Increasingly evidence of a global food crisis is manifest on the streets of several nations across Asia, Africa and Latin America. The UN’s World Food Programme officials have described the magnitude and sweep of the crisis  as a “silent tsunami.”  Numerically – the present crisis will push an additional 100 million to go hungry alongwith the existing 845 million. The price of wheat has gone up by 130 per cent over the last year, while  that of rice has doubled in Asia in the first quarter of 2008 alone. Why is  this happening?  

A prognosis reveals that the present crisis is not triggered by any sudden slump in production. In fact, farmers across the world produced a record  2.3 billion tonnes of grain in 2007, up 4 per cent on the previous year. Since 1961, the world’s serial output has tripled, while the population has only doubled. But the defining feature of the situation is that public stocks globally are at their lowest level in the last 30 years.  

The background of sweeping changes in the management of the global food economy is revealing. The Fund-Bank induced structural adjustment programme  of the seventies enforced a trade liberalisation regime which pulled down tariff barriers  and severely affected quantitative restrictions and all such regulatory instruments that enabled nation-states to ensure food security. With the onset of WTO, this process sharply accelerated. The very notion of national food security was given a complete go-by.  Local food production  for local requirements were replaced by imperatives to approach the global market place to access their food needs.  

The present crisis reveals that food has transformed from something that nourishes people and provides them with secure livelihoods into a commodity for speculation and bargaining. The defining feature of globalisation that we are witnessing today, lies in the change in the principle function of capital. Instead of investment for production it is largely involved in short term speculative activity.  The integration of the global food economy has resulted in  foodgrains’ metamorphosis  into an object of speculation.  

So much so, that recent studies show that 50 to 60 per cent of the wheat traded in world’s biggest commodity markets are controlled by investment funds. Another estimate shows that speculative money in commodities future markets have soared from US $ 5 billion in 2000 to US $ 175 billion in 2007.  

The crisis has sparked major political repercussions. Major wheat producing  countries have banned or severely imposed restrictions on exports. So is the case in rice. The crisis induced situation has, therefore, further fuelled speculative activities.  

Alongwith the windfall profit for global speculators, the food crisis has also seen that in virtually all sectors associated with the food economy, the  global MNCs have made a killing. From fertilizers to seeds – pesticides, food processing – retail food chains – it is the same story everywhere. Cargills, Monsantos, Nestles, Walmarts, Carrefours, Duponts have recorded super profits during the  last few years, particularly the last year.  

It is true that the present sky-rocketing of food price in India do have global connections. But to attribute the situation only to this factor will be a complete travesty of truth. Indian governments, particularly the NDA, took all measures to align the Indian food economy with the global market place. Through notifications on removal of licensing requirement, stock limits and movement restrictions in February 2002  the  possibility of government intervention for maintaining public stocks was undermined.

 This was further diluted through removing licensing requirements on certain other food items. Together with this, the government permitted speculative futures trading in essential commodities with a notification in April 2003. The stocks which had gone up as a result of increase in the issue prices in 2001-02 was offloaded by offering high subsidy to exporters and they were exported at a price which was even lower than those available to  the BPL categories.  

The UPA government in its Common Minimum Programme has committed itself to strengthen the PDS. However, none of the steps that were implemented to align  India’s food economy with the global system dominated by speculators and MNCs were reversed. On the contrary, the enthusiasm was visible for  further allowing big retail players in the food business. The ordinance on allowing foreign mutual funds in  futures trading by amending the Forward Marketing Law is a case in point.  

But having done all these, the government – particularly the Food Minister --  has taken umbrage behind the argument that the present skyrocketing of the food prices in the country is induced by the global situation. This is not borne out  by the facts.  To the insistence of the Left parties over the last few years that the key to food security is the PDS and public stock, the government’s response was nonchallant.  

Otherwise, how can one explain the experience of  the procurement in the beginning of the present season.  It is clear that having faced the political repercussions, the government is reportedly backing the FCI for a change.  It is reported that as on April 1, the wheat buffer stock has gone up to 5.8 million tonnes against a norm of 4 million tonnes. It appears that the FCI target of procuring 15 million tonnes for buffer stocks may actually be exceeded. The major success is in the procurement in Punjab and Haryana where the comparative cost  allows FCI  to move towards a collection of 11.5 million tonnes as against 11.1 million tonnes last year from the whole of the country. Through payment of commission and VAT and other incidentals, the procurement cost for private agencies has sharply risen to ensure that they shift away to other states.  

The question, therefore, is that of the political will. And, that will have to be forced  through exposure of the government’s inaction and wishing away the problem by siting  global connection.  If the Prime Minister thinks otherwise, it will be a tragedy for our people and a boon for the speculators. 

(The writer is a central secretariate member of the CPM.)