatropha, which can be grown in wasteland and hitherto uncultivated area, most of the other biofuel raw stock is grown at the cost of food items, which will eventually lead to crisis in the food sector. The rich perhaps may not feel the pinch, because more biofuels will lead to a drop in the price of conventional fuel viz oil and natural gas. Both poor and food deficient Asian and African countries will pay a heavy price for this.
Even more importantly, agricultural crops like sugar cane, corn, soybean and palm plantations do draw water enormously and it should be realised that water is more precious than any other commodity. While there are alternatives for oil and natural gas, nobody has thought about an alternative for water. If we indiscriminately use already scarce resources, the consequences will be disastrous. The choice is grim: food, fuel or forests.
Forests have already been cleared to an alarming level and it will take decades to correct the situation. Food crops are now being termed as ‘industrial crops’ as biofuels gain priority over food. The sooner we correct this situation, the earlier will food prices limp back to normal levels. It is widely believed that even if steps to increase production are initiated now, prices may not fall to earlier levels considering demand trends and the extremely low level of stocks.
Food-sufficient Western countries do not seem to be concerned as they are sufficiently affluent to absorb the increase in price of food items consequent upon diversion of grains, oilseeds and plantation crops for production of bio-diesel. Thus, we find both the US and Europe increasingly focusing on usage of biofuels. Not only can they financially face the situation, they will also be benefited by increased realisation on the exports of surplus grains and oilseeds. However, food deficient Asian and African nations are the worst hit as grains and oilseeds grow costly by the day. Global bodies like the FAO have already warned against the consequences of diversion of food crops for bio-diesel but they need to come out with adequate safeguards or guidelines to protect the interests of poorer nations. At the moment, this issue is not viewed with the seriousness the subject deserves. Hence, it is important to build awareness and public opinion, with a view to project the gravity of the situation and the injustice inflicted on the poor nations.
The price increase in grains and oilseeds is the result of imbalance between supply and demand and depleting stocks. If timely steps are not taken to correct the situation, one can safely say that importing nations will be forced pay over $1,000 per tonne for vegoils and over $500 per tonne for grains. Can they afford this?
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